The experience with the yacht tax illustrates the difficulty of taxing highly mobile assets and wealth. As the Zucman tax is being debated, history seems to be repeating itself.
A telling example: the yacht tax
In 2018, the French government introduced a tax on yachts over 30 meters in length. The stated goal: €10 million in tax revenue per year. The reality is quite different: by 2024, only €60,000 had been collected. In other words, a drop in the bucket.
Why such a failure?
Because yachts, unlike real estate, are by definition mobile. A few dozen major owners simply moved their home ports to marinas in Italy, Spain, or Monaco, thereby avoiding the tax. The number of vessels affected in France dropped to 5 in 2025, down from several dozen previously.
This exodus is no secret.
As a local elected official interviewed by Europe1 explains, “the French Riviera is losing its yachts.” The Guardian makes the same observation: “French Riviera yachts sail to Spain and Italy as tax clampdown bites”
Fuel and Taxation: A Deterrent Combination
While the yacht tax has captured media attention, the real economic reason for the departures lies elsewhere: the price of fuel.
A 50-meter yacht can consume several hundred liters of fuel per hour while underway, depending on its speed and design. For example, some models consume around 400 to 500 liters per hour at full speed, while in economical cruising mode, consumption can drop to around 100 to 200 liters per hour.
With tanks that can exceed 50,000 liters, a full tank easily costs tens of thousands, or even over a hundred thousand euros, depending on local fuel prices. It is precisely on this point that Italy and Spain offer a major competitive advantage, thanks to more favorable tax rates on fuel for yachts.
The result: even without the yacht tax, many owners would have moved their bases. But this tax, combined with payroll taxes on crews and French rules on VAT for charters, has reinforced a perception of hostility.
As one observer quoted by FEE.org puts it: “An excessive tax destroys the very foundation on which it is based.”
A colossal loss of revenue for the local economy
The issue is not merely fiscal. At stake are the positive externalities generated by the presence of yachts:
- Fuel refueling in French ports
- Mooring fees and berth rentals
- Local jobs in maintenance, provisioning, catering, and cleaning
- Indirect spending by owners and their guests on hotels, restaurants, and luxury goods
According to industry estimates, a 40-meter yacht generates approximately 1 million euros in local economic impact per year.
By driving away a few dozen vessels, France has lost far more than the expected 10 million euros. Italy and Spain, on the other hand, have benefited from this influx, reaping both the taxes and the associated economic activity.
The parallel with the Zucman tax
Why is this story resurfacing today?
Because the Zucman tax, proposed at the international level to tax the ultra-wealthy based on their financial fortunes, raises the same questions.
Just like a yacht, a portfolio of assets or a tax residence is highly mobile. Wealthy individuals have the means and flexibility to move their tax residence or assets within a few months.
Jean-Baptiste Say, as early as the 19th century, wrote:
“An excessive tax destroys the very foundation on which it rests. Conversely, a tax cut, by increasing public enjoyment, boosts tax revenue and shows governments what they gain by being moderate.”
The French government has not learned from its mistakes: rather than seeking to attract and retain this international clientele, it sends off-putting signals.
The crucial choice between moderation or flight
The failure of the yacht tax has become a textbook case.
- Target: €10 million in tax revenue
- Reality: €60,000 collected
- Consequence: billions lost in local economic benefits
The lesson is simple: the more mobile an asset is, the less effective punitive taxation is.
In the case of yachts, the new home ports are “delighted”: they sell fuel, charge for mooring, and keep shipyards in business. As for the billionaires, other financial hubs will welcome their investments.
When it comes to taxation, competitiveness isn’t just about rates, but about the overall perception of attractiveness. And France, in this regard, seems determined to send the wrong signals.
