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: 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.
It’s an excellent news! There is finally clarity about the VAT in Italy and commercially registered charter yachts will actually benefit from it !
By appointing a fiscal representative commercial yachts can now discharge all VAT on purchases made in Italy, like fuel, provisioning, spare-parts, repairs, etc.
The VAT rate is at a very reasonable level and that should encourage all charterers ”