A briefing note from lawyers at Baker & McKenzie said that the change was prompted by a decision in a Luxembourg VAT dispute that was referred to the Court of Justice of the European Union.

The standard VAT rate in France is 19.6 per cent.

There has been a VAT exemption for the supply, modification, repair, maintenance, chartering and hiring of ships and boats carrying passengers for reward. The court asked if this exemption included providing services relating to making a vessel available for leisure travel on the high seas.

If the vessel is to be used for leisure purposes, and not financial gain, then the chartering or leasing of that vessel will not fall within the VAT exemption, the law firm said.