Q: Who can benefit from the French leasing scheme?
A: Clients that seek to reduce the value-added tax. Please note: The yacht has to be delivered in France personally to the client.
Q: How is the VAT calculated?
A: The French leasing is based on a flat-rate taxation of the lease instalments at a rate of 50% of the French VAT rate. At present (July 2016) VAT on lease instalments is 10%.
Q: How high are the total costs?
A: That depends on the chosen lease duration and down-payment. At 50% down-payment and 5 years duration the total costs of the lease are currently just below the gross purchase price of your yacht. Financing of your yacht is virtually free of cost.
Q: Which boats are eligible for French leasing?
A: All boats which have no EU VAT paid status are eligible - all new boats and in exceptional cases used boats. Also your boat has to be able to leave EU-waters being moored close to the coast and equipped with radio and a life-raft.
Q: Do I have to prove that I have left EU-waters?
A: CGI Finance and SGB Finance require a general annual statement from you confirming that you have left EU-waters. There is no obligation to prove single journeys.
Q: Are EU-taxes paid on the yacht from the beginning of the lease?
Q: What is the legal basis of the French leasing?
A: The EU Directive 2006/112/CE as amended by the Directive 2008/8/EC relates to VAT applicable to the provision of services and the place of supply of these services. The rules confirm that for the long term hiring of pleasure vessels by E.U. consumers, VAT on lease instalments will be subject to the French VAT regulations if the vessel is put at the disposal of the lessee in France. This rule is stipulated as well in the German Tax Code (see §3a (3) 2. 4. Satz UStG). The French tax regime set out in the provisions of Section 259 A 1 of the General French Tax Code and Section 172 of Annex 11 thereto state that VAT is payable on lease instalments accordingly to the amount of time spent in E.U waters. If the vessel is sea-going then, under the provisions of the French Administrative Regulation 3A-1-05 of 24 January 2005, VAT on lease instalments will be charged at 50%. Legal entities will pay VAT on lease instalments at the rate determined in the country in which they are established.
Q: Is the leasing contract drawn-up in German according to German law with a German flag and possible berth in Germany?
Q: How high must the down-payment be?
A: Between 30 and 50% of the purchase price incl. VAT. The down-payment has to be paid directly to the dealer of the yacht.
Q: Which durations are possible?
A: You can choose any duration between five and twelve years. In exceptional cases fifteen years may be possible.
Q: How can I keep monthly rates low?
A: Through a long duration. Of course, CGI Finance and SGB Finance pay attention to favorable conditions. But a long duration is the deciding factor in keeping the monthly charge low.
Q: Why should I choose a long duration even if I plan on changing the boat in a few years?
A: A long duration will keep the monthly charge low thus allowing you to invest less capital in your boat throughout the year. In this way you maintain financial flexibility and keep capital for other purchases and expenditures.
Q: Am I already legally bound when I sign the lease contract?
A: No, there is a legal revocation period of 14 days. This revocation period starts only upon receipt of the written offer acceptance through CGI Finance or SGB Finance.
Q: Are partial lease repayments possible?
A: Yes. However, they may not exceed leasing limits and have to be requested individually.
Q: May I cancel the contract at any given time?
A: Yes, you may settle the lease contract early but this will lead to additional costs. Instead you may choose to transfer the leasing contract to a third party. This third party – given the prior check of creditworthiness – takes over all rights as lessee thus protecting the VAT advantage.
Q: What happens at the end of the lease?
A: You may choose to make use of your purchase option thus ending the contract.
Q: What collateral do I need to provide for the lease?
A: In general, the boat is the only security needed.
Q: How does the provision of collateral work?
A: CGI Finance and SGB Finance register the boat in the ship register in Hamburg, Germany in their name, the costs of which are paid by CGI Finance or SGB Finance repectively.
Q: Do I need to pay administrative fees?
Q: How does the boat need to be insured?
A: CGI Finance and SGB Finance require you to take out a liability insurance as well as a comprehensive insurance. CGI Finance and SGB Finance work well together with Pantaenius but you as a client are free to choose your insurance company.
Q: May I charter out my boat?
A: Yes, but not with crew.
Q: Are other flags possible?
A: Yes, on request. CGI Finance and SGB Finance also finance clients in France, Spain, Italy, and the UK. CGI Finance and SGB Finance would be pleased to offer financial solutions for international clients residing in these countries.