Representatives in the French Riviera have written an open letter to French President Emmanuel Macron, claiming that high taxes and regulations are driving away wealthy individuals.
Local officials are particularly concerned about the plight of yacht owners, a famous sight around Cannes and the French Riviera’s other port towns. According to them, the iconic Saint-Tropez has lost 30% of its business in 2017, while Toulon has lost as much as 40%.
This even extends as far as the ancient port city of Antibes. Often referred to as Europe’s largest port, this favoured refuge for sun-seeking billionaires has experienced a similar drop in revenue, according to France’s Chamber of Commerce.
Fingers have been pointed at France’s strict new diesel regulations, which were ramped up as part of a response to the Paris Agreement. This has led diesel fuel to cost more than twice as much for the French Riviera’s ships as in Italy, where it is still offered VAT free.
Another new tax hike targeting ship owners has been seen as particularly damaging. The March 2017 decree requires ship owners to pay national insurance contributions for every French crew member, often elevating operating costs in the French Riviera to the hundreds of thousands.
According to Antibes’ port director Frank Dosne, the tax pressures have elevated the rates required of yacht owners from 15% to around 55%. Many have called for taxes to be unified at the European level, creating parity between locations for ship owners to choose from.
The Nice Chamber of Commerce – one of the towns affected – states that these cumulative tax pressures represent weekly costs of 20,000 euros for the average vessel. Dissenting yacht owners are believed to have largely fled to Italy, where costs are now substantially lower.
Interestingly, this outcry may play into the plans of President Macron. The tax changes were put in place by the outgoing Socialist government, and Macron has spoken openly of his desire to create more binding economic ties between European nations.
Macron may want to make haste, however. With the summer period in full swing, the area stands to lose out on a significant amount of tax revenue. The Provence-Alpes-Côte d’Azur region is home to some 142 ports, hosting around 2300 companies and 9600 employees.
For any advice around tax arrangements in France, Italy or elsewhere, or any other accountancy related queries, do not hesitate to contact us.