Short answer. Selling a French-registered yacht to a foreign buyer raises four questions that must be settled before signature, not after. VAT: a private seller charges none, but the vessel’s own VAT status, and whether she leaves the customs territory of the Union, change the real economics of the deal. The flag: a buyer who is not a national of the European Union or the European Economic Area cannot keep the French flag, so the vessel is struck off and must be re-registered elsewhere. Sanctions: selling a yacht to any person in Russia or for use in Russia is prohibited whatever the price, and every buyer must be screened. Payment: deposit and balance move through an escrow account and delivery takes place against cleared funds.
An American, Swiss, Emirati or British buyer appears through a broker, offers an attractive price and wants to close within weeks. The French seller, whether an individual or a company, then discovers that the proposed contract is an English-language form governed by English law, that the buyer wants delivery outside Union waters, that his bank is asking about the source of funds, and that the destination register is demanding documents he does not have. What follows are the questions a seller must settle, in the order in which they arise.
VAT: three situations, three answers
The first question is the seller’s status. A private individual selling a boat he used privately is not a taxable person: he charges no VAT, whoever the buyer is and wherever the vessel goes. What matters to the buyer is the VAT status of the yacht herself, meaning proof that the tax was accounted for in the Union on the first supply or on importation and that the vessel is in free circulation. That proof, made up of the original invoice showing the tax, the import document or a builder’s attestation, is what the market calls VAT paid status. It forms part of the value of the vessel and should be assembled before she is put on the market, because its absence justifies a discount or a retention.
The second situation is that of a company or taxable professional, a charter company or a yard for instance. The sale is then a supply of goods subject to French VAT unless exempt. Two exemptions are available: export, where the vessel is dispatched outside the Union by or on behalf of the seller, or by or on behalf of a buyer not established in France, which requires an actual exit from the customs territory evidenced by an export declaration certified by customs and not merely a contractual clause; and intra-Union supply, where the vessel is transported to another Member State to a taxable acquirer who has provided his VAT number. A sale to a private individual established in another Member State remains subject to French VAT where the vessel is second-hand.
The new means of transport rule, and where it now sits
The third situation is the new means of transport. The rule has moved: French VAT was recodified into the Code of taxes on goods and services by Ordinance No 2025-1247 of 17 December 2025, which took effect on 1 September 2026, and the former article 298 sexies of the General Tax Code was repealed. The regime now sits in articles L. 232-1 to L. 232-13 of that code, which treat a floating craft over 7.5 metres as a means of transport, and as a new one where the supply occurs within three months of first entry into service or where she has fewer than one hundred hours of navigation.
The consequence is unchanged in substance and remains counter-intuitive. For such a vessel, a sale to another Member State is exempt in France and the VAT is due in the buyer’s Member State, even where the buyer is a private individual, and even where the seller is himself a private individual, whom the legislation then treats as an occasional taxable person. An owner reselling a yacht delivered less than three months earlier to an Italian or Spanish buyer must therefore structure the sale around that rule, failing which he will have borne French VAT without recovering it and the buyer will pay it a second time at home.
The vessel’s VAT status after the sale
One point is regularly missed on both sides. Where a yacht in free circulation in the Union is sold to a buyer established outside the Union and exported, she loses her Union status. If she later returns to Union waters under a foreign flag, she may stay only under temporary admission, which is reserved to non-residents and limited in time, and any definitive reimportation triggers import VAT on the value of the vessel. The returned goods relief applies only to reimportation by the person who exported the goods (article 143(1)(e) of Directive 2006/112/EC), which by construction excludes a buyer who was not the owner at the time of export. VAT paid status, in short, does not travel outside the Union.
Conversely, a sale to a foreign buyer does not necessarily involve an export. A Swiss or Monegasque buyer may decide to keep the vessel in a French or Italian port; she then stays in free circulation, no export occurs, and a taxable seller charges French VAT. The place of delivery stipulated in the contract therefore governs the tax treatment, and it should be fixed according to the buyer’s actual plans rather than by a standard formula.
The flag: can a foreign buyer keep the French flag?
That depends on the buyer’s nationality. French law reserves francisation, the right to fly the French flag, to vessels owned as to at least one half by natural persons who are nationals of a Member State of the European Union or of a State party to the European Economic Area agreement (articles L. 5112-1-3 and L. 5112-1-5 of the Transport Code), or by legal persons having their seat in one of those States, provided the vessel is directed and controlled from a permanent establishment in France (article L. 5112-1-6). A German, Belgian or Norwegian buyer may therefore in principle keep the French flag, subject to electing domicile in France if he does not reside there six months a year. An American, British, Swiss or Emirati buyer may not: article L. 5112-1-8 provides that a vessel which no longer meets the conditions is struck off the French flag.
