what we have informed you about this past 16th June 2020 (see here
for more info www.yachtwelfare.it/new-rules-in-italy)
the new VAT rules (VAT at 22% due on actual time spent into EU waters) have
unexpectedly been postponed to 1st November 2020.
Minister has now decided – with a huge delay – to follow in the footsteps of
the French Finance Minister and so to suspend until 31st of October the
application of the new VAT rules in order to revitalise the yachting industry, especially
after the recent situation of COVID-19 pandemic.
So let’s keep
the old rule (e.g. 6.6% flat-rate reductions on Charter Fee) with the purpose
of implementing the Charter activity for the current summer season encouraging
(is anybody feeling encouraged now?) tourists to come to Italy.
The above is
part of the last “Simplification Decree” N. 76/2020 published on the Official
Gazette (Gazzetta Ufficiale, Serie Generale N. 178 del 16/07/2020, Suppl.
Ordinario N. 24), entered into force on July 17th 2020 (in which the
word “April” – contained in subparagraph 726 of Law 27/12/2019 N. 160 – has
been replaced by the word “November”).
of yesterday, June 15th 2020, the VAT due on Italian charters
must to be calculated on the basis of the actual time spent by the charter into
the EU territorial waters.
logical consequence of this, the taxable amount will be subject to a
pro-rata reduction based on the cruising outside the European territorial
waters (international waters), according to the real time miles spent at
“high sea” (international waters), in accordance to the hereinbefore
mentioned article 59.
The new rule does not apply to any Italian charters signed before 15th June 2020 (date of release of the official Provision by the Agenzia Delle Entrate).
What do we
need to do now on?
To put it
on board need to split the Charter time into two parts:
a.total hours spent into EU Waters
(Italy, France, Spain, etc.).
b.total hours spent at the High
Sea (International Waters).
and particularly important, the following evidences/proofs must be collected,
kept on file and submitted in case of inspections by the Authorities:
1. trip route cartography.
2. data/info extracted from satellite
and/or navigation systems.
3. data/info extracted from
transponder systems (e.g. AIS system).
4. logbook (ship’s log) and/or
5. papers attesting any berth stay in
non-EU ports (e.g. berth invoices, berth contracts agreements,
arrival/departure formalities, etc.).
6. papers attesting any purchase of goods
and/or services in non-EU shops/businesses.
7. the short-term Charter Agreement and/or analogue Contracts regarding the hire of the yacht.
evidences collected must prove the maritime routes sailed by the yacht with
extreme accuracy and coherence.
evidences/proofs collected must be kept on file for a period of time according
to Art. 57, paragraphs 1 and 2, of the
Presidential Decree N. 633/1972 (therefore, until 31st Dec. of the fifth year subsequent to
the year in which the Declaration has been filed or – in the event that the
Declaration hasn’t been filed – until the 31st Dec. of the seventh
year subsequent to the year in which the Declaration should have been filed).
the procedures and reduce the burden we – at Yacht Welfare – have set up a
special form for all our Clients to summarize all the necessary data and info.
This form is called PPNRF (Passage Plan & Navigation Report Form) and it is
made in editable pdf file.
needs to be fulfilled in all its parts and sent back to us along with the
necessary pictures, mini videoclips, logs, etc. annexed.
Welfare will keep assisting you by double checking the info provided.
Please find below a news about the VAT regime in Spain on supplies of goods to commercial yachts, released by our Spanish referent Mr. Alex Chumillas:
Most commercial yachts based in Spanish marinas are owned by European companies, which in many cases are registered for VAT purposes in their respective countries. It is very often that local Spanish suppliers and clients end up in a conflict situation over whether the goods supplied to these yachts should be subject to Spanish VAT or not. We will try to provide here an overview of the Spanish approach to this situation.
First of all, we must remind that the term “intra-Community supply” refers to goods supplied by a business in one EU Member State to a business located in another EU Member State where the goods have been transported from the territory of one Member State to another as the result of such supply.
