On 25 June 2013, the French tax authority (Direction de la Législation Fiscale) has issued a document (bulletin BOI TVA-CHAMP-30-30-30-10-20130625) providing that VAT (19,6%) will apply to the charter of yachts used for recreational purpose. In addition this document stipulates that VAT will also apply to operations/services performed by brokers (« Les opérations effectuées par des intermédiaires qui s’entremettent entre l’exploitant du navire d’une part, et la personne qui l’utilise à des fins d’agrément sans affecter le navire à une activité rémunérée d’autre part, son également soumises à la TVA dans les mêmes conditions »). Nevertheless the end of the VAT exemption concerns charters contracts signed on July 15 or later. Therefore charters contract that have already been signed remains exempt of VAT.

This announcement follows the formal request sent by the European Commission to France to comply with the article 148 of the VAT Directive (2006/112/CE). Previously the European Court of Justice (Bacino Charter company SA CJUE n°C-116/10 22 December 2010) held that the VAT exemption can not be granted when the vessel is chartered for recreational use.