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Summer 2020: new VAT rules postponed in Italy
New rules apply as of November 1
Both France and Italy had been requested by the EU to amend rules which allowed for lump sum reductions on voyages outside the EU. Italy has now aligned itself with France with regards to the application of VAT on charters.
The Italian Official Gazette of July 16 contained the surprise announcement that the date of implementation - June 16, 2020 - has been replaced by November 1, 2020.
France had planned to apply similar rules from March 30, 2020, however the implementation was suspended following the global health crisis. While we anticipate the regulations will eventually come into force, no date has been announced yet.
Italy has now followed suit. This means that all charters starting in Italy during the summer may operate under the outgoing VAT scheme. The provisions apply to all charter contracts irrespective of when the agreement was signed and the charter performed - as long as both were before November 1, 2020.
As of November 1, all the changes that had been anticipated for June 2020, will come into effect in Italy. Key changes are:
  • The lump sum reduction on fees for charters outside EU waters has been abolished as of October 31, 2020.
  • The new rules came into force on November 1, 2020 and apply to all contracts executed on or after that date.
  • Charter contracts which are fully executed (and include the signatures of all stakeholders) before November 1 ,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 November 1, 2020 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. VAT is not due on the fees related to the time spent (not the mileage covered) 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
Feel free to contact us for more information on how to handle past and future charter admin at info@HV-Yachting.com