Marina Berth Investmentin France: The Legal and Tax Framework

The Investment Structure: Shares Conferring Berth Enjoyment

Investing in a French marina berth means becoming a shareholder of a private company that holds a concession from the municipality to operate a leisure port. The company grants each shareholder exclusive and private use of a specific mooring berth. Direct ownership of an individual berth is impossible because the underlying land forms part of the domaine public — ownership cannot vest in a private person. What the investor acquires is instead a cluster of shares (actions) that carry the right to enjoy a specific berth for the duration of the concession.

Municipal Competence and the Administrative Concession

The creation, development, and operation of ports whose dominant activity is leisure (ports de plaisance) falls within the competence of municipalities under C. transports Art. L 5314-4. To exercise this competence, a municipality may grant an administrative concession either to a public body — such as a chamber of commerce and industry — or to a private entity, typically a société d’économie mixte (SEM). Private companies holding leisure port concessions almost always take the form of a société anonyme d’attribution en jouissance.

The Société Anonyme d’Attribution en Jouissance

Because direct ownership (attribution en propriété) of berths is legally impossible on public domain land, the allocation of guarantees of use (garanties d’usage) of individual moorings to the shareholders who financed the port infrastructure is established through a règlement de jouissance. The shares are grouped into indivisible clusters, each cluster giving its holder the exclusive and private right of enjoyment of a specific identified berth for the duration of the concession. The articles of association and the règlement de jouissance may also include conditions imposed by the conceding authority on matters of port policing, security, and inspection.

Taxation of the Concessionaire Company

Fiscal Transparency: CGI Art. 1655 ter

Where the company’s exclusive purpose is to transfer to its members the enjoyment of the mooring berths, it may invoke the regime of fiscal transparency under CGI Art. 1655 ter. The consequence is that the benefit in kind — the enjoyment of the berth — is not taxed at the company level, and shareholders are exempt from income tax on the advantage in kind received.

However, where the company also has the purpose of commercial exploitation of the parts of the installation that are open to the public, it no longer meets the exclusivity condition of CGI Art. 1655 ter and becomes subject to corporate income tax (impôt sur les sociétés). A partial IS relief applied for advantages in kind granted to shareholders under CGI Art. 239 octies: the net value of the benefit in kind was not taken into account for IS, and was exempt from personal income tax at shareholder level. This provision ceased to apply after 31 December 2023, having been repealed by Finance Act 2019-1479 of 28 December 2019, Art. 136.

VAT on Port Receipts

The VAT treatment splits along the public/private divide of the port’s activities:

• Public port service receipts: subject to VAT in the ordinary way;
• Private portion — share subscription proceeds: outside VAT scope. They are the price of acquiring a property right, not consideration for a supply of services;
• Private portion — services to members: may qualify for VAT exemption under CGI Art. 261 A, provided the services are indispensable to the use of the berth and the receipts correspond strictly to the reimbursement of the members’ share of common expenses — which excludes any element covering provisions for future expenditure or depreciation of assets;
• VAT on construction works: the concessionaire company cannot recover VAT on works in the private portion, because the corresponding receipts from shareholders are not subject to VAT. Conversely, VAT on works in the public portion pursuant to the concession obligation may be recovered where the cost of those investments forms part of the price of the public service subject to tax.

Taxe Foncière on Port Infrastructure

Where a public domain concession agreement provides for the free reversion to the state at the end of the concession of the installations constructed on state land, those installations are incorporated into the state domain from the date of their establishment. Accordingly, the taxe foncière sur les propriétés bâties on the land and installations must be assessed in the name of the state — even where the concession agreement makes the final economic burden fall on the concessionaire. Three Conseil d’État decisions have confirmed this principle:

• CE 16 November 1988, nos. 47685-47741 (Commune d’Arcachon): the concession contract’s provision that the concessionaire bears the taxe foncière charge does not alter who is formally assessed;
• CE 5 May 2010, no. 301419 (Commune du Grau-du-Roi): same principle confirmed;
• CE 21 October 2013, no. 358873: a clause providing for an end-of-concession indemnity to compensate the concessionaire for unamortised assets has no bearing on the taxe foncière assessment — the state remains the formal taxpayer regardless.

The concessionaire company is separately liable for the domanial fee (redevance domaniale) for its occupation of the public domain.

Taxation of Share Disposals

The disposal of shares in a marina concession company that confer the right of private enjoyment of a berth gives rise to a tax treatment that departs from ordinary share transfer rules. French courts have consistently treated these transfers as disposals of immovable property rights.

Transfer Duties: Shares Treated as Immovable Property

Under CGI Art. 728, share transfers that are not subject to VAT are deemed to have as their subject matter the immovable property or fractions of immovable property to which they give entitlement. The shares are therefore subject to the droit de vente d’immeuble (generally 5.80665%) rather than the ordinary share transfer duty rate of 0.1%. The transfer must be registered within one month of its date, whether or not it has been made in writing. The Cour de cassation confirmed this treatment in three decisions directly concerning marina berth shares: Cass. com. 15 March 1994, n° 740 P (Société Yachting courtage); Cass. com. 15 March 1994 (Ugolini); and Cass. com. 30 May 1995, n° 1107 D (SCI Baie des Anges).

The Tax Base: Port Services Cannot Be Deducted

A key question is whether the value of the port services intrinsically attached to the berth right can be carved out from the transfer price and excluded from the duty base — on the argument that part of the price reflects a service right rather than a property right.

The Cour de cassation rejected this argument definitively in Cass. com. 30 June 1998, n° 1402. The Court held that the shares confer a right of enjoyment of a mooring and anchoring berth that necessarily includes the right to use the various services offered by the port infrastructure of which the company is the concessionaire. Because these services are intrinsically attached to the right of enjoyment conferred by the shares — they valorise the immovable right to which they are attached and cannot be dissociated from it — they have no independent value that could be deducted. Transfer duty is therefore assessed on the total transfer price of the shares, without reduction for the ancillary port services. This is confirmed in BOI-ENR-DMTOM-40-30 n° 80.

Legal Notice. This article is provided for general information and educational purposes only. It does not constitute legal or tax advice. The CGI Art. 239 octies partial relief for IS companies with commercial port activities ceased to apply after 31 December 2023. Transfer duty rates are those applicable under the general regime; specific rates or exemptions may apply in particular circumstances. Always consult a qualified French tax lawyer and notaire before any marina berth share transaction.