No text recognises a “VAT paid” vessel. Two questions arise: customs status as Union goods, presumed but open to checking, and actual payment of VAT. Only the original invoice, the tax certificate or the import declaration prove it. The flag and the registration certificate prove nothing.
The scene repeats itself every spring. A buyer signs for an 18-metre yacht built in 2009 and based in Palma, the broker describes the boat as “VAT paid”, and when the lawyer asks for the document he receives a 2014 invoice between two companies, with no mention of VAT, together with a reassuring message: the boat has always sailed in Europe.
That proves nothing. And on the day a customs launch asks for the ship’s papers off Porquerolles, it is not the seller who answers but the owner of the day.
The subject needs to be framed correctly, because the market’s vocabulary is misleading. In law there is no such thing as a “VAT paid” vessel. There is a customs status, which is a question of territory, and a tax position, which is the history of successive transactions. The two are not the same, are not proved with the same documents and are not remedied in the same way.
Two questions the market mixes up
The first is a customs question: is the vessel Union goods, that is an asset that circulates freely in the customs territory, or non-Union goods that should be placed under a customs procedure? The Union Customs Code lays down a convenient presumption: all goods in the customs territory of the Union are presumed to have the customs status of Union goods, unless it is established that they do not (article 153 of Regulation no. 952/2013). The presumption falls away in situations where the rules require proof, and in practice it collides with the first serious inspection.
The second is a tax question: has VAT been paid somewhere in the Union on this asset, without being recovered afterwards? A vessel may perfectly well be Union goods and never have borne final VAT, for example because it was supplied free of VAT to a commercial operating company that deducted all the input tax. Conversely, a vessel on which VAT was paid in Italy in 2007 loses its customs status if it is exported from the Union, and the tax paid long ago changes nothing.
Whoever buys, buys both histories. Brokers sell the first and say nothing about the second.
The typical file, the one I receive three or four times a year, looks like this: a yacht built in Italy in 2008, sold new to a Luxembourg company that deducted the VAT, operated four seasons in charter under the Maltese flag, sold in 2014 to a British Virgin Islands company that took her out of the Union for a season in Turkey, bought back in 2018 by a Belgian individual who paid the price without ever questioning the chain, and now offered to a French buyer who, when he asks about VAT, is told that the boat has always been in Europe, which is false, and that there has never been a problem, which is true until the first inspection.
What counts as proof, and what does not
The means of proving customs status are regulated: T2L and T2LF, now dematerialised in the PoUS system deployed since 1 March 2024, with the issue of a reference number, on the basis of articles 153 to 155 of the Union Customs Code and articles 194 to 215 of Implementing Regulation 2015/2447. For a pleasure yacht these documents are rarely drawn up, so it is the tax and registration documents that make up the file.
On 30 April 2026 the Commission published a guidance note on pleasure boats, reference TAXUD.A.1.003/EC, which describes this architecture for boat owners. It recalls two things that should be read together: an owner rarely has to prove the status of his boat and, when he must, he can ask the customs authorities of his country of registration for a T2L, after they have checked it. In other words, proof is not manufactured on the day of the inspection: it is requested beforehand.
Three documents have real value. The original purchase invoice showing VAT, where the seller was a business identified in a Member State and the VAT appears at the foot of the invoice. The tax certificate, commonly called the quitus, issued by the tax office for a means of transport acquired in another Member State, which the official tax guidance states is required on registration or francisation and is issued by the office of the buyer’s domicile, with a relaxation allowing boat owners to apply to the office of the place where the boat is kept. And the declaration for release for free circulation, with the receipt for duties and VAT, where the vessel was imported from a third country.
What proves nothing: an invoice between two companies with no mention of VAT, a broker’s certificate, a French registration certificate (acte de francisation), a foreign registration certificate, a statement by the previous owner. The flag is not a tax status. A vessel can fly the French flag and never have paid VAT, which is exactly what happens in files where commercial operating status has been lost.
