Short answer. A boat over 7.5 metres is treated as new for VAT purposes if it is delivered within three months of first entering into service or has sailed fewer than 100 hours; VAT is then due in the Member State of arrival (Article 298 sexies of the General Tax Code). A yacht flying the flag of a third country and used by a person established outside the Union may stay eighteen months in Union waters under temporary admission, with duties and VAT suspended (Articles 212 and 217 of Delegated Regulation (EU) 2015/2446); use by a Union resident gives rise to a customs debt. Since 1 January 2022, francisation and registration lead to a single registration and a single certificate (Article L. 5112-1-11 of the Transport Code). The VAT exemption for commercial yachts (Article 262, II, 2° of the General Tax Code) requires an actual, paid commercial operation.
Yacht on the French Riviera? Our four yacht services (purchase review, charter and VAT, crew contracts, emergency line) are gathered on one page: French yacht lawyer, French Riviera.
Hervé Guyader, a member of the Paris Bar with a doctorate in law, advises and defends yacht owners, holding companies, family offices and charter operators in their dealings with customs and the tax authorities, in every French port, mainland and overseas, in English and French.
You are facing:
- a yacht for which no one can prove that VAT has been paid
- a customs inspection or a notice of recovery
- a disputed VAT or fuel exemption on a commercial yacht
- a yacht under a non-EU flag in temporary admission
- a company holding structure that needs reviewing
A yacht often costs more in poorly anticipated taxes than in maintenance. Import VAT represents 20% of its value, and it may be claimed years after the purchase, on the occasion of a port call, a resale or a change of use. An inspection is concerned not with what owners believe they know about the status of their boat, but with the documents they are able to produce on the day customs asks for them.
Proving that VAT has been paid
Union goods status is not the same thing as payment of the tax. A yacht may move freely within the Union without anyone being able to show that VAT was ever paid. Payment is established only by the original invoice showing the VAT, the receipted declaration for release for free circulation or an equivalent tax document. The firm reconstructs the chain of owners and invoices before a purchase, a sale or an inspection, and identifies the point at which the evidence is lost.
For VAT purposes, a boat more than 7.5 metres long remains a new means of transport if it is supplied within three months of its first entry into service or if it has sailed for fewer than one hundred hours (Article 298 sexies of the French General Tax Code). The tax is then due in the Member State of arrival, even between private individuals: the point should be checked before signing.
Before a purchase or a resale, an audit of the yacht’s VAT file avoids discovering the problem at the moment the buyer or customs raises it.
Commercial operation: VAT exemption and duty-free fuel
A yacht used for a commercial activity may be acquired, maintained and supplied free of VAT (Article 262, II, 2° of the General Tax Code), and may benefit from fuel exempt from excise duty. The advantage is real, and so are the conditions: actual operation for remuneration, a permanent crew and, for vessels over 15 metres, at least 70% of navigation outside territorial waters according to the tax authorities’ published guidance, with no disguised private use. Ownership through a company is not sufficient in itself.
The risk falls mainly on owners who charter out without a commercial regime, or who claim one without genuinely operating under it. Customs then claws back the exemption, the fuel tax and penalties. The firm checks the consistency between the charter contracts, the logbooks, the crew and the tax documentation before an inspection does.
Non-EU flag and temporary admission
A yacht registered outside the Union may remain in European waters under temporary admission, with relief from duties and VAT, for eighteen months (Article 217 of Delegated Regulation (EU) 2015/2446). The procedure requires the vessel to belong to a person established outside the Union and to be used by that person. Use by a Union resident, even occasionally, or unauthorised charter activity is enough to give rise to a customs debt on the value of the vessel.
Company ownership: what the structure protects, and what it costs
Placing a yacht in a company limits liability and facilitates succession, but opens no right to deductions: yacht expenses are excluded from deductible charges (Article 39, 4 of the General Tax Code), unless the company’s actual business is chartering or selling boats. The 2026 Finance Act also created an annual tax of 20% on the non-business assets of personal holding companies, yachts included (Article 235 ter C of the same Code, introduced by Article 7 of Law No. 2026-103 of 19 February 2026). An older structure deserves to be reviewed in that light.
Francisation, annual tax and change of flag
Since 1 January 2022, francisation has been governed by the French Transport Code: francisation and registration give rise to a single entry and a single certificate (Article L. 5112-1-11 of the Transport Code). A change of flag, in either direction, has tax and customs consequences that must be assessed before the sale, particularly as regards proof of VAT status and the annual tax payable on marine craft for personal use.
An inspection under way, a notice of recovery received or a yacht detained in port: the time limits for lodging a claim are short, and the first answers given to customs shape everything that follows.
The firm’s analyses
- Yacht without proof of VAT paid: buying, sailing and reselling in the Union
- Commercial yacht: the conditions customs checks
- Temporary admission of a non-EU yacht: eighteen months
- Holding a yacht through a company: what the structure protects and what it costs
- Illegal charter: what the owner and the broker risk
- Applying for francisation of a boat: the procedure step by step
- Customs reassessment: challenging a notice of recovery
For the purchase and sale themselves, see also Yacht sale and purchase; for all maritime matters, Maritime lawyer.
Frequently asked questions on yacht tax and customs
How can one prove that a yacht’s VAT has been paid?
By the original invoice showing the VAT, the receipted declaration for release for free circulation or an equivalent tax document, reconstructing the chain of owners back to that document. Union goods status alone is not enough.
How long may a foreign-flagged yacht stay in the Union?
Eighteen months under temporary admission, if it belongs to a person established outside the Union and is used by that person. Use by a Union resident brings the procedure to an end and makes VAT payable on the value of the vessel.
Does a yacht held by a company escape VAT?
No. Only genuine commercial operation, mainly outside territorial waters, gives entitlement to the exemption. Nor does the company allow the yacht’s expenses to be deducted, and a personal holding company may now bear the annual 20% tax created by the 2026 Finance Act.
What should be done about a customs notice of recovery?
Challenge it within the time limits by a reasoned claim, applying where appropriate for a stay of payment against security, then bring the matter before the judicial court (tribunal judiciaire) if the claim is rejected. The documents gathered from the very first response to the authorities carry weight throughout what follows.
Page updated on 1 November 2026.