However, one often overlooked risk can undermine the regime entirely: the definition of EU residence for customs purposes.
This is not a tax residence question. It is a customs law question governed by the Union Customs Code and its implementing provisions, including Commission Delegated Regulation (EU) 2015/2446. Importantly, customs residence is not the same as tax residence and is assessed independently.
Understanding how residence is assessed is critical for any owner with meaningful European connections.
The Residence Test under Temporary Admission
For a pleasure yacht to qualify under Temporary Admission:
- The yacht must be registered outside the EU
- The yacht must be owned by a person established outside the EU
- The yacht must be used by a person established outside the EU
The third condition is frequently where risk arises.
For customs purposes, an individual is considered resident where they have their “normal place of residence”, generally defined as the place where they habitually live for at least 183 days per year due to personal and occupational ties.
Importantly, this assessment is made across the EU customs territory as a whole, not country by country.
Cumulative presence across the EU
Many yacht owners assume that spending fewer than 183 days in any single EU country preserves non EU status.
This assumption can be incorrect.
If an individual spends:
- 80 days in France
- 70 days in Italy
- 60 days in Spain
The cumulative presence is 210 days in the EU customs territory. Even if no single country exceeds 183 days, customs authorities may conclude that the person’s normal residence is within the EU.
Where personal ties exist in Europe, such as family homes, schooling or established lifestyle patterns, the risk increases.
For owners based in Monaco, this point requires particular attention. Although Monaco is not an EU Member State, it forms part of the EU customs territory through its customs union with France. Time spent in Monaco is therefore highly relevant in a customs residence analysis.
Customs residence is distinct from tax residence. A person may not be tax resident in any EU country, yet still be considered resident in the EU for Temporary Admission purposes.
What happens if residence status changes?
If a yacht under Temporary Admission is used by a person considered EU resident for customs purposes, the regime may no longer apply.
The potential consequences include:
- Immediate loss of Temporary Admission status
- Assessment of import VAT in the Member State where the issue is identified
- Possible administrative penalties
Importantly, corporate ownership through a non EU company does not automatically resolve the issue. Customs authorities look beyond the owning entity and assess who is actually using the yacht.
Why this risk is increasing
Customs authorities across the Mediterranean are increasingly attentive to:
- Long term berthing in the EU
- Regular seasonal return patterns
- EU based crew and operational control
- Owners whose lifestyle is effectively centred in Europe
How Rosemont assists yacht owners
Rosemont Yacht Services teams works with owners, captains, family offices and advisors to manage Temporary Admission risk in a structured and practical manner.
Our support includes:
- Residence Risk Assessment: We analyse cumulative EU presence, personal ties and factual lifestyle indicators to determine whether Temporary Admission conditions remain satisfied.
- Structural Review:We review ownership structures, SPVs and management arrangements to ensure consistency between legal form and actual use.
- Operational Guidance: We advise on practical matters such as home port choice strategy, charter versus private use, and record keeping to support customs compliance.
- Coordination with Advisors: Where required, we liaise with the owner’s tax counsel and flag state representatives to align the yacht’s operational profile with the owner’s wider residency position.
- Ongoing Monitoring: For clients with dynamic travel patterns, we help implement tracking and governance processes to ensure that cumulative EU presence does not inadvertently trigger a customs residence issue.
A Proactive Approach Is Essential
Temporary Admission is not a passive regime. It requires active ongoing management, particularly for internationally mobile families with strong European ties.
For yacht owners with connections to Monaco, France, Italy, Spain or other EU jurisdictions, the cumulative residence test is a critical compliance factor that should be monitored carefully and documented properly.
Rosemont Yacht Services provides personal, experienced and technically robust support to ensure that Temporary Admission arrangements remain defensible, sustainable and aligned with the owner’s broader lifestyle and structuring objectives.
Rosemont teams can also advise of alternative yacht ownership structuring strategies taking into account to owners ‘ circumstances, and the intended use of the yacht.
Read more here.
For owners navigating complex EU connections, early advice is significantly more effective than reactive correction.