New procedures for repair - maintenance and refit works on non-EU pleasure yachts carried out in Italy

New procedures for repair - maintenance and refit works on non-EU pleasure Yachts carried out in Italy

The Italian Marine Industry Association (Confindustria Nautica) has succeeded in obtaining new procedures for repair - maintenance and refit works on non-EU pleasure yachts carried out in Italy after fruitful discussions with the General Director of the Customs and Monopolies Agency.

Customs Circular no.20/2022 of 27 May 2022, establishes that:

• the VAT exemption in accordance with article 9 point 9 of the Italian Vat Code (DPR 633-1972), applies for all ordinary repair and maintenance works carried out on Pleasure Yacht under the Temporary Admission regime;

• up to 100% reduction of the bond guarantee of customs for refitting and modification works carried out under the Inward Processing Regime;

These novelties are introduced for the yachting sector only, pending, after an experimental phase, an extension to other industrial sectors.

THE MAIN NOVELTIES

TEMPORARY ADMISSION

A vessel registered in a foreign register outside the EU and owned by a person established outside the European Union can cruise and stay in Union waters under the Custom regime of “Temporary Admission“ in accordance with article 141 of the EU Reg. 2446/2015. The performance of repair and maintenance activities does not entail the obligation to provide a guarantee on customs debts, which is instead due when using the Inward Processing procedure.

Temporary Admission includes ordinary maintenance and repair work on the vessel, the onboard equipment and the tenders, provided that it does not change their structure or lead to an improvement in their performance or a considerable increase in their value. "By way of example, maintenance work on the hull, including the hulls and decks (i.e. treatments, painting, polishing and wrapping, carpentry); maintenance, repair and possible replacement of the vessel’s systems and apparatus, propulsion systems and engine room apparatus; maintenance and repair of interiors''.

The Owner of the Yacht requesting the maintenance activity under Temporary Admission must prove the moment of the vessel's entry into EU waters by submitting to the customs office Form 71-01 of the EU Regulation 2446/2015 to the Italian local Customs office where the Shipyard is located.

The shipyard must then note in its accounting records the information about the vessel, the dates of commencement and completion of work, any parts and pieces replaced.

VAT 

In relation to the VAT treatment of services for work carried out under the Temporary Admission regime, it is specified in the Circular that the repair and maintenance activities indicated above fall within the cases of non-taxability provided for in Article 9, first paragraph no. 9, of Presidential Decree no. 633/72.

Duration of the regime
It is also reiterated that, since the Temporary Admission regime is the responsibility of the shipowner, while the possible opening of an Inward Processing regime is the responsibility of the shipyard, the 18-month maximum duration of the former is suspended in the event of the opening of the latter for refitting works and until their conclusion.

INWARD PROCESSING

For operations that involve structural work and make substantial improvements to the unit, it is necessary to use the Inward Processing regime, by way of example for:
- complete refitting of the Yacht’s interior
- modifications to internal spaces 

- modification in the length of the hull or decks
- the complete replacement of engine equipment

There is a global authorisation for all operations, authorised with the CDMS (Customs Decision Management System), indicating the work to be carried out and any additional operators other than the shipyard holding the authorisation. In this way, the transfer of parts and pieces to third parties can take place without customs formalities. The authorisation may be modified.

Reduction in the amount of guarantees

In the presence of a CDMS authorisation, reductions of 30% or 50% of the guarantee amount for VAT, provided for by the rules, may be granted, whereas in the presence of an AEO authorised operator, the competent office may grant a guaranteed waiver of up to 100%.

Contact SOS yachting Italy for more information: info.italy@sosyachting.com

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DISCLAIMER | The information provided in this text is for general information purposes only and doesn’t replace the advice of a legal advisor or of a tax consultant.