The scheduled 1% increase in the Italian VAT rate, taking it up to 22%, which is due to come into effect on July 1st 2013, could be postponed indefinitely.
Disagreements within the country’s delicate coalition government mean the increase could be postponed until October 2013 or beyond, which is good news for those planning a last minute Italian Riviera Yacht Charter vacation this year. The increase has already been passed into law, meaning it would need an amendment or a new piece of legislation to bypass this date.
Italy's deputy economy minister, Stefano Fassina says a “delay is inevitable”, mainly due to the demand for the increase to be abandoned altogether. A delay seems to be the most likely outcome of negotiations.
Alex Mazzoni, director of Italian fiscal consultancy SOS Yachting, believes the 1% increase will come into effect on 1st July, but he also believes it is a fairly insignificant increase to conceal a much bigger problem facing the Italian superyacht industry. “The difference between 21 and 22 (%) will not do anything to the Italian superyacht market", he commented. “The reality is that we are in deep trouble – the market up to 40 or 50m for charter just doesn’t exist anymore.”
Mazzoni states that yacht owners are choosing more and more to place their yachts on hard standings rather than pay the charges to keep them afloat. He believes that the axiomatic issue facing the Italian market is the monetary restrictions being placed on all but the richest high-net worth individuals. The top-end of the charter market is constantly being manipulated by last-minute charter bookings at low prices.
If the Right part of the coalition wins the government will be left with a €4 billion deficit that would need to be reclaimed from elsewhere to meet EU budget deficit conditions, suggesting an air of inevitability for tax increases in some regions.
We will see a lot of clients coming in from Eastern Europe and a lot of last minute offers but all of the Italian clients will disappear. EU charters will be (non-existent) - Alex Mazzoni, director of Italian fiscal consultancy SOS Yachting