Italy Introduces Changes to Vat on Yacht Charters Starting from April 1 2020 :
From April 1, Charterers looking to start their yacht charters in Italy will have to pay 22% VAT on the cost of their charter. Italy’s parliament published a report outlining changes to VAT on yacht charters that begin in Italian waters. It’s being reported that the EU Commission disagreed on the lump sum criteria applied in Italy, Malta, Cyprus and France. The new laws will scrap the “lump sum VAT criteria” that was formerly in place. Until now, yachts larger than 24m were eligible for a reduction to their VAT- the standard 22% could be reduced to a mere 6.6%. Every country enforces its own percentage on VAT on yacht charters but in light of new laws, there has been some uncertainty about VAT reductions on yacht charters in the Mediterranean and Italy still didn´t define how it will apply and calculate the new VAT rate on its own waters.
How Does Brexit Affects the Yachting Industry? What Sould Be Considerer Now?
With Brexit, yacht owners need to have contingency plans in place to cope with the potential outcomes of Brexit.
Whether it’s a deal or no-deal, we recommend that yacht owners prepare for every eventuality – especially if the yacht is owned via a UK corporate body and/or registered under the UK flag, but, moreover, if you imported the yacht or paid VAT in the UK.
The key points for yacht owners to consider are the following:
- Decide where they plan to use the yacht (within or outside the EU); and
- How they plan to use the yacht (private or
commercial) within the EU.
These considerations will affect the yachting structure and determine if changes are needed to put in motion. A thorough assessment is strongly recommended before making any decisions. In the event of EU-resident yacht owners planning to be based in the EU, an EU option would be most achievable; whereas a UK structure and UK flag remain a valid option for UK residents or yachts that will be located predominately outside of the EU.