A VAT-registered trader in one State may apply the zero rate to the supply of goods to a business customer in another Member State if:
a. the customer is registered for VAT in another Member State b. the customer’s VAT registration number is obtained and kept in the supplier’s records c. this number, together with the supplier’s VAT registration number, is stated on the sales invoice, and d. the goods are dispatched or transported to another Member State
So what is the Spanish approach on this matter and more specifically on supplies to commercial yachts?
Several recent rulings issued by the Spanish Directorate of Taxes determine the current trend and approach in Spain. Among these rulings, the following deserve special attention:
1. Binding ruling dated October 2015 which considered that the supply of spare parts to transport trucks owned by VAT registered business in other member states would be subject to Spanish VAT when the supply of such parts takes place in Spain. 2. Binding ruling dated February 2016 which considered that the supply of equipment to commercial yachts owned by VAT registered entities in other member states, when the supply of goods involves an installation or assembly of the equipment by the Spanish local supplier and such installation takes place in Spanish territory, the whole supply is subject to Spanish VAT.
In addition, a couple of court judgments are relevant to this matter:
3. Judgment STS 2978/2012 of the Spanish Supreme Court of Justice which consider that, in order to consider a supply of goods as an intra-community supply, the document declaring receipt of the goods by the acquirer must clearly state that the goods were actually delivered outside Spanish territory by means of a declaration or certification of the goods’ recipient. 4. Finally we consider that the ECJ Facet case is relevant, according to which intra-Community supply would imply that the associated intra-Community acquisition should be deemed to have been made in the Member State which issued the identification number. In other words the goods should have been actually delivered to the Member State where the customer is identified for VAT purposes.
The above resolutions determine the current jurisprudential trend in Spain. The intention to remove the goods from Spanish territory is not enough, but an effective shipping or exit of the goods from the Spanish territory at the time the supply takes place in Spain. Therefore, if this condition is not met instantaneously at the time the supply becomes effective, the whole supply should be subject to Spanish VAT.
For further information, please email our Spanish referent Mr. Alex Chumillas to firstname.lastname@example.org or send your inquiry to email@example.com. We are always pleased to assist you and remain at your disposal.
Please find below a detailed update for 2017 released by our Croatian partner:
Part of our business is keeping up with the ever changing maritime laws and regulations in the region. So with the possibility of some important changes to charter tax potentially being instated this year, we’ve been keen to inform everyone in the industry. We were going to wait until the changes took effect before sending out this update, but after hearing conflicting information from many other people in the industry outside of the country, we decided to send it out early. It covers the main VAT regulations and charter activities in Croatia that are set to change this year. Of course, we will continue to release pertinent information as we learn more from the relevant authorities. The following are the changes we have been informed of that should come into force for the upcoming 2017 season.
VAT and Charter Regulation Changes for 2017:
1. VAT will be charged to all commercial yachts that start charters (embark guests) in 3rd countries, proportionate to the time spent in Croatia. For instance, if a yacht embarks guests in Montenegro and comes to Croatia for 6 days, charter guests will need to pay Croatian VAT for 6 days. 2. All non-EU flagged commercial yachts will be allowed to perform charters in Croatia, but will be required to obtain a charter license. There is no longer a limit on the yacht’s length in order to perform charters in Croatia. The license will be valid for the calendar year. The number of licenses issued might be limited based on the Croatian market supply situation. Please note from the above info, ALL non-EU flagged commercial yachts will be able to start charters in Croatia if they obtain a charter license and have a charter and VAT representative! 3. Commercial yacht owners and owning companies are allowed to perform charters in Croatia, either through charter companies / ship agents or if they open their own charter company in Croatia. 4. Commercial yacht owners and owning companies from the EU are NOT obliged to have a VAT and fiscal representative in Croatia, while yacht owning companies from non-EU countries ARE obliged to have a VAT and fiscal representative in Croatia. 5. Private yachts will still be able to embark and disembark their guests in Croatia regardless of flag. In cases where the owner and family members are not onboard, the Captain will have to have an authorized list of people with: 1) names of guests and, 2) length of time that these guests will spend on the yacht. This list of people will have to be authorized by the Captain’s signature and the yacht’s stamp. 6. VAT for charter activities in Croatia is still 13% for weekly charters and 25% for daily charters.
