Tag Archives: yacht

25% YES OR NOT?

Sanremo, 14th April 2019

25% YES OR NOT?

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 voyages).

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

2. imported 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 above frame:

a. 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.

For any additional info or clarifications required please email us to info@yachtwelfare.it

You can download the complete version of this news below:

YW_News_19_12_04Scarica

“E-INVOICE” NOT REQUIRED

Owning 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.

Law 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.

Therefore Owning Companies do not have the obligation to issue electronic invoices (e-Invoice).

This 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).

Please 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).

A full explanation of the e-Invoicing in Italy can be consulted on the EU official website or visiting the following link: https://ec.europa.eu/cefdigital/wiki/display/CEFDIGITAL/eInvoicing+in+Italy.

For any questions or additional info please email us to info@yachtwelfare.it

Italy VAT Guide 2018

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 info@yachtwelfare.it.

YW VAT Guide Italy 2018

VAT News 2018

VAT EXEMPTION REGIME APPLICABLE TO VESSELS

On September 2017, the Italian Tax Authorities (Agenzia Delle Entrate) and the Association of Italian Shipbuilding Industry (“Unione Nazionale Cantieri e Industrie Nautiche”, “UCINA”), issued the general guidelines on tax and yachting matters (Guidelines), contained in the book “Nautica & Fisco (see also https://ucina.net/en/ucina-new-tax-rules-for-the-nautical-sector/)”. The Guidelines provide further explanations about VAT exemption for transactions related to vessels:

a. used for commercial purposes
b. used for navigation on the high seas (“navi adibite alla navigazione in alto mare”).

Primarily, on 12 January 2017, Agenzia Delle Entrate issued the Resolution 2/E providing certain clarifications on the definition of vessels used for navigation on the high seas for the purpose of the application of the exemption regime under Article 8-bis, letter a) and letter d) of the Presidential Decree No. 633/1972.
Specifically, the above mentioned Article 8-bis reproduces the content of Article 148, letter a), c) and d) of Directive 112/2006/EU, providing for an exemption of certain operations relating to “vessels used for navigation on the high seas and for carrying passengers for reward or used for the purpose of commercial, industrial or fishing activities”.
In this respect, taking into account the position expressed by the Court of Justice of European Union, the Agenzia Delle Entrate pointed out that:

1. In order to benefit of the exemption regime, the condition that the vessel shall be “used for navigation on the high seas” refers to vessels carrying passengers for reward, or used for the purpose of commercial, industrial or fishing activities, but it does not refer to vessels used for rescue or assistance at sea or to vessels engaged in inshore fishing (CJEU, Elmeka, joint proceedings C-181/04 e C-183/04).

2. For VAT purposes, “high seas” shall be intended as that part of the sea exceeding the maximum limit of 12 nautical miles from the base lines under International Law of the Sea (Article 3 of the Montego Bay Convention of 1982).

3. In order to assure that the exemption regime under Article 8-bis of Presidential Decree 633/1972 is applied, with limited reference to the cases provided by the law (i.e., only to vessels actually and for the predominant part navigating on the high seas), it not sufficient to exclusively take into account the length or tonnage of the vessel.

For the above reasons, the Agenzia Delle Entrate clarifies that “a vessel can be considered as used for navigation on the high seas if, with reference to the preceding year, she has effected, by more than 70%, voyages in the high seas (i.e., beyond the 12 nautical miles)” and “such condition shall be verified for each tax period based on official documentation”.

With specific regards to the adequate “official documentation” necessary to prove the prevalence of voyages carried at the high seas, the Resolution No. 6/E, released by the Italian Tax Authority (Agenzia delle Entrate) on 16th January 2018, provides the below list of documents that shall be considered as “official”:

i. the Log Book (also known as ship’s log or captain’s log), according to articles 169-173 and 174 of the Italian Navigation Code (Codice della Navigazione).
ii. The maps of voyages as well as the data extracted from the ship’s tracking or identification systems (for instance, with no limitation, the A.I.S., GPS, etc.).
iii. The charter contracts, invoices and relevant payments.

