In regards to our recent news about the VAT exemption regime applicable to vessels chartering in Italy, the Italian Revenue Office (Agenzia Delle Entrate), according to the new Italian Budget Law 2021, has finally issued and released the necessary guidelines and declaration form to fulfill and file with electronical transmission.
The assigned number and details of the protocol attesting the successful transmission to the Revenue Office digital system must be kept on file and indicated in the invoices of the suppliers.
As a consequence of this, starting from 15th August 2021, the current procedure (the paper form to send to the Supplier) to obtain the VAT exemption will no longer be valid.
Please find below (also litsted into our DOWNLOAD area”) the Protocol RU-0151377 published on 15th June 2021 by The Italian Revenue Office along with the relevant guidelines.
Before executing the electronic transmission of the declaration form to the Italian Revenue Office, the owning company will need to perform the necessary calculation to confirm the +70% of trips at the international waters (high seas) as well as it needs to always keep the related evidences and documental proofs in case of any control or official audit (contracts, copy of the logbook, AIS data or data extracted from any other electronic on-board navigation, invoices and receipts) by the Authorities.
We point out that very strict penalties and sanctions are foreseen in the event of an official audit by the Italian Tax Authorities in the case that the owning company will not be able to demonstrate what has been declared. on this end, we strongly recommend to always keep on file for a minimum of 6 years all the necessary evidences confirming what it has been declared to the tax Authority on the electronic declaration form.
Yacht Welfare is at your disposal to provide further details.
to our news released on 19th December 2019 (see here for more info: www.yachtwelfare.it/vatreduction) this past 25th May 2020
the Italian Revenue Office (Agenzia Delle Entrate) has finally put under Public
Consultation a draft concerning the provisions for the application of the VAT
reduction on Italian charters, according to the EU’s articles 56 and 59 of the
EU VAT Directive 2006/112/CE.
credited method to calculate the actual VAT due would seem to be a pro-rata
reduction based on the cruising outside the European territorial waters,
according to the real time or to the actual cruising miles spent at “high sea”
(international waters), in accordance to the hereinbefore mentioned article
the main focus is to find and agree the list of papers, equipment and methods
to determine the actual use of the yacht outside the EU territorial waters and
so the exact VAT due in Italy.
date, finally, the new law will come into force only from its official
means that any charter signed before the official publication of the new law
will be subject to the old legislation (e.g. 6.6% flat-rate reductions on
there’s still the chance that the Italian Minister will decide to follow in the
footsteps of the French Finance Minister and so to suspend until 2021 the
implementation of the new regulation in order to revitalise the yachting
industry, especially after the recent situation of COVID-19 pandemic.
We will let
you know about the progress of this long-awaited decisions as soon as possible.
with us in the forthcoming weeks to know and assess the developments.
Italy is sailing again! With his last DPCM (Decree of the
President of the Council of Ministers) released on May 16th 2020 the
Italian Prime Minister expressly authorised the possibility to sail in Italy within
the region of residence. This rule will last until 2nd June.
As of June
3rd 2020 the regional limit will fall and it will be possible to freely
sail around all the Italian coasts.
Also – not
less important – from this date June 3rd) the Italian Government
will reopen the borders to all EU citizens without the need to spend quarantine
This is the
clear sign that the Mediterranean summer 2020 is finally started.
sector has received the go-ahead for the measures to be taken for the
resumption of the charter activity.
measures consist in very simple procedures, most of which are now widely known
has been confirmed that a COVID-19 test will be required for the charter’s
permanent crews, who will need to deal with many different guests, especially
on large yachts.
Ministry has pointed out that in pleasure yachting the individual
responsibility is the essential element in making social distancing measures
a. interpersonal distance of at least one meter
b. avoiding close contact
c. proper sanitization of spaces
d. nose and mouth protection for passengers
make it clear that the rules published by the Ministry regard pleasure
yachting, chartering, renting as well as the management of ports and marinas.
Below you will find the key points to respect when sailing in Italian waters.
/ PLEASURE YACHTS
measure remains the “social distancing”. As you all know this means
that persons need to stay at least one metre from each other, unless they are
part of the same family or live together.
Even the relatives, if not living together, must respect the social distance of one person for each linear metre of the boat. The provision of personal protective equipment for passengers and the use of surface sanitizer are also mandatory.
/ CHARTER YACHTS
preventive rules for private vessels apply to yachts engaged in charter
activities. Only persons living in the same family are allowed to stay together
in the same cabin.
is required to sanitize all the yacht’s areas, including the engine room and
services. Owners are also obliged to provide adequate supplies of sanitizing
products as well as information signs, written in several languages, to make
the charterer and his guests aware of the necessary social and hygienic
measures to take.
specific measures must be adopted by the crew; let’s see which ones.
crews have the obligation to use masks and gloves and any other protective
equipment depending on the type of the boat and the particular circumstance, for
instance during mooring, unmooring, bunkering and towing operations.
