Clarifications on APA – June 2016

Sanremo, 28th June 2016

On June 26th 2016 MYBA has been replied by the Italian Revenue Office to his request of Legal Advice (Consulenza Giuridica No. 954-20/2016) in regards to the right application of VAT on APA (Advance Provisioning Allowance). The reply provided by the Tax Office just proves 2 out of the 3 points already dealt by Yacht Welfare more than 2 years earlier with our Official Petitions No. 903-13/2014 and 903-14/2014 filed with the AdE (Italian Revenue Office) on 23rd January 2014, which we hereby quickly summarize:

1. The mere transfer of APA funds from Charterer to Owner and/or directly to the Captain of the yacht is not taxable as per Art. 2, paragraph-3, letter-a) of DPR 633/1972 (Presidential Decree) being a sum of money provided by the charterer to the yacht’s Owner or Captain.

2. The portion of APA funds used by the Captain on precise instructions of the charterer to the meet personal needs of the above charterer and its guests (for instance, the purchase of food, drinks and transportation) are not subject to VAT as long as adequately recorded in the name of the charterer.

Although we are very proud to understand that the Legal Advice (Consulenza Giuridica No. 954-20/2016) confirms our guidelines provided since 2014, on the other hand we are considerably skeptical of the reply provided by the Italian Revenue Office in regards to point No.3 below, which substantially states that:

3. The portion of APA funds used by the Captain to meet navigation requirements, such as funds for fuel and oil for the engine and on-board systems, are subject to VAT since those amounts are an integral and variable portion of the consideration due for the charter of the yacht and subject to VAT at the same VAT rate as the charter.

In fact it is hard to understand how the Italian Revenue Office could have provided two different interpretations of VAT application to the same notion, in the case in point even providing a subjective distinction between the nature of the supplies(personal needs vs. navigation requirements) , especially considering that no distinction was made in their reply to our Official Petition No. 903-13/2014, in which they unequivocally inform that no VAT is due either on food/drinks and fuel supplies.

Yacht Welfare, for the sake of clarity and to protect his Clients, will start to adopt in full the new ruling by MYBA and will prepare a new request of Legal Advice to examine and understand the inconsistency of the reply provided under point 3.

 

For any additional info please always feel free to inquire at info@yachtwelfare.it.

Download the full notice here YW_News_02_2016

Reduction of Taxes for Berth in Italy from 22% to 10% only

The Italian government’s Gazzetta Ufficiale, which lists newly enacted laws, published no. 300 ‘legge di Stabilità’ on 30 December 2014. Article 1 clause 237 stated that temporary berthing and mooring in Italian waters would now incur a duty of 10 per cent, as opposed to the 22 per cent rate that had been castigated by the Italian yachting industry for its detrimental effect on business. This however, will not apply to permanent berth purchases. For more info please see also http://www.ucina.net/en/component/k2/item/304-il-senato-ha-convertito-con-la-fiducia-il-decreto-legge-sblocca-italia.

No taxation on fuel in Italy

The below advice given on 31th July by the BBD Studio in Italy, expert in taxation law and providing legal and fiscal custody of major Italian firms, strengthen our aversion to the circular note raised by the Customs Office and confirm the possibility for non-EU flagged commercial vessels to take duty free fuel in Italy. For more info please fully read the below doc. from BBD. Any additonal question can be forwarded by email to info@yachtwelfare.it and you will be replied within 24 hours time.

Download here the DOWNLOAD_BBD_Advice

For any additional info please call or email us at info@yachtwelfare.it.

Duty free fuel still available in Italy

The rumors spread in the last days by the operators in the yachting industry about the taxations in Italy on the fuel taken for a charter are just hot air.
We have been officially noticed that the Circular No.10/D Reference Number RU 67167, raised by the Italian Customs Office (Agenzia delle Dogane) on 14 July 2014, goes in direct conflict with the EU laws and rules for what is concerned to the operations of import/export and purchases between EU/EU and EU/non-EU nations.
Many of the local Customs Offices (e.g. Viareggio, Sanremo, etc.) are already not adopting this rule.
In all cases, if for any reason the new rule will find application into the Italian law, the yacht importation (in total exemption of VAT) will be the most valid solution which will put all non-EU ship’s owner companies in the position to get duty free fuel in Italy.
In fact, in accordance to Art. 68 from DPR No. 633/72 and on the base of the Official Questioning 95/E from 14 March 2008, which clearly states that: “Pertanto, l’acquisto o l’importazione di navi da diporto dotate delle caratteristiche di cui sopra può avvenire in regime di non imponibilità, ai sensi del già citato art. 8-bis, a condizione, ovviamente che le medesime siano effettivamente utilizzate dal soggetto acquirente in attività di noleggio come previsto dalla normativa in materia (…) “ it is limpid that the importation practice is not subject to taxation. This means that if any non-EU ship’s owner company needs to import its yacht in Italy no VAT will apply on the yacht’s declared value.

 

For any additional info please call or email us at info@yachtwelfare.it.