As of today, such documentation is absolutely necessary to prove the “high sea cruising condition”. If the Company owning the vessel is not able to provide the suppliers with all or any of the above listed official documents, a mere statement issued by the yacht Owner/Master (self-declaration) declaring the “high sea cruising status” of the vessel might suffice just if the Declarant (Owner, Captain, Master, Manager, or any other person in charge for this, clearly listing his connection with the vessel or position on board, etc.), clearly explains the reasons why it is not possible to provide the required documents.

DEFINITION OF “VOYAGE”

Pursuant to the Guidelines and according to the provisions contained into the Resolution No. 6/E dated 16th January 2018, “voyage” shall mean any cruise carried out between ports (Italian, EU and/or non-EU ports) where embarkation/disembarkation of goods and/or people take place or more generally where said ports are used by the vessel for the purposes of carrying its commercial activity. Within the same Resolution (6/E) the Italian Tax Authority clarified that for “voyage” shall be intended also any cruise starting from and coming to the same port (also known as “circular cruises” or “circular voyages”). If during a “circular voyage” (starting from and coming to the same Italian port) the 12 nautical miles at some point will be crossed by the vessel to sail the high seas, said voyage is qualified as an “international voyage” (voyage at the high seas). Further, any voyage entirely carried outside the Italian territorial waters (exempli gratia: any charter contract having both embarkation and disembarkation places in France) shall be considered as international voyages (voyage at the high seas) as well. If on the contrary a “circular voyage” will only take place within the 12 nm Italian territorial line, said voyage cannot be considered as an “international voyage”.

Lastly – still in respect of the calculation of the 70% of voyages – the Italian Tax Authority explained, with Resolution 6/E, that any displacement (moving from/to) of the vessel to one other port or shipyard for technical reasons (even if those reasons are connected to the vessel’s commercial activity) cannot be considered as a “voyage” and so cannot be included into the calculation of the 70% of voyages.

Moreover, the “high sea cruising condition” shall be verified each year. In case of a percentage of voyages greater than 70% during a calendar year, the VAT exemption pursuant to Article 8-bis applies to the following calendar year. In the event that the percentage above does not exceed 70% during the calendar year, it shall be no longer possible to enjoy the VAT exemption as from 1 January of the following year, except in the special cases listed hereinafter:

a. the vessel is under construction, or
b. the vessel has not yet carried out any voyage in the sea.

Only in these cases, it could be possible to apply the VAT exemption on the basis of a statement declaring the intention to use the vessel on the high seas. Therefore, in order to issue an invoice VAT exempted under Article 8-bis, the supplier shall require the owner or the person responsible for the yacht (for example, the master of the yacht) to provide a statement attesting: the declarant’s personal data, the legal status of the declarant in relation to the vessel and the period for which the statement is provided. However, in the following year, the declarant shall verify if “70% high sea voyages condition” is met and, in the event of a failure in reaching the 70% of voyages on high sea, he shall inform the supplier accordingly. On the contrary, if such condition is met, the declarant shall provide the supplier with the official documentation proving that voyages on high sea, as described above, have been carried out.

COMMERCIAL USE (THE CONDITION)