– being called in some cases to carry out first aid actions (as in the case of
the Captain for whom the elementary first aid course and BLS is compulsory) – there
should be the obligation to undergo a preventive (before boarding the yacht)
and periodical first aid test at COVID-19, the result of which must be duly kept
each member of the crew is mandatory the measurement of the temperature on a daily
must also implement the prevention of unauthorized access to the ship to
strangers, while in port or at sea.
generally live in the same house are allowed to share accommodation in the same
Also for guests the general rules on social distancing and interpersonal prevention measures apply (i.e. one person per meter of the linear length of the boat, including crew members, unless the guests live together).
PORTS AND MARINAS
The managers of Italian marinas must provide their ports with special information signs, written both in Italian and English language, on the measures of conduct to respect, the use of personal protective equipment (PPE/DPI), the installation of sanitizing dispensers on the docks, the limitation of movements, bans on gatherings and the respect for social distancing.
AND SYSTEM RULES
mandatory to comply with the regulations for travel within the Region and
between Regions and the respect of international anti-contagion laws during
navigation outside national territorial waters.
As this is changing for the better day-by-day we strongly recommend all of you to stay tuned to our website www.yachtwelfare.it/news to know the latest updates.
For what is
concerned to the VAT due on Italian charters, UCINA (Confindustria Nautica, the
Italian Marine Industry Association) is still dealing with the Italian
Authorities to postpone the application of the new law (see here for more info www.yachtwelfare.it/somegoodnews). Everything leads to the hope that
Italy will quickly join the decision taken in France, repealing the provisions
contained in the new law and giving continuity to the old flat rate reduction
percentages scheme (i.e. taxation at 22% on 30% of the agreed Charter Fee for
yachts over 24 metres, equal to the “quick” rate of 6.6%) in order to
guaranteeing “certainty” for operators in the yachting sector,
especially now that they have just started their activity again after this
extraordinary situation and encouraging yachts to come to the Mediterranean for
the charter season.
know that the old legislation (flat-rate reductions on Charter Fee) will still be effective
in Italy until the publication by the Italian Tax Office of appropriate
provisions containing the clear list of methods and means suitable to
demonstrate the effective use of the service outside the European Union.
The French Customs Office has released important
dispositions and clarifications about yachts engaged in commercial and
transport activities (e.g. charter).
25% DUTY TO APPLY TO US BUILT BOATS
The French Customs Office confirms that every US
built boat having commercial registration and officially imported in European
Community before the 22nd of June 2018 will be exempt from the
payment of the 25% customs duty on the boat’s return in Europe if all the
standard import formalities will be executed (the same formalities and
practices arranged before the 25% rule).
The same principle applies for boats exported from
EU before the same date (Export Declaration is required. In absence of this Declaration
an alternative proof of exportation has to be provided).
All the boats having completed the import back to
the European Community can benefit from FCE/ICE (French Commercial Exemption /
Italian Commercial Exemption) advantages according to the +70% rule.
If the boat has been imported under the FCE/ICE
regime in 2018, it is still required to provide the proofs attesting its
qualifications to take advantage of the same benefits (+70% international
Therefore, we confirm that any and all US built
boats falling within the below listed cases:
1. never imported
before the 22nd of June 2018, or
before the same date but having changed the Owning Company (sold/purchased)
are subject to the
application of the 25% customs duty.
CHARTER UNDER TEMPORARY ADMISSION STATUS
Besides, all US built boats never imported before
the 22nd of June 2018 will have the possibility to perform
commercial activities (Charter) under Temporary Admission status, whether the
boat is registered as commercial or private (in the latter case only if the
Flag Registry admits this condition).
However, there are specific restrictions to the
impossibility to have EU resident Charterers
b. at present
not all the EU Members States still permit a boat under Temporary Admission to
execute commercial activities (Charter).
In regards to non US built boats (EU or non-EU) registered
as commercial and to coming to Europe to execute commercial activities
(Charter), which are under “Import Status”, the FCE/ICE benefits apply to all
those non-EU boats (as well as to some EU boats in specific cases: more info
will follow) intending to execute commercial activities (Charter). This is
the only case in which the Charterer can be a EU resident.
Concerning the non-EU boats which will not be
imported (both Commercial and Private registered), they will only have the
possibility to execute Charters under the regime of Temporary Admission and
will not be entitled to charter to EU resident subjects.
As far as is concerned to side boats
(chase-boats/tenders) having own registration and which are employed to attend
the mother ship (main vessel), we are still waiting for the necessary
clarifications by the Customs about the possibility to charter said chase boats
to EU residents.
All the hereby listed rules and information provided
might be subject to variations by the Customs Office.
Therefore please always contact us to know if something
has been changed, integrated or just updated.
Companies identified for VAT in Italy by a Fiscal Representative are not
required to be accredited to the SDI – Interchange System (SDI – Sistema di
Interscambio ) for the e-invoicing procedure introduced by the Italian Tax
Authority (Agenzia delle Entrate) starting from January 2019.