One case deserves mention because it confuses even practitioners. Resale by a business under the margin scheme, provided for in article 297 A of the General Tax Code, produces an invoice with no visible VAT even though the asset did bear VAT upstream. A silent invoice is therefore not necessarily a worrying invoice, provided it states the scheme applied and the earlier chain is documented. Without that statement, the doubt remains.
The myth of pre-1985 vessels
There is a rule in the industry that everyone recites: a boat in service before 1 January 1985 and present in the Community on 31 December 1992 is deemed to be in order for VAT. This rule has a serious origin, the transitional provisions for the internal market, and it is applied by several European administrations, notably the British one when it was a member.
I know of no endorsement of it to date in published French tax guidance. The customs guide on pleasure boating says nothing about it. The Commission’s guidance note of 30 April 2026, which covers pleasure boats from start to finish, says nothing about it either. This does not mean the rule is wrong; it means it cannot be argued on its own. A buyer who purchases a 1972 classic on the strength of this rule, without period documents or proof of presence in the Community at the end of 1992, is buying an argument, not a proof. The file is then built differently: an old bill of sale, register entries, continuous port and wintering invoices, a club certificate, dated photographs. It is laborious. It is what holds up.
The new vessel for tax purposes, a trap in Italian and Spanish purchases
An acquisition from a yard or dealer in another Member State calls for a prior check: is the boat a new means of transport for tax purposes? The definition does not depend on wear but on two alternative criteria. For boats over 7.5 metres long, the asset is new if it is supplied within three months of first entering into service, or if it has sailed for less than one hundred hours, under article 298 sexies of the General Tax Code and the official tax guidance.
The consequence is harsh for a private buyer. A yacht meeting these criteria is taxed in the Member State of arrival, whatever the seller’s status, and the Italian invoice showing Italian VAT exempts him from nothing. He will have to pay French VAT and obtain the tax certificate, failing which francisation will be refused. Every year, buyers discover this rule after signing, after paying and sometimes after delivering the boat.
How acquired status is destroyed
Export from the customs territory of the Union causes the vessel to lose its status as Union goods, by the effect of article 154 of the Union Customs Code. A sale to a buyer established outside the Union, with exit from the territory, therefore produces exactly that result, which is why a well-advised seller documents the exit and a well-advised buyer asks about the return.
The return, precisely, is not free. The returned goods relief, provided in articles 203 to 205 of the Union Customs Code, requires re-importation within three years of export and in the state in which the asset was exported. The import VAT exemption of article 291, III, 1° of the General Tax Code, which transposes article 143(1)(e) of Directive 2006/112/EC, adds a formidable condition: the asset must be re-imported by the person who exported it. This last condition is the one that brings files down. A yacht sold in Monaco to a Turkish buyer in 2021 and bought back in 2026 by a French resident does not return duty-free: it is imported, with duties and VAT on its current value.
Regularise before selling, or sell the doubt
An owner who discovers the lack of proof has two strategies, and the second is not really one.
The first is to regularise before putting the vessel on the market, by declaring it for free circulation and paying duties and VAT on its current value. It is painful. It is also, arithmetically, often cheaper than the discount the market will impose: a yacht without a tax file sells in practice well below a documented equivalent, if it finds a buyer at all, because the buyer knows he will have to regularise one day on a value he does not control.
The second is to sell as is, hoping the buyer will not ask. It exposes the seller to a warranty claim, to a claim for annulment for mistake as to an essential quality, and to the painful discovery that the “as is, where is” clause of the MYBA contract covers the physical condition of the vessel, not its administrative position. I have never seen this strategy produce anything other than litigation deferred by two years.
What a person sailing without a file risks
If the status of Union goods cannot be established, the vessel is treated as non-Union goods irregularly present in the customs territory. A customs debt arises through non-compliance, under article 79 of the Union Customs Code, and import VAT becomes chargeable. French customs penalties are added and, in the heaviest files, immobilisation of the vessel, since the goods involved in the fraud are the boat itself.
A point of method is needed here: the French Customs Code was recodified by an ordinance in force since 1 May 2026, without substantive change, with entirely new numbering and published concordance tables. Contracts, conditions of sale and letters that still refer to the former articles need to be updated, and reassessment proposals received since that date should be read with the table to hand.