To enjoy the VAT exemption, in addition to the “high sea cruising condition”, another condition shall be met. Said condition is that the vessel must be used for commercial purposes. Therefore, any transaction related to vessel intended for sport or pleasure purposes shall be excluded from the VAT exemption.
Firstly, it has to be pointed out that, VAT exemption shall apply, in any case, to vessels registered in the International Register, since such registration implies that the registered vessels shall be used for commercial purposes only.
In addition, the Italian pleasure yacht code (“Codice della Nautica da Diporto”) provides a list of cases of commercial use of pleasure yacht, including, charter, leasing, professional teaching of navigation and activities carried out by diving centres using the vessel as basis for diving; for which, generally, the VAT exemption also applies.
However, to benefit of the VAT exemption, the commercial use of pleasure yachts shall be attested by a public register (Italian, International or foreign). Hence, as a general rule, the relevant foreign Harbor Authority or the relevant foreign shipping register shall indicate the use for business purposes of the vessel by inserting, for example, the wording “Commercial Yacht”/“Commercial Vessel/ Yacht in commercial use” in the relevant records. The VAT exemption, as above described, also applies to any advanced payment made during the construction of pleasure yachts, in accordance with the terms of the contract executed between the parties. When the VAT exemption is required for the purchase of a new pleasure yacht, the seller shall require a certificate of the Company Register attesting that that the buyer’s core business is a commercial activity in the maritime sector.
Finally, it has to be underlined that, the transfer of a vessel, registered or to be registered for non-commercial use (private use), to a natural person, shall not qualify for VAT exemption.
Moreover, to register a pleasure yacht as having commercial purposes when it is conversely used for personal purposes may imply significant sanctions. In fact, by law, pleasure yacht used for commercial purposes must be exclusively used for the activities for which they are officially registered. Nevertheless, the use of private pleasure yacht for occasional charter activities is allowed by law, but it never can be qualified as commercial use for VAT exemption purpose.

Part of the hereby provided info has been provided by ucina.net.
For any questions or additional info please email us to info@yachtwelfare.it

Download useful files and documents:

YW News “VAT” 2018 (pdf)
Resolution 6/E January 2018
Resolution 2/E Januery 2017

Italy Cancels VAT Rise

Sanremo, 21st December 2017

 

ITALY CANCELS 2018 VAT RISE: VAT STAYS THE SAME

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.

Any question can be sent to info@yachtwelfare.it.

Up to Date Rules in Croatia

After the VAT workshop conducted during MYBA 2017 by our staff and partners please find hereby a summary of the new rules about Croatia:

1. Charter business can be performed by NON EU and EU charter companies with commercially registered yachts

2. To set up a yacht for charter business in Croatia (approx. 10 – 14 days), a charter company needs:

a) To obtain VAT and PIN numbers with the Croatian tax office. The list of required papers that must be submitted depends on if the charter company is from the EU or outside the EU.

b) To list the yacht in “E-crew” ( a central online database ) of the Croatian Ministry of Maritime Affairs. The list of documents to submit depends on the GT and LOA of the yacht.

If all the papers are in order there will no longer be a need for a technical inspection of the yacht’s firefighting and safety equipment in Croatia before the beginning of its 1st charter.

3. All non-EU flagged commercial yachts 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.

4. VAT will be charged on all commercial yachts that start charters (embark guests) in 3rd countries, on a pro-rata basis, for 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 on those 6 days.

5. All charter contracts with an embarkation port outside of the EU, and a disembarkation port inCroatia, and which are signed before the 1st of May, will be exempt from VAT charges on a pro-rata basis for the time the yacht will spend in Croatia.

6. VAT for charter activities with overnight stay is 13%. Daily charters are 25%

7. All commercial yachts need to have proof of their VAT status in the EU when entering Croatia

8. When embarking guests outside the EU, all commercial yachts need to have a charter contract when entering Croatia; and when leaving Croatia they need to have an invoice of payment of Croatian VAT issued by its local VAT representative

9. When embarking guests in another EU country, all commercial yachts need to possess a charter contract when entering Croatia and a pro-forma invoice for VAT payment in that country issued by a fiscal representative in that country

10. When embarking guests outside the EU, EU charter companies can use their own VAT number for VAT payment in Croatia on a pro-rata basis

11. Non Eu commercial yachts who do not possess a cabotage license can cruise in Croatian territorial waters only between international ports, to and from shipyards, and only with crew on board

Some details are still being clarified by the Ministry regarding how certain points above will be processed and controlled, so get in touch with us if you plan to charter this year in Croatia.
Setting up a charter business in Croatia is a pretty simple, straightforward and quick process if you have a quality, professional representative.
For more info please download the below pdf file from our partner MYS and feel always free to contact us to info@yachtwelfare.it to get your dedicated estimate on costs.

