Guidance on 'Open Sea' Qualification – Territorial Waters vs. 12 NM
The relevant criterion is being outside territorial waters, rather than simply sailing more than 12 nautical miles from the coast.
Read moreFLYN-YACHTING helps yacht owners and captains confidently navigate legal and tax requirements while maximizing tax savings through a reliable tracking system and reports certified by maritime experts.
FLYN YACHTING uses the AIS system on your yacht and its tracking software, developed specifically by maritime experts to meet the needs of the yachting industry, to produce certificates and reports approved by the French authorities, which help you to comply with customs, tax, social security and maritime navigation regulations, and to minimise risks.
Detailed supporting evidence of compliance with regulatory criteria is issued in the form of reports and certificates based on calculations relating to the vessel’s itinerary.
FLYN-YACHTING allows fiscal representatives, owners, charter brokers, charter managers and more to make substantial savings.
Commercial yachts operating in the Mediterranean may benefit from two major VAT mechanisms:
The VAT taxable base may be reduced according to the time spent outside EU territorial waters during a commercial charter. France and Italy are the two main countries to apply this rule.
Eligible yachts may benefit from VAT exemptions on certain goods and services, provided that at least 70% of their annual commercial trips qualify as “high seas” trips.
FLYN-YACHTING provides legal, tax and operational services, including fiscal trip tracking, VAT reduction calculations, continuous monitoring of the annual 70% ratio, and documentary evidence to support customs and tax matters.
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The relevant criterion is being outside territorial waters, rather than simply sailing more than 12 nautical miles from the coast.
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In force since 24 June 2026, the new regulatory boundaries already apply — even though the official nautical charts have not yet been updated.
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Two contractual frameworks, two very different logics — with concrete consequences for VAT, operational flexibility and cruise organization.
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The questions shipowners, captains, charter managers and fiscal representatives ask us most often.
FLYN-YACHTING uses the AIS installed on the yacht and its tracking software, developed by maritime experts, to reconstruct each voyage: routes, stopovers, distances, sailing times, border crossings, territorial waters, ports, shipyards and anchorages. This data is cross-referenced with the applicable regulations to produce certificates and reports approved by the French authorities.
The taxable base is reduced in proportion to the time spent outside EU territorial waters during the commercial operation. From the AIS points, FLYN-YACHTING calculates the time spent in the various national and international waters, then determines the taxable base and the effective VAT rate. The starting rate is that of the country of departure: 20% in France, 22% in Italy. France and Italy are the two main countries applying this rule.
Eligible yachts may benefit from VAT exemptions on certain goods and services provided that at least 70% of their annual commercial trips qualify as “high seas” trips. In France, reaching 70% or more qualifying trips over the calendar year classes the yacht as a high-seas vessel; in Italy the threshold must be exceeded and the definition of a trip differs (one trip per commercial operation).
18 consecutive months in the EU fiscal territory, under the temporary admission regime. The vessel must leave EU waters before that deadline; failing this, VAT is due on the value of the vessel. It is therefore strongly advised to evidence the exact date of entry into EU waters, which sets the start of the 18-month period.
FLYN-YACHTING issues a certificate specifying the exact time window during which the yacht was in international waters, including, where applicable, its origin from a third country. A detailed map, the boundaries of territorial waters, the points of entry and exit and the complete list of positions (longitude, latitude, date and time) are attached. Cross-referencing the date and time on the certificate of sale with the attestation demonstrates how the sale qualifies.
For yachts not equipped with AIS, it is recommended to provide a continuous record of GPS navigation together with the relevant extracts from the navigation log. Our experts check these elements against the declarations of the shipowner or captain.
The Regular package automatically delivers, at the end of each commercial operation, AIS position tracking, real-time access to fiscal data during the cruise and an automatic report of the taxable base. The Premium package adds the services of a navigation expert: full assistance before and during the cruise, a report with charts and evidence of navigation, a certified report valid for any tax audit, a cumulative annual 70% report, and an alert for anchoring in prohibited or restricted areas in French territorial waters.
No. The FLYN-YACHTING suite of products and services does not replace your advisors, agents or tax representatives: it complements their expertise by automating complex and repetitive analyses and by providing them with accurate, reliable and well-documented navigation data. It remains the responsibility of the professional ordering the product to ensure that the yacht’s tax, customs and commercial status complies with the required conditions.
With the exception of certain real-time alert services, no FLYN-YACHTING analysis is fully automated. Every product and certificate is drawn up, verified and countersigned by a navigation expert: behind every product, there is an expert.
Depending on requirements, our certificates can cover anything from a few hours to several years of navigation history. Our technology relies on a database of nearly 80 million yacht positions, which also makes it possible to reconstruct and document a situation retrospectively in the context of an audit or a dispute.
Our navigation experts will get back to you shortly to review your situation.