Revenue on Board Archivi - Barche Magazine ISP https://www.barchemagazine.com/en/revenue-on-board-en/ Rivista di informazione sulla nautica da diporto. Novità, prove, esclusive su barche e yacht a vela e a motore Thu, 14 May 2026 11:38:46 +0000 en-GB hourly 1 https://wordpress.org/?v=7.0 https://www.barchemagazine.com/wp-content/uploads/2021/04/cropped-Senza-titolo-1-32x32.png Revenue on Board Archivi - Barche Magazine ISP https://www.barchemagazine.com/en/revenue-on-board-en/ 32 32 Taxation of crew members https://www.barchemagazine.com/en/taxation-of-crew-members-laws/ Wed, 13 May 2026 12:42:45 +0000 https://www.barchemagazine.com/?p=258285 With summer approaching and the yachting season in full swing, discussions on issues affecting the yachting world are once again […]

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With summer approaching and the yachting season in full swing, discussions on issues affecting the yachting world are once again highly topical, and among these, the taxation regime for crew members is always a hot topic

by Berardo Lanci*

     We are now preparing for the upcoming season, enriched by an important clarification from the Revenue Agency, which, in its ruling no. 10 of 20 January 2026, returned to the issue of exempt income for crew members.

     We have already commented on this tax regime and therefore consider it appropriate to return to the subject, emphasising the importance of the Revenue Agency’s clarification. On this point, it should be noted that crew members who are tax residents in Italy and employed on yachts flying a foreign flag are exempt from Italian income tax on their income. In particular, income derived from work performed for a period exceeding 183 days within twelve months is excluded from the tax base.

The remuneration received by crew members on board yachts flying a foreign flag is not considered taxable income in Italy if the conditions outlined in the article are satisfied. Consequently, there are no formal obligations for the taxpayers involved, although it is advisable to retain all documentation necessary to demonstrate that the requirements for applying the favourable regime are met.

Imperial ©Guillaume Plisson.

     This provision, contained in Article 5 of Law No. 88/2001, responds to the need to guarantee crew members – who are excluded from the so-called conventional remuneration regime – more favourable taxation on income from work carried out abroad. In this regard, the Revenue Agency has already clarified that the favourable regime mentioned above applies regardless of where the work is performed. In other words, it is irrelevant whether the yacht sails mainly in international, EU, or Italian waters, or whether it is based in an Italian or foreign port.

In its Ruling no. 10/2026, the Italian Revenue Agency confirmed that the principle which considers holiday periods, public holidays, weekly rest days, and other non-working days when calculating the 183 days also applies to crew members.

      Moreover, in its recent Ruling No. 10/2026, referring to a principle already clarified previously (see Ruling No. 134/2020), the Revenue Agency recalled that the provision applies provided that the time requirement of “a period exceeding 183 days within twelve months” is met and confirmed that, as the rule refers to twelve months and not to the calendar year or tax period, the condition must be considered met even when the 183 days are calculated across the year, as they do not necessarily have to be 183 days falling within the same calendar year. However, the part of the aforementioned Ruling No. 10/2026 in which reference is made to paragraph No. 1.5.7 of Circular No. 207/E of 2000 is of great importance. Among other things, it states that “For the effective calculation of the days spent by the worker abroad, in any case, the period of holidays, public holidays, weekly rest days and other non-working days are taken into account in the calculation of the 183 days, regardless of where they are spent”.

The preferential scheme applies regardless of where the work is conducted. It does not matter if the yacht primarily sails in international, EU, or Italian waters.

In the opinion of the author, the above reference should be considered as an endorsement by the Revenue Agency of the application of this principle to the provision in question, even though in the specific case analysed by the Revenue Agency, the taxpayer who made the request was considered excluded from the application of the favourable regime. This conclusion is particularly relevant given that there have been several tax disputes over time, in which case law has consistently held that the principle according to which holidays, public holidays, weekly rest days and other non-working days are taken into account in the calculation of the 183 days, regardless of where they are spent. It is therefore hoped that the ongoing tax disputes concerning the issue discussed here will be settled once the Revenue Agency recognises the correctness of the principle applied by crew members, which the relevant case law has already upheld.

(Taxation of crew members – Barchemagazine.com – Excerpted from Barche, May 2026)

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]]> VAT on trade-ins https://www.barchemagazine.com/en/vat-on-trade-ins-budget-law-yachting/ Wed, 08 Apr 2026 13:06:55 +0000 https://www.barchemagazine.com/?p=255159 The 2026 Budget Law amended the VAT code: in the case of barter transactions, the taxable amount is determined by […]

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The 2026 Budget Law amended the VAT code: in the case of barter transactions, the taxable amount is determined by the value of the goods and services involved in each transaction

by Berardo Lanci

The 2026 Budget Law amended the VAT regime applicable to trade-ins of goods and services.

