LATEST NEWS ITALY- THE NEW ITALIAN VAT LAW ENTER IN FORCE TODAY
After a long wait, the Italian Tax Authority (AGENZIA DELLE ENTRATE) finally issued yesterday (June 15th) the provision to apply the new VAT Law on charters therefore from now on, regardless the date of signature of the contract, the VAT reduction scheme is no longer applicable and according to the EU Directive, 22% Italian VAT on charters will be due from now on according to the TIME spent in EU waters (therefore does not apply to contracts ended before June 16th).
22% Italian VAT will not be due on the time spent in International waters during the charter period therefore, in order to know the exact taxable base, the Captain/Owning company must provide the following official means of proofs at the end of the charter period, in paper or digital documentation, that must be kept on file for 6 years, proving the effective use of the yacht outside the Union waters:
• Travel cartography, data and information extracted from satellite navigation systems and/or transponder like for example AIS;
• Digital photos showing the position of the yacht during the charter period;
• The navigation log or logbook kept currently by the captain where all data and the facts related to the cruising during the charter period must be noted;
• Documentation proving the mooring of the yacht at ports outside the Union territory (invoices, contracts, fiscal receipts and proofs of payments);
• Documentation proving the purchase of goods and/or services to suppliers based outside the Union territory (invoices, contracts, fiscal receipts and proofs of payments);
• Copy of the charter contract;
The above said means of proofs must indicate with precision and consistency the cruising routes made by the yacht also in terms of time.
The new provision of the Tax Authority does not clarify exactly the calculation methodology, but on the basis of what is contained at paragraphs 4.1 “Prova del tempo di navigazione al di fuori dell’Unione europea” (Proof of cruising time outside the European Union territory), it should be considered that according to an objective interpretation, the calculation method is to be considered as follows:
Total number of hours sailing outside the EU territory
_____________________________________________
Total number of hours of the charter contract
Example:
7 days charter contract, charter fee Euro 100.000 with 8 hours of effective cruising of the yacht outside the Union territory on the whole charter period.
The calculation would be as follows:
8
_______ = 4,7%
168
The invoice for VAT on charter fee will be as follows:
Euro 4.700 NO VAT
Euro 95.300 + 22% IT VAT (taxable base)
In any case, we reserve the right to provide to our clients, additional clarification on the procedures to be applied if there will be further clarification from the Authorities.
Please contact our Italian office info.italy@sosyachting.com for further information.
