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50 shades of VAT


June 2017

Do I have to qualify for the FCE and/or the ICE to perform charter activity in Italy and France?

Understanding the options

It is not mandatory to qualify for the FCE and/or the ICE to charter either in France or in Italy. You can continue charter activities but without any VAT or excise duty exemptions on the purchase of supplies and services in France or Italy (see “What happens if I don’t meet the 70% rule?”).
Depending where you intend to purchase the bulk of supplies and services (including fuel, refit work, etc.) you can choose to comply with either the FCE or the ICE to ensure you are VAT exempt in either France or Italy. It is not mandatory to comply with both relief schemes if you do not plan to purchase VAT exempt supplies and services in both countries.

However, with regards to importation, if not compliant with the FCE requirements, the yacht can no longer benefit from the customs relief scheme (FCE) in France. It may be re-imported and released into free circulation in the EU (including France) under an alternative customs relief scheme in another EU Member State. Typically, importation will entail movements of cash flows.