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Italy: recap of new rules on VAT on international voyages
Changes apply to contracts executed after June 15, 2020
Both France and Italy had been requested by the EU to amend rules which allowed for lumpsum reductions on voyages outside the EU.

Last Monday the Italian Tax Agency published the measures that will be implemented in Italy this summer.
  • The lump sum reduction on fees for charters outside EU waters has been abolished as of June 15.
  • The new rules came into force on June 16, 2020 and apply to all contracts executed on or after that date.
  • Charter contracts fully executed (and include the signatures of all stakeholders) before June 16, 2020 will continue to be regulated by the former rules, i.e. the application of a lump sum reduction on the charter fees subject to VAT if the contract includes an international voyage.
- Poof the contract was executed prior to June 16 must be provided on request. Accordingly, the bank transfer of (at  least) the first installment charter funds clearly showing the date of transfer should be attached to the contract. 
  • Under the new rules, 22% of VAT will be charged on navigation in European waters while VAT will not be charged on fees relating to the time (not the mileage) spent outside European waters.
  • Navigation in international waters must be corroborated by AIS data.
- Yachts which are not equipped with AIS must provide: 
  • Executed contract
  • Log book
  • GPS digital photos (bi-weekly)
  • Invoices for berthing and services during navigation
While France had planned to apply similar rules from March 30, 2020, implementation of the regulations was suspended following the global health crisis. While we anticipate the regulations will eventually come into force, France for now had opted to protect the charter industry given the unprecedented economic circumstances.
 
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