As soon as the administration finalizes and publishes the relevant information under points 1 and 2 above, we will inform you immediately. Meanwhile, if you have any questions, please do not hesitate to contact us at any time
Advice: if you are coming to Croatia this season and plan on having a busy charter season, you should start preparing NOW.
Thank you for your time and attention. All the best and we look forward to hearing from you soon.
Please find hereby the info just released by our French partner: As you are aware, it has been EASYTAX policy since July 15, 2013, when the VAT became applicable to charter hire in France, to include any Delivery/Re-delivery fees charged to the charterer into the taxable base. This approach was based on Article 267 of the French Tax Code, which considers Delivery/Re-delivery fees as an ancillary service to the main service. Therefore this ancillary service should be treated the same way tax-wise. Over the years, there has been some confusion within the industry on this matter, with various positions taken. As a result, several of our partners have asked that we seek confirmation from the French Tax Administration on this particular point – which we did.
Some time ago, we had requested for a legal ruling from the French Tax Administration Rules and Regulations Division (“Département de Legislation Française”) to confirm the taxable regime to be applied to Delivery/Re-delivery fees. Recently, we received the ruling (Ref. D2B/1500014757D) that confirmed that such fees – regardless if they are just fuel &/or “a time package” – charged in order to put a vessel at the charterer’s disposal, EITHER before the charter from one port to another OR after the charter to reposition the vessel, are indeed constitutive of an ancillary service to the main service, and therefore are taxable under the same condition.
To quickly summarize: DELIVERY/REDELIVERY FEES ARE TAXABLE IN FRANCE
1. If the charter fees are taxed at 20% French VAT, the delivery/re-delivery fees are taxed at 20% 2. If the charter fees are taxed at 20% French VAT on 50% of the charter fees, the delivery/re-delivery fees are taxed at 20% French VAT on 50%.
The Convention on the High Seas (replaced by United Nations Convention on the Law of the Sea) defined “high seas” to mean “all parts of the sea that are not included in the territorial sea or in the internal waters of a State” and where “no State may validly purport to subject any part of them to its sovereignty“.
Consequently “high seas seagoing ship” means a ship other than those which navigate exclusively into the 12 nautical miles territorial waters, inland waters or in waters within, or closely adjacent to, sheltered waters or areas where port regulations apply.
Resolution No.2/E, released by Agenzia delle Entrate (Italian Tax Office) on 12th January 2017, gives a clear interpretation of “high seas” not only in relation to the technical nature of the ship but also to its fiscal aspects. In accordance to the provisions of said Resolution, a ship can be qualified as a “high seas seagoing ship” if she has performed more than 70% of the voyages sailing the “high seas” in the past calendar year.
If the ship effectively met this specific condition (voyages > 70%), she is qualified to benefit of the VAT exemption according to Article 8-bis, which meets the provisions of Article 148 points a), c) e d) of the EU Directive 112/2006/CE, stating that the VAT exemption regime can be applied to those commercial operations done by vessels “used for navigation on the high seas and carrying passenger for reward or used for commercial purposes (including the Charter activity), industrial or fishing activities”.
Official proofs and documents needs to be provided to attest that the ship really performed more than 70% of the voyages sailing the “high seas”.
Therefore Italy really seems about to follow in the footsteps of France with its law from 12th May 2015, better known to all as BOFiP (the French regulations governing VAT exemption).
For what is closely related to the Yachting and Charter industry, the hereinbefore mentioned commercial operations can be quickly summarized in the following points:
a. purchase of goods and provisions b. purchase of fuel and lube oil (bunkering) c. purchase of spare parts, machineries and equipment in general d. repair and maintenance works on board
Despite the Italian Tax Authorities have provided clear information they didn’t provide complete ones. In fact there’s still plenty of grey areas and perplexities such as the way to calculate the 70% (time or number of voyages?), which documents and proofs can be considered as “official”, etc.
The most involved Italian fiscal representatives are now working hard to collect all the necessary info which will be shared with you as soon as possible.
For any additional info please call or email us to firstname.lastname@example.org. We remain at your disposal.