Striking off is not a formality. It cannot occur while a mortgage is recorded, which means the seller must obtain discharge of any loan secured on the vessel before the sale, or arrange for the lender to be repaid out of the price at delivery. The destination register, most often Malta, Jersey, Guernsey, the Cayman Islands or the Marshall Islands, will then require a French deletion certificate, a bill of sale in due form, often notarised or apostilled, the builder’s certificate, the tonnage certificate for vessels of 24 metres and over, and the CE declaration of conformity. Assembling those documents takes two to six weeks; requesting them after signature delays delivery and blocks payment of the balance.
The bill of sale, and the two clauses that matter
Any instrument transferring ownership of a registered vessel must, on pain of nullity, be in writing and carry the particulars identifying the parties and the ship (article L. 5114-1 of the Transport Code). In practice the sale runs on a detailed contract, most often the MYBA Memorandum of Agreement for vessels over 24 metres, completed on the delivery date by a short bill of sale for the register. The contract organises the deposit, the survey and sea trial, the buyer’s right of rejection, the place and date of delivery, the allocation of taxes and costs, the seller’s warranty as to freedom from debts, liens and mortgages, and the fate of the deposit if either party defaults.
Two clauses deserve particular attention. The as is, where is clause, which excludes the seller’s warranties after acceptance and whose reach under French law is narrower than buyers assume. And the governing law and jurisdiction clause: Anglo-Saxon forms point to English law and London arbitration, which is not necessarily in a French seller’s interest. French law with the Chambre arbitrale maritime de Paris, or a French court, is negotiable and often accepted where the vessel lies in France. The seller also warrants the absence of maritime liens: the claims listed in article L. 5114-8 of the Transport Code follow the vessel into the buyer’s hands and rank ahead of any mortgage (article L. 5114-13), so a yacht with salaried crew, unpaid yard invoices or a pending port dispute must be cleaned up before the sale.
International sanctions: screen the buyer before negotiating
Since 2022 the yacht has become an object of sanctions. Regulation (EU) No 833/2014 prohibits selling, supplying, transferring or exporting, directly or indirectly, to any person in Russia or for use in Russia, the goods listed in Annex XXIII, which includes yachts and other vessels for pleasure or sport under code 8903, with no value threshold. The same regulation prohibits the sale of the luxury goods in Annex XVIII, including vessels for the transport of persons by sea worth more than fifty thousand euros. Those prohibitions extend to technical assistance, brokering and financing connected with the sale. A comparable regime applies to Belarus. On top of that sits the asset freeze of Regulation (EU) No 269/2014: it is prohibited to make funds or economic resources, and a yacht is one, available to designated persons and entities, directly or indirectly, which covers companies they own or control.
In practice a seller cannot rely on the buyer’s declared nationality. He must identify the beneficial owner of the acquiring company, often incorporated in Malta, the British Virgin Islands or the Cayman Islands, screen that person against European Union, United Kingdom and OFAC lists, satisfy himself that the destination flag and intended place of use do not amount to use in Russia, and keep a record of those checks. Brokers, banks and lawyers are subject to due diligence obligations that lead them to ask the same questions; a seller who anticipates them closes faster. A sale concluded in breach of these rules exposes the seller to criminal proceedings and to confiscation of the price, and the contract is void.
Payment: escrow, currency, cash limits
The usual structure is a deposit of ten per cent of the price on signature, paid into an escrow account, whether a French lawyer’s CARPA account or the broker’s client account, and payment of the balance before delivery into the same account, ownership passing only once funds have cleared and the delivery documents have been exchanged. The mechanism protects both sides: the buyer does not pay before receiving the bill of sale and the mortgage discharge, the seller does not hand over the vessel before receiving the price. The currency and the issuing bank should be fixed in the contract, since a transfer from an institution in a higher-risk jurisdiction can be held by the escrow bank for weeks.
Cash is effectively excluded. French law caps cash settlement of a debt at one thousand euros where the debtor is tax resident in France or acts for business purposes, and at ten or fifteen thousand euros depending on the recipient where the debtor is tax resident abroad and not acting professionally (articles L. 112-6 and D. 112-3 of the Monetary and Financial Code). Payment in crypto-assets, sometimes proposed, should be refused or converted beforehand by a registered provider, traceability of funds being a condition of the sale. Finally the contract must state what becomes of the deposit: forfeited where the buyer fails to pay the balance without contractual cause, returned where the survey reveals a substantial defect and he exercises his right of rejection in time. That is the single most frequent source of dispute in this type of sale.