VAT Guide by MYS Croatia

Monaco – Italy Tax Agreement

In early April 2017 an important taxation agreement between Monaco and Italy came into force and, as a direct result, Monaco now appears on the Italian ‘white list’ of tax compliant jurisdictions. The Agreement gives rise both to opportunities and challenges for those individuals who fall within its scope.
In March 2015, Monaco and Italy concluded the terms of the Agreement for the exchange of tax information between the two jurisdictions. However, it was not until earlier this month the Agreement completed the formal ratification process by the competent authorities in both Italy and Monaco.
With ratification the Italian authorities can request their Monaco counterparts to provide information on individuals who are Italian tax resident and who hold assets in the Principality. Furthermore, both states have the possibility for their respective tax authorities to conduct a tax audit in the counterpart state.
The Agreement also seeks to avoid the double taxation of income and also defines the concept of ‘tax residence’ in the two states.
The Agreement is an important change for those individuals who are tax residents in Italy and Monaco with economic interests in the other jurisdiction.
The Agreement should be seen in the context of the introduction of automatic exchange of information on financial accounts which came into effect on 1 April 2017 between Monaco and the European Union, including Italy. For more info please do not hesitate to contact us writing an email to info@yachtwelfare.it.

Withhold Tax 33% in France

Withholding tax on charter revenues: has this battle been definitively won? As you may have heard MYBA and ECPY members have recently been subjected to French tax inspections in their capacity as Stakeholders. In compliance with Article 182B of the French General Tax Code, French Fiscal Authorities wanted to apply a 33% withholding tax on charter funds held by Stakeholders based in France, in relation to the commercialactivity (charters) made into the French territory and territorial waters. The withholding would apply when charter funds were transferred to Owning Companies or Yacht Owners which did not have a permanent professional establishment (business) in France and were based in jurisdiction which did not have a double tax treaty with France.
MYBA and ECPY decided to seek the official position of the tax authorities at the ‘Direction de la Législation Fiscale (DLF) in Paris. They asserted that Stakeholders are only intermediaries of on charter revenues realised in France and not the debtors.
The first reply was unfavourable but MYBA and ECPY lodged an appeal for a second interpretation by the National College. The DLF has now replied favourably, indicating that “the Stakeholder is not liable to pay the withholding tax provided for under Article 182 B of the General Tax Code”.
This is of course a great success but this is only the first stage, as now MYBA and ECPY need to ensure that this national decision is implemented at local level for the ongoing cases.
But when the battle is won at local levels are the tax authorities going to accept defeat or are they going to try to find a new debtor?
There’s still plenty of grey areas around this … stay tuned, we will release up-to-date news as soon as possible.

For any additional info or questions needed please email us to info@yachtwelfare.it.
We are always at your disposal.

New French Social Security Laws

The French government has recently enacted a decree that states a new requirement for social security payments for all non-French seafarers (crew) based in France unless they are already paying for social security (national insurance) in another EU member state, or in any other national state that has an existing bilateral social security treaty with France.
This decree will come into force on 1st July 2017 and will apply to all seafarers resident or otherwise domiciled in France irrespective of whether their vessel (yacht) is private or commercially operated.

Please find links below to download an initial summary of the key points of the new French social security legislation, and two flow charts to help clarify the regulation. This information was prepared and released by Lesia Employment Services ICC Limited (Lesia) in conjunction with a major maritime law firm.

Lesia Summary on Social Charges
Employers’ social security obligations in Franceregarding crew members
Social security obligations of seafarers living in France and notworking on a French flagged vessel

Thanks to www.pya.org