70% Rule Yacht VAT Compliance — High Seas Qualification
Counting and certification of qualifying international commercial voyages against the 70% high-seas threshold.
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VAT & 70%
Yacht VAT Compliance for Commercial Operations
Calculation and justification of the VAT rate applicable to each leg of a charter or transport agreement, through to the final invoice wording.
Only the activity carried out within the fiscal territory — EU waters for charter, national waters for transport — is subject to VAT. From the yacht’s AIS positions, FLYN-YACHTING calculates the genuinely taxable share of each agreement and the resulting VAT rate.
Charter agreement
For a charter agreement, activity is measured by the time spent in commercial operation. VAT is due only pro rata to the time spent in EU waters, at the rate of the country of departure (20% in France, 22% in Italy).
Example French Riviera – Ibiza – French Riviera: with 8 h in French waters, 118 h in Spanish waters and 43 h in international waters, the pro rata reaches 74.5%, i.e. a resulting VAT of 14.9% instead of 20%.
Transport agreement
For a transport agreement, activity is measured by distance travelled. VAT applies only to the distance within the territorial waters of the country of departure; voyages qualifying as “international” are fully exempt.
Reduced rates exist (2.1% in Corsican waters) as well as specific exemptions. On the previous itinerary, transport VAT can fall to 1.4%.
Deliverable
- Resulting VAT rate, per leg and for the whole agreement
- Justification through AIS positions and mapping
- Final invoice wording that can be shown to the administration
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