New VAT Rules for Italian Charters Now in Effect

Following the European Commission’s announcement in 2019 on the new VAT Directive for charters, Italian authorities announced they would be charging a VAT rate of 22%, unless it is proven that the superyacht sailed outside of EU waters. On 15 June 2020, the Italian Tax Authority issued Provision n.234483 which clarifies how vessels can prove sailing outside of EU waters, however, the implementation of these rules was postponed until November 2020.

From November 1, 2020, the “lump sum VAT criteria” related to the length of the yachts (ex. 6.6% VAT for the charter of yachts over 24 meters) will be no longer applicable, and ordinary VAT rate of 22% will be due unless it will be proved the navigation outside EU waters.

On October 29, 2020, Agenzia delle Entrate issued Provision n. 341339/2020, which clarifies the means of proof necessary to prove the effective use of the vessel outside the EU waters, to enjoy the VAT exemption.

To get the full details on the VAT proof required under this new system, read the advice issued by PG Legal.

Disclaimer: The advice provided above should be confirmed with a local Italian yacht agent before making any travel plans or charter bookings. The PYA does not take any responsibility for any losses associated.