Decree N. 119/2018 (art. 15) amends the Italian regulation that introduced the
mandatory electronic invoicing starting from 1st January 2019 (art.
1, para. 6 of Law Decree no. 127/2015) according to Implementing Decision (EU)
2018/593 from 16 April 2018 – which authorized Italy to the widespread use of
electronic invoices – specifying that the obligation applies only to
subjects established within the State (Italy) and not to foreign subjects identified for Italian VAT purposes, but
not residing therein. This amendment implements what had been anticipated by
the tax Agency in its Circular Letter no. 13/2018.
Owning Companies do not have the obligation to issue electronic invoices
means that the actual procedure does not change and each invoice relevant to
VAT due on Charters – having fiscal applicability in Italy – will still need to
be issued in hard copy (paper format).
note that all the paper invoices issued by suppliers will need to contain the
following wording: “copia cartacea della
fattura” (translated: hard copy of the invoice). This will allow the Owning
Company to still be able to deduct the VAT debited by the supplier. A “courtesy-copy”
of the same invoice can be sent by the supplier to the client in digital format
(e.g. pdf file sent by email).
The new Italian VAT Guide for 2018 is now online.
Please feel free to download it here or below.
Stay tuned and make sure to comply with the rules.
We remain always at your disposal for any sort of clarifications.
Any need please email us to firstname.lastname@example.org.
Please find below some important info to know about chartering in Spain:
As is well known, chartering in countries like France, Italy or Malta can benefit from really reduced VAT rates on charter fees. This is not the case in Spain. What is the reason why? Let’s find out what are the legal grounds on which this VAT reduction is based and what other implications this legal provision has.
Article 58 of EU Council Directive 2006/112/EC, VAT Directive, entitled “criterion of effective use and enjoyment”, provides that:
In order to avoid double taxation, non-taxation or distortion of competition, Member States may, with regard to the supply of the services referred to in Article 56(1) and with regard to the hiring out of means of transport:
(a) consider the place of supply of any or all of those services, if situated within their territory, as being situated outside the Community, if the effective use and enjoyment of the services takes place outside the Community;
(b) consider the place of supply of any or all of those services, if situated outside the Community, as being situated within their territory, if the effective use and enjoyment of the services takes place within their territory.
How does this affect chartering in the EU and more specifically chartering in Spain?
As the article lays down in its first paragraph, Member States may, which means this is an optional criterion which might be applied by each Member State or not. Having said this, we must distinguish what is stipulated in paragraphs (a) and (b).
Paragraph (a) – as it is clearly defined, the provision seeks to minimize VAT taxation applicable to certain services, among them the hiring out of means of transport (for instance charter), when part of the enjoyment takes place outside the Community. This provision or approach is in place in France or Italy which allows chartering in these countries to benefit from reduced VAT rates. However, this is not the case of Spain, which making use of its optional right, did not implement this provision in the internal Spanish VAT law. Therefore, chartering in Spain is subject to a flat VAT rate which does not benefit from any reduction even sailing beyond 12 nautical miles.
Paragraph (b) – the second part of the article seeks to subject to VAT certain services, which, although according to the rules on the place of supply can be understood to be provided outside the Community, their effective enjoyment takes place in the Community. This might be the case of a charter starting in Montenegro or Gibraltar, territories outside the Community, and visiting a Member State. There are certain countries which apply this approach, such as Italy. This is the case of Spain too. Spain implemented this provision in article 70.Two of the Spanish VAT law. Therefore, although not very well known, this rule is in force in Spain.
In practical terms, this would involve for instance that a charter starting in Gibraltar and visiting Spanish territory would oblige the yacht owning company to register for VAT in Spain and to pay to the Spanish tax authorities VAT on the length of the charter taking place in Spain.
Therefore, it cannot be said that the use and enjoyment provision is not in practice in Spain. It is, but unfortunately only the more burdensome part of the EU provision is applicable.
For further information, please email our Spanish referent Mr. Alex Chumillas to email@example.com or send your inquiry to firstname.lastname@example.org. We are always pleased to assist you and remain at your disposal.
Thank you to our Spanish partner Mr. Alex Chumillas:
Given the new ruling by MYBA in regards to the APA (for more info see also here www.yachtwelfare.it/clarifications-on-apa-june-2016) the VAT collected on the expenses to meet navigation requirements, such as fuel and oil for the engines and on-board systems, needs to be remitted to the Italian Revenue Office along with the VAT collected on the Charter Fee.
To that end the amount of VAT raised by such expenses is to be immediately wired to Yacht Welfare at the end of the charter.
Yacht Welfare, on behalf of the yacht’s owner, will issue a separate invoice for APA which is required to regulate the hereinbefore mentioned operations.
For this reason there is undoubtedly a need to receive the APA report, duly fulfilled by the yacht’s Captain and countersigned by the Charterer, within the shortest time right after the disembarkation of the charter.
For the sake of clarity Yacht Welfare hereby informs all its Clients that penalties and delay fees will always apply for any late remittance of VAT raised by the expenses paid with APA.