     Specifically, to resolve a conflict between national legislation and Article 80 of the VAT Directive, it was necessary to amend Article 13 of the VAT Code under Presidential Decree No. 633/1972. This provision, for invoicing a good or service exchanged, used the normal value of the goods or services in exchange as the taxable base for VAT. In fact, the aforementioned Article 80 does not include trade-ins among the exhaustively listed cases where VAT is calculated on a taxable amount based on the normal value.

Given the importance of the matter – including, but not limited to, the penalties for tax infringements – it would be helpful if the Revenue Agency provided clarification on what is meant by costs relating to the boat traded in, for the purposes of determining the tax base.

     For this reason, the 2026 Budget Law amended letter d) of paragraph 2 of Article 13 of the VAT Code, which in its new version provides that in cases of trade-in, the taxable base is represented by the value of the goods and services that are the subject of each trade-in, “determined by the total amount of all costs relating to such supplies or services”.

     Regarding this matter, it should also be briefly noted that, under Article 11 of the aforementioned VAT Code, trade-ins are regarded as the supply of goods and services in exchange for other supplies of goods or services and are subject to VAT independently of those they are exchanged for.

The entity that trades in its boat is required to track all costs incurred in relation to its trade-in yacht in order to determine the VAT taxable base.

    The legislative amendment is clearly also of great importance in the sale and purchase of yachts, where it is well known that the purchase of a new boat often involves the trade-in of another, usually of lesser value. As is well known, in trade-in transactions between two VAT-registered parties in so-called B2B transactions, each party is required to issue an invoice for the sale it has made, and the party selling its boat in exchange for full or partial coverage of the price to be paid uses an invoice with a taxable amount equal to the normal value of its boat.

     As the relevant legislation has changed, the same party must determine the taxable amount to be indicated on the invoice on the basis of the total amount of the costs incurred by them for that boat, meaning not only the amount paid for the original purchase of the boat but also the costs relating to the purchase of other related goods and services, such as maintenance or other work on the boat. Moreover, in light of EU principles on the application of VAT (case C-207/23), this taxable amount should also include the cost components that are not relevant for VAT purposes, such as financial charges incurred for any loan taken out to purchase the boat.

The 2026 Budget Law amends the VAT regime for trade-ins of goods and services, notably affecting the sale and purchase of yachts.

     As a result of this new regulation, every VAT-registered entity that trades in a boat is required to recalculate its total cost, including all related expenses. This requirement will likely mean that the parties involved will have to adopt a specific accounting system that tracks all costs related to the boat, rather than, as is usually the case, only the directly attributable ancillary costs, which are added to the asset’s book value.

     The new legislation obviously also applies to trade-ins between a VAT-registered entity and a private individual, in so-called B2C transactions. In this case, obviously, only the sale made by the VAT-registered entity will be subject to VAT, with the effects mentioned above, and not the sale made by the private individual

(VAT on trade-ins – Barchemagazine.com – Excerpted from Barche, April 2026)

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]]> New rules https://www.barchemagazine.com/en/new-rules-yachting-budget-law/ Thu, 19 Mar 2026 13:55:51 +0000 https://www.barchemagazine.com/?p=252183 The Budget Law for the year 2026 introduced new rules on withholding taxes that also affect the yachting sector by […]

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The Budget Law for the year 2026 introduced new rules on withholding taxes that also affect the yachting sector

by Berardo Lanci*

The Budget Law for 2026 contains two provisions introducing the obligation to withhold tax at source in situations that also affect the yachting sector. Specifically, these provisions require withholding tax to be applied to payments of commissions to maritime brokers and to fees derived from the provision of services and the sale of goods carried out in the course of commercial activities.

In relation to the first case, it should be noted that the Budget Law, by amending Article 25-bis of Presidential Decree No. 600/1973, has eliminated from the cases of exemption from withholding tax, among other things, commissions received by agents, brokers and maritime and air brokers, with the consequent effect that, upon payment of such commissions, it is mandatory to withhold tax at source. The obligation obviously applies in cases where the client is a business or a professional, excluding cases where the customer acts outside the scope of business, art or profession. However, it should be noted that the regulatory change also applies automatically in cases where the parties have contractually agreed on the exact amount to be paid, without regard to the obligation to withhold tax.

