Italy: New VAT rules for ocean-going vessels, pleasure boats

Ship owners or operators will not be able to buy or lease VAT-free vessels, unless they submit a zero-rating application.

Ship owners or operators will not be able to buy or lease VAT-free vessels.

There are changes to the value added tax (VAT) treatment of ocean-going vessels and related components services. Ship owners or operators will not be able to buy or lease VAT-free vessels, unless they submit a zero-rating application to the Italian tax authorities.

The director of the Italian tax authorities issued an implementing Decree no. 0151377 (15 June 2021) that sets out that a form must be used to declare:

  • That more than 70% of the distance sailed has been on the high seas (with an attestation required in order to benefit from the zero-rated purchase of the vessel or related services)
  • The percentage of use of pleasure boats in the territory of the EU under business-to-consumer (B2C) long-term chartering or leasing contracts (the form can be used to declare the estimated use or the actual use)

The form is to be used for supplies made from the 60th day after its publication (i.e. from 14 August 2021). The form, however, can be used beginning 15 July 2021.

The form must be filed electronically, and a specific attestation is needed for each B2C long-term chartering or leasing contract and for each vessel.

The supplier must include, in its invoice, the reference number assigned by the tax authorities to the attestation previously filed by its customer. Without this number, the supplier will have to charge VAT. A supplier that issues a zero-rated invoice for a vessel used on the high seas without the attestation by the customer or without verifying that an attestation has been filed, will incur a penalty ranging from 100% to 200% of the amount of VAT.

Read a June 2021 report [PDF 234 KB] prepared by the KPMG member firm in Italy


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