France is navigating a significant shift in its relationship with the luxury sector.
The most direct “administrative shift” comes from the French Finance Act 2026, which has introduced a new 20% tax on “non-professional” assets held by holding companies. The measure specifically targets items like private jets and yachts often categorised as business assets to avoid personal wealth taxes, they say.
Tax Free Fuel?
And the choke on tax-exempt fuelling is tightening.
Already trending since January 2025, the management of fuel excise duty (TICPE) refunds and claims was officially moved from French Customs (DGDDI) to the Public Finances Directorate (DGFiP). The move is intended to streamline the data-matching between fuel consumption and VAT reporting, making it easier for the government to spot discrepancies.
A major legislative battle occurred in late 2024 and through 2025 regarding a proposed 33% VAT on luxury yachts. The 33% rate was ultimately rejected by the French Assembly in late 2025 due to industry pressure, but it has nonetheless led to more aggressive fuel audits.
What the new 20% wealth tax for certain yachts and jets also does is increase the incentive for the DGFiP to investigate whether a yacht claiming “commercial” fuel is actually a private asset.
Yacht Operators Beware
For yachts operating in French waters during the 2026 season:
- The 70% Rule: To maintain fuel tax exemptions, commercial yachts must prove that 70% of all navigation in the previous year was conducted outside French territorial waters AND that the fuel was used exclusively for commercial charter contracts.
- Documentation: French authorities are now frequently boarding vessels to check the “Declaration of Arrival” and fuel delivery notes against the guest manifest. Any mismatch between “commercial” fuel and “private” guests can result in immediate fines.
- Port State Control: There is increased coordination between the Mediterranean branches of the French and Italian tax authorities to catch yachts that “hop” across the border to refuel in Italy only to return to French waters.
This emerging regulatory landscape is part of a broader European trend that is drastically reducing availability of tax-free fuel for nautical and aviation assets in the historically kind region.
As specialist sector advisors, Y & A Group, LP works alongside yacht operators and managers to avoid unnecessary fiscal costs and risks.
Information in our Blogs is very general in nature and should not be acted upon without first consulting with a tax advisor. Please feel free to contact Y & A Group, LP to schedule a complimentary consultation.
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