It definitely is the right time to book your Italian Charter for season 2021.
The Italian Agency of Revenue (Agenzia Delle Entrate) never ceases to amaze us. This time positively! This past 30th September the Resolution N. 62/E has been issued and released by Rome.
For all intents and purposes the new Resolution provides that the old VAT scheme (also known as the “6.6% rule”) will still remain applicable to all charter contracts concluded within 31st October 2020.
Please know that Resolution 62/E 2020 applies either to short term contract (Charter) and to long terms contract, leasing contract, rental contract and similar ones.
We need to remind you all that for the Italian law (art. 1326 Civil Code) the contract is concluded in the moment, in which the offeror gains the knowledge of the acceptation by the offeree.
The acceptation must reach the offeror by the time limit set up by himself or by the time usually necessary according to the nature of the contract or according to general use. The offeror can hold effective the late acceptation, if he informs the other party immediately about this decision. If the offeror requests a certain form for the acceptation, the acceptation has no effects if it is set up in another form. An acceptation not corresponding to the offer is a new offer.
An Addendum where new terms and conditions are agreed corresponds to a new contract.
Therefore be careful on later addendums as it all depends by the provisions (e.g. new departure place, etc.) contained into the contract agreement stipulated by the parties and the date when the contract agreement is considered as concluded by the law.
We have received a press release issued by the French Nautical Federation (FIN). You will find here below for your review an in-house translation.
The press release states that the French government has agreed to postpone the application of the new tax regulation related to charter hire (VAT due on the exact time of navigation in EU waters and the abolition of the 50% lump sum reduction).
This certainly would come as great news to our industry during these difficult times however we are waiting for the official confirmation to be issued from the French government in this regard.
Please find below the translated text from the FIN’s press release:
PRESS RELEASE | 25 March 2020, Paris
Applicable VAT Regime on charter hire: the Federation obtains a postponement of the new measure.
Following constructive contacts with the office of the Minister of the Economy, the FIN informs the professionals in the nautical sector of the suspension of the reform project aimed at modifying the 50% lump sum VAT reduction that applies when navigation outside the territorial waters of the European Union occurs during a charter.
“For several months now, we have been working in close coordination with the Government services on this subject. Until the Covid-19 crisis, we were moving forward on a common position with our Italian counterparts. This work will resume after the health crisis. We have pleaded with the government for the suspension of the measure that should have applied on 1 April. This is a relief today. This decision should be made official in the next few hours,” said Yves Lyon-Caen, President of the FIN
In the light of this the French Finance Minister has cancelled the implementation of the new regulation (see more here) due to the current situation of COVID-19 pandemic.
As the changes made to the conditions for determining the taxable base have been withdrawn, the VAT lump sum reduction (20% on 50% of the charter fee) is still applicable in the case of cruising in international waters (BOI-TVA-CHAMP-20-50-30).
For what is concerned to Italy the UCINA Confindustria Nautica is currently dealing with the Italian Authorities to do take analogous measures and therefore to postpone the application of the new rules in order to keep the old taxation law for all Charters to execute during season 2020 (taxation at 22% on 30% of the agreed Charter Fee).
The Italian Council of Ministers has overturned plans and announced the country’s new financial measures for 2018. Italian value-added tax will not rise in 2018, although it is scheduled to increase in 2019 and 2020 asper below listed:
10% VAT will go up by 1.5% in January 2019 and a further 1.5% in 2020.
22% VAT will increase by 2.2% in 2019 and by an additional 0.7% in 2020 and another 0.1% in 2021.
Excise Tax will also go up in 2019.