Delivery and leaving the customs territory
The place of delivery is where VAT, flag and payment converge. Where the transaction involves an export, the export declaration is lodged by a customs representative before departure, the vessel leaves the customs territory under her own power, and exit is certified. That certification is what proves the taxable seller’s exemption and marks the starting point of the vessel’s new customs status. A delivery on the high seas arranged without an export declaration produces none of those effects and exposes the seller to a VAT assessment. Where the buyer keeps the vessel in the Union there is no export: ownership passes alongside, the flag changes, and the vessel stays in free circulation.
Delivery itself is documented by a protocol of delivery and acceptance signed by both parties, fixing the hour at which risk passes, and by handing over the ship’s papers: bill of sale, deletion certificate or evidence that deletion has been applied for, mortgage discharge, builder’s certificate, declaration of conformity, manuals and an agreed inventory. The seller cancels his insurance and crew contracts from that date and notifies the sale to the registration office within the prescribed period. Until deletion is recorded he remains exposed to fines and to claims connected with the vessel.
Timescale, cost, and what the firm does
A sale to a foreign buyer takes on average six to ten weeks between acceptance of the offer and delivery: one to two weeks to negotiate the contract and complete sanctions screening, two to three weeks for the survey and sea trial, and two to four weeks for the mortgage discharge, the deletion and the destination register documents. The seller’s costs are the broker’s commission, usually ten per cent and negotiable above certain figures, the discharge fees, the deletion fees and, where relevant, the cost of the export declaration. The mistakes cost far more: a VAT assessment of twenty per cent of the price for an export that cannot be proved, the loss of a ten per cent deposit in a badly framed survey dispute, or the nullity of a sale concluded with a company whose beneficial owner was designated.
The firm acts for sellers, and for foreign buyers who want French advice, at every stage: screening the buyer and his structure for sanctions and anti-money-laundering purposes; auditing the vessel’s VAT status and settling the regime applicable to the sale; negotiating and drafting the sale contract, in English where needed, with the choice of law and forum; holding the escrow on a CARPA account; coordinating with the broker, the registry, the registration office, the customs representative and the destination register; drafting the delivery documents; and handling disputes over the deposit, the survey or a defect discovered after delivery. Based in Paris, the firm works in English with brokers, registers and foreign counsel, and acts in all French ports, from Antibes to La Rochelle.
Are you selling a yacht to a foreign buyer, or buying a yacht in France from abroad? A consultation fixes the VAT treatment, the deletion timetable and the payment structure before anything is signed.
Frequently asked questions
Does a private individual selling a yacht to a foreign buyer charge VAT?
No. A private seller is not a taxable person and charges no VAT. The vessel’s VAT paid status must nevertheless be evidenced to the buyer, and if a craft over 7.5 metres is less than three months old or has fewer than one hundred hours of navigation, she is a new means of transport on which VAT is due in the buyer’s Member State.
Can an American or Swiss buyer keep the French flag?
No. The French flag is reserved to vessels owned as to at least one half by nationals or companies of the European Union or the European Economic Area (articles L. 5112-1-3, L. 5112-1-5 and L. 5112-1-6 of the Transport Code). The vessel is struck off and must be re-registered elsewhere, which requires discharge of any mortgage (article L. 5112-1-8).
Does the yacht keep its VAT paid status after a sale outside the Union?
No. Once exported and sold to a person established outside the Union, the vessel loses her Union status. Returned goods relief applies only to reimportation by the person who exported (article 143(1)(e) of Directive 2006/112/EC), so a new owner bringing her back definitively will pay import VAT.
Can a yacht be sold to a Russian buyer?
No. Regulation (EU) No 833/2014 prohibits selling or exporting yachts and pleasure craft of code 8903 to any person in Russia or for use in Russia, with no value threshold, and Regulation (EU) No 269/2014 prohibits making an asset available to a designated person, including through a company under their control.
How is payment secured on a yacht sold abroad?
Through a deposit of around ten per cent and a balance paid into an escrow account, with ownership passing against cleared funds and delivery of the ship’s papers. Cash is capped at one thousand euros for a French tax resident and at ten or fifteen thousand euros for a non-resident (articles L. 112-6 and D. 112-3 of the Monetary and Financial Code).
Further reading: buying a yacht abroad: ten checks, ship mortgages and how to check them, international yacht sales.
Written by Hervé Guyader, avocat at the Paris Bar, doctor of law. This content is general information and is no substitute for advice on your own matter.