A last trap, adjacent and frequent, deserves naming. An owner or user whose main residence is in France and who sails a yacht under a foreign flag is liable for the annual tax on maritime craft for personal use, articles L. 423-4 et seq. of the Code of Taxes on Goods and Services, which has absorbed the former passport duty. Failure to declare is punished by a fine, and deliberate inaccuracy by an 80% surcharge. An exotic flag chosen for discretion therefore attracts two inspections instead of one.
What the firm does
Before purchase, we audit the vessel’s tax and customs file at the same time as its title and security interests, because the two are checked against different sources and one audit without the other is useless. We draft the clauses that put the risk on whoever should bear it: a condition precedent of delivery of the proofs, escrow of part of the price, a tax indemnity, and a regularisation undertaking by the seller.
During ownership, we build the permanent file the owner will keep on board, and we deal with the administration’s requests. In an inspection or seizure, we dispute the value retained, when the debt arose and the characterisation of the offence, and we negotiate release.
The rule I state bluntly in every new file: a yacht is checked before, never after. After, it is no longer a check; it is a defence.
For a complete picture, our practical guide Yacht tax and customs: which status to choose, and at what cost? sets out the three statuses side by side, with the documents that prove each one and the cost of leaving it; it can be downloaded free of charge. To have your own situation reviewed, contact the firm.
Further reading: Late delivery of a new yacht: liquidated damages, termination, guarantees.
Frequently asked questions
What is a “VAT paid” vessel?
The expression is not a legal one. It covers two distinct things: the customs status of Union goods, presumed by article 153 of the Union Customs Code, and the fact that VAT has been finally borne on the asset in a Member State. A vessel may satisfy the first condition without satisfying the second.
Which documents should be requested from the seller before buying?
The original purchase invoice showing VAT, the tax certificate issued by the tax office for an intra-Community acquisition, the declaration for release for free circulation and the receipt in case of import, the registration certificate, and the history of successive owners. For a purchase under the margin scheme, the invoice must state the scheme applied.
Is a 1978 boat exempt from proof?
No. The market rule that vessels in service before 1985 and present in the Community at the end of 1992 are deemed to be in order is endorsed neither by published French tax guidance nor by the Commission’s guidance note of 30 April 2026 on pleasure boats. It does not exempt anyone from building a file of continuous presence in the Union.
I am buying a six-month-old boat in Italy: which VAT applies?
If the boat is over 7.5 metres long and is supplied within three months of first entering into service or has sailed for less than one hundred hours, it is a new means of transport within the meaning of article 298 sexies of the General Tax Code: VAT is due in France, and the tax certificate is a condition of francisation.
My yacht was sold outside the Union and bought back in Europe: what happens?
Export caused it to lose Union goods status, under article 154 of the Union Customs Code. Returned goods relief, under articles 203 to 205 of the same Code and article 291, III, 1° of the General Tax Code, requires re-importation within three years, in the same state, by the person who exported the asset. A new buyer cannot rely on it: he imports, with duties and VAT.
What is the risk in an inspection without documents?
The vessel is treated as non-Union goods irregularly present. A customs debt arises through non-compliance within the meaning of article 79 of the Union Customs Code, import VAT becomes chargeable, and customs penalties are added, immobilisation of the vessel being possible since the boat itself is the object of the fraud.
Can the position be regularised voluntarily?
Yes, by declaring the vessel for free circulation and paying duties and VAT on its current value. A spontaneous approach, made before any inspection, puts the file in a better position for discussion than a forced regularisation, and makes the vessel saleable.
Does a foreign flag change anything?
For tax purposes, it gives no protection and creates an additional obligation: the annual tax on maritime craft for personal use is due from a user whose main residence is in France, under articles L. 423-4 et seq. of the Code of Taxes on Goods and Services.
Hervé Guyader, avocat at the Paris Bar, doctor of law.
For a pre-purchase audit, the firm can be reached through its contact form.
On the same subject, the commercial regime: commercial yachts and the conditions customs checks; non-EU vessels: temporary admission and its eighteen months; structures: holding a yacht through a company.