No taxes on fuel, food&drink provisioning, deck supplies and repair works

with specific regards to the yacht’s provisions (fuel,  lube oil, food, drinks, spare parts, deck supplies, etc.) and maintenance works on board, for and during a charter subject to the Italians laws and rules, we hereby inform you that from 22nd April 2014, as per our Official Petition 903-13/2014-Art.11, law 27th July 2000, No. 212, filed with the Agenzia Delle Entrate (Italian Revenue Office) on 23rd January 2014, it became official that PROVISIONING is not taxable as per Art. 8-bis, paragraph-1, letter-d) of DPR 633/1972 (Presidential Decree). All the suppliers must head the invoices for PROVISIONING tax free under the ship’s owner company’s name with the Italian VAT code collected by the Fiscal Representative. After, therefore, the charterer is allowed to use APA to refund the ship’s owner company for the PROVISIONING costs. Please send an email to info@yachtwelfare.it for more detailed info.

No more taxes on APA !!!

Be informed that starting from April 2014, as per our Official Petition 903-13/2014-Art.11, law 27th July 2000, No. 212, filed with the Agenzia Delle Entrate (Italian Revenue Office) on 23rd January 2014, it became official that APA is not taxable as per Art. 2, paragraph-3, letter-a) of DPR 633/1972 (Presidential Decree) being a sum of money, given by the charterer to the yacht’s captain, to refund the ship’s owner company for the running expenses during a charter subject to the Italian laws and rules. At the end of the charter a detailed APA report is mandatory to raise the APA invoice under Art.15 No.3 paragraph-1 in favor of the charterer for his own purposes. This invoice is not subject to VAT and can be issued by the Fiscal Representative on behalf of the ship’s owner company. Please send an email to info@yachtwelfare.it for more accurate info.

New Laws and Regulations for Charter and VAT in Croatia for upcoming season

1. Commercial yachts with EU and Croatian flags will be allowed to perform charter in Croatia, but only through charter companies or registered ship agents. Before coming to Croatia, however, a specific procedure will be required. For more details please email us to info@yachtwelfare.it.

2. Regarding commercial yachts with non EU flags, only those over 40mt in length will be allowed to perform charters in Croatia, but will be required to obtain a charter license. The cost of charter licenses will be approx. 300/400euros. The procedure of issuing the license might take up to several months. The license will be valid for 1 year. Also, the number of licenses issued will be limited and issued on a “first come, first serve” basis. So far for 2014, the total number of licenses stands at approx. 300.
Please note that based on the above info commercial yachts under 40m in length with a non-EU flag will NOT be able to start charters any longer in Croatia. Those yachts will be allowed only to disembark their guests in Croatia. Yachts with non EU flag over 40m in length will be able to embark guests in Croatia only if they obtain a charter license!

3. Private yachts will 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 yacht’s stamp.

4. At this point VAT for charter activities in Croatia is 13%, but we are still waiting from the Croatian Tax Revenue Office for all the complete info regarding total VAT % and procedures as well as on how tax collection will be performed.

VAT Rate at 6.6%

According to Article 11(1) of the Law Decree No. 76/2013 from 28th June (published in the Official Gazette No. 150), the planned one percentage point increase in the main rate of VAT (value-added tax) from 21% to 22% has become effective on 1st October 2013 (more info here).
Despite of this all EU/non-EU fiscal represented subjects with commercially registered charter yachts won’t be much affected by the increase as the VAT rate is still at a very reasonable level (new rate 6.6% only, in any case lower than in France where VAT rate is at 9.8%) and this should encourage anybody to pick-up charters in Italy!
See here the new up-to-date VAT Application Table here

Some examples of VAT application

Some examples of VAT application:


1. Motor Yacht (M/Y) with a length of 65 meters. Charter Fees: 200.000,00 euros.
VAT to be paid in Italy = 13.200,00 euros (VAT at 6.6% rate = 22% on 30% of Charter Fees)

2. Sailing Yacht (S/Y) with a length of 40 meters. Charter Fees: 120.000,00 euros.
VAT to be paid in Italy = 7.920,00 euros (VAT at 6.6% rate = 22% on 30% of Charter Fees)

3. Motor Yacht (M/Y) with a length of 23 meters. Charter Fees: 40.000,00 euros.
VAT to be paid in Italy = 3.520,00 euros (VAT at 8.8% rate = 22% on 40% of Charter Fees)

General Principles

General Principles: here some indications on how VAT is to be applied for EU charters:
– Charter starts and finishes in Italy and remains within 12 miles of the Italian Coast, VAT at the full rate of 22% will apply.
– Charter starts and finishes in Italy but, at some point, cruises 12 miles offshore into non-Italian Territorial Waters, VAT at a reduced rate of 6.6% will apply.
– Charter starts in another EU state before entering Italian waters, it is the VAT applicable in that state that will apply.
– Charter starts outside the EU (e.g. Montenegro, Turkey) and then enters Italian Waters, then VAT at the reduced rate of 6.6% will apply only to the portion of the charter taking place in Italy, providing it is demonstrable.
– Charter starts in an Italian port but then cruises to a non-EU state, VAT at the reduced rate of 6.6% will only apply to the portion of the charter taking place in Italian Waters.