As of April 1, charterers looking to start their yacht charters in Italy will have to pay 22% VAT on the cost of their charter.
Last month, Italy’s parliament published a report outlining changes to VAT on yacht charters that begin in Italian waters.
The new laws will scrap the “lump sum VAT criteria” that was formerly in place.
Previously, yachts larger than 24m were eligible for a reduction to their VAT- the standard 22% could be reduced to a mere 6.6%.
This will no longer be the case as of April 1, and the standard 22% will be applicable to all yacht charters starting in Italy and/ or those starting outside the EU territory and then entering Italian waters.
The new laws will apply regardless of the date that the charter contract was signed.
The Italian Inland Revenue is expected to issue a new method for the calculation of VAT before February 29.
It’s being reported that the EU Commission disagreed on the lump sum criteria applied in Italy, Malta, Cyprus and France. The same regulations are expected to be rolled out in France in the coming months.
140 countries around the world countries charge VAT on goods and services, which includes the cost of yacht charters. Almost all countries in the European Union enforce VAT. Every country enforces its own percentage on VAT on yacht charters but in light of new laws, there has been some uncertainty about VAT reductions on yacht charters in the Mediterranean.
YachtCharterFleet will be sure to keep you updated with more information as we get it.
Be sure to discuss the changes to VAT with your yacht charter broker.