The Italian authorities have confirmed that all charter contracts signed before 1 November 2020 will be charged at the previous VAT (value added tax) rate of 6.6%, rather than the soon-to-be-implemented rate of 22%- meaning you can now book a yacht charter in Italy for next year and benefit from a saving under the old scheme.
After a complicated few months, some new clarity has been shed on the situation regarding yacht charter and tax reductions in Italy.
A new scheme to calculate VAT (Value Added Tax) reductions is being implemented- but it won’t take effect until November 1.
However, any charters booked before November 1 will be eligible to operate under the previous, lump-sum scheme regardless of the date of the charter itself- meaning you can charter in Italy next year and still enjoy the benefits of the ‘old’ scheme if you book now.
This move has been made in a bid to recover a dented tourism season this summer as a result of COVID-19.
The ‘old’ scheme operates under 'lump-sump reductions', which stands at 6.6% for yachts measuring over 24m.
The new VAT laws were initially scheduled to come into effect at the start of the summer cruising season. Italian authorities pushed back the new regulations in a bid to recover its tourism season after bearing the brunt of COVID-19 during the start of summer.
The new scheme, which comes into force this November, is based on time spent in non-EU waters (also known as international waters, and is generally considered to be around 12 nautical miles from any coast).
Under these regulations, VAT reductions will be proven by travel cartography and AIS tracking data and 22% will be applied on the portion of charter performed within Italian and EU territorial waters only.
Any charters booked before November 1 will be eligible to operate under the lump-sum scheme regardless of the date of the charter itself.
This new scheme was first introduced December 2019, when the European authorities announced major reforms for VAT reductions on Mediterranean yacht charters. The aim was to eliminate the practice of charter yachts briefly cruising into international waters in order to benefit from a VAT reduction- a practice sometimes referred to as ‘touch and go’.
France has also been undergoing changes to its VAT regulations on yacht charters.
It’s never too early to book, particularly in the busy Mediterranean; and Italy is expected to be one of the most in-demand spots for a crewed yacht charter in 2021.
With more coastline than any other country in Western Europe, Italy has plenty of places to explore, as well as incredible diversity that makes it well-suited to all different kinds of vacation.
For those in search of paradise, consider the golden sand beaches, crescent-shaped coves and clear, aquamarine blue seas of Sardinia. As well as its natural beauty, the island is also well-known for its chic beach clubs and lively restaurant scene, which come together to create a five-star superyacht charter experience.
Italy has plenty of places to explore, as well as incredible diversity that makes it well-suited to all different kinds of vacation.
On the mainland, the Amafi Coast will charm all types of charterers with its mountain-covered landscapes and pastel-coloured towns stacked up on the cliffs. A destination steeped in culture and history, an itinerary along this beguiling stretch of coast will mix many elements to ensure an unforgettable vacation and memories to last a lifetime.
Elsewhere, the Italian character of Portofino and the Greek-influenced island of Sicily promise discovery and exploration as well as relaxation and recreation. From the incredible artistic heritage seen in chapels and statues to the country’s beloved cuisine, Italy has so much to offer guests on a yacht charter.
Travel restrictions as a result of COVID-19 might have dented your summer plans this year; but the yachting industry is looking ahead to a brighter and bubblier 2021.
If you’re interested in making a booking or if you’d like to find out more about VAT and tax, please get in touch with your chosen yacht charter broker.