The VAT rate in France is currently 20%. In an amendment to the Finance Act 2026, the LFI is calling for selected luxury products to be taxed at 33% in future. These should explicitly include sailing yachts and motorboats.
Yachts as luxury goods
The left-wing motion has already cleared the first hurdle. The National Assembly's Finance Committee has put the issue on the agenda. In the public debate, representatives of the water sports industry are now also voicing their concerns about the potential impact of such a luxury tax on the yacht and boat market.
When customers migrate
There are fears of a direct impact on local boat builders and suppliers. A market that represents a considerable economic force in France alone, with a turnover of around 5 billion and over 50,000 employees. Experts fear several specific consequences of a luxury tax for the yacht market:
New buyers could migrate to other EU countries with lower VAT rates and the market for new boats in France could collapse as a result. This would have a direct impact on the profits of French companies and would give countries without luxury tax a competitive advantage. There is also a risk that more owners will register their boats under a foreign flag in order to avoid the tax burden.
The "Tassa di stazionamento" tax fiasco
Just how quickly a tax reform in the water sports sector can change the industry in a European country was last seen in Italy in 2011. Following the introduction of the "Tassa di stazionamento", an annual ownership tax on boats over 10 metres, many yachts were relocated abroad. The service sector collapsed and the state recorded tax losses and rising unemployment in the coastal regions. High taxes on yachts and ships therefore did not effectively lead to more tax revenue, but damaged the domestic market in Italy.
The Brussels hurdle
However, it seems unlikely that a luxury tax can be implemented in the French parliament via the diversions of VAT. This is because this tax structure not only contradicts the legal and economic rules of the European Union, but is also unlikely to find a political majority in France.
A VAT rate of 33% would be significantly higher than the standards established in the EU. In order to deviate from this, France would have to apply to the EU for a derogation. This would require the unanimous approval of all 27 member states. In addition, the EU Commission has already taken concrete steps to ensure the correct taxation of yachts. The most recent example is the fight against illegal leasing models designed to circumvent VAT - for example in Malta and Cyprus.
Rules for second-hand yachts
When buying a new boat, the standard VAT of the EU country of delivery applies. It should be noted that sailing yachts are not subject to reduced rates in any EU member state. In contrast, most privately traded used boats do not have to be taxed again. Value added tax due, as it has already been paid. Instead, only the VAT certificate is sufficient in these cases.
Ships that have not left the EU for more than three years are classed as Union goods. As a rule, a current purchase contract with proof of payment and mooring invoices are sufficient proof of this. However, it is important to note that this status is also lost again if a boat has been out of the EU for longer than three years.
