The European Union Commission has open infringement proceedings on certain Italian rules related to the Yachting sector and in particular on:
i) the application of reduced VAT rate based on the percentages of presumable use of the pleasure yacht outside territorial waters (Circular AdE 49/2002) during the charter. On this point it will be essential to analyze the text of the letter of infringement to understand whether the relief concerns only short-term charter (lasting up to 90 days) or even long-term charters which include nautical leasing;
ii) excise duty exemption on fuels used for bunkering by yachts used in charter activities. The issue had already been analyzed by the Tax Authority in July 2016 regarding the VAT profiles recharged to the Charterer in the so-called APA procedure; today the Commission points to the exemption from excise duty, whose benefits under current legislation are in fact transferred from the owning company to the charterer.
The present Communication does not intend to alarm operators considering that Italy will have two months to respond to the Commission’s arguments and taking into account that national associations such as UCINA have already promptly started a conversation with Italian national authorities. An official press release published on the European Commission website:Paradise Papers: Commission follows up on illegal tax breaks for yachts and aircraft.