The withholding tax, equal to the personal income tax rate applicable to the first income bracket (currently 23%), is applied on the taxable base equal to (i) 20% of commissions, if the service provider continuously engages employees or third parties (therefore 4.6%) or (ii) 50% of commissions, if the service provider does not continuously make use of employees or third parties (therefore 11.5%). To this end, the supplier must provide the customer with a specific declaration stating that they have used employees or third parties.

Companies and operators in the yachting industry must assess whether the new withholding tax obligations apply to transactions carried out or services received by them and, if necessary, adapt their invoicing systems or internal procedures for withholding and paying withholding tax.

The new provision applies to commissions paid from 1 March 2026 onwards and, in line with previously expressed principles by the tax authorities, it can be assumed to also apply to commissions accrued before the date mentioned and paid subsequently. A further point of interest concerns the case where commissions, due to regulatory provisions or contractual agreements, are withheld from the amounts collected directly by the supplier. In this case, the supplier is required to remit the amount withheld to the customers so they can make the relevant payment and fulfil any additional tax obligations.

The obligation to withhold tax on payments made to non-residents deserves specific consideration, although in the cases discussed in this article, withholding tax should only apply in cases involving Italian permanent establishments, as there is no connection with income generated in Italy.

Of particular interest to the yachting sector is the consideration that the customer, resident in Italy, pays commissions to a non-resident supplier. In this regard, paragraph 8 of the aforementioned Article 25-bis establishes that the obligation to withhold tax also applies to commissions paid by non-resident entities to permanent establishments in the territory of the Italian State, thus excluding from this obligation those paid by non-resident entities that do not operate through a permanent establishment in Italy.

In addition to the withholding obligations set out above and relating to the payment of commissions to agents, commission agents and maritime and air brokers, the 2026 Budget Law – by amending Article 25 of Presidential Decree No. 600/1973 – provides for a further case of withholding tax application, which, however, does not apply immediately, as the relevant obligation is expected to come into force in 2028 and, in any case, after the issuance of a specific provision by the Revenue Agency. This withholding obligation applies to all transactions involving the sale of goods and provision of services between companies, in typical B2B transactions. The withholding tax is 0.5% of the consideration for payments made in 2028, increasing to 1% for payments made from 2029 onwards.

(New rules – Barchemagazine.com – Excerpted from Barche, March 2026)

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]]> VAT refunds on charter companies https://www.barchemagazine.com/en/vat-refunds-on-charter-companies-revenue-on-board/ Fri, 16 Jan 2026 09:21:14 +0000 https://www.barchemagazine.com/?p=247095 Let’s examine the possible implications for charter companies regarding VAT refunds by Berardo Lanci* In general, issues relating to VAT […]

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Let’s examine the possible implications for charter companies regarding VAT refunds

by Berardo Lanci*

In general, issues relating to VAT management, including procedures for recovering VAT credits, are of great importance to all businesses. A frequent issue concerns how foreign entities with a permanent establishment in Italy can request a VAT refund.

In the yachting world, this issue may concern, in particular – but not exclusively, of course – foreign charter companies that operate through their parent company but, in addition, have deemed it appropriate, for organisational reasons, to open a permanent establishment in Italy. Consider, for example, companies that manage their charter business from their headquarters abroad but, through their permanent establishment in Italy, provide yacht maintenance and care services or reception and management services to meet the various needs of their customers.

For all these entities, there is uncertainty regarding the procedures for recovering VAT credits that may arise in Italy following the purchase of goods and services in Italy directly from the foreign parent company. There are two possible procedures that could be followed alternatively. First, the parent company could access the simplified VAT credit recovery procedure referred to in Article 38-bis2, Presidential Decree 633/1972, under which foreign EU entities can apply electronically for a VAT credit refund from the tax authorities in their own country, which then deals directly with the Pescara Operations Centre of the Revenue Agency, which handles the refund process. The second – and alternative – procedure provides that the credit generated in Italy is attributable to the permanent establishment and, therefore, the ordinary procedure for the refund of VAT credit for persons established in Italy must be followed, pursuant to Article 30, paragraph 2, letter e), of Presidential Decree 633/1972.

There has been some confusion around this issue, partly due to a misalignment between domestic legislation and the EU directive, followed by national and EU case law and practice. First of all, it should be noted that Article 17 of Presidential Decree 633/1972 establishes that obligations relating to the supply of goods and services carried out in Italy by taxable persons not established in Italy to taxable persons established in Italy are fulfilled by the latter through the reverse charge mechanism, provided that the transaction is carried out directly by the non-resident entity without the intermediation of its permanent establishment in Italy. Therefore, if the permanent establishment is involved, the active transaction of the foreign parent company is attributable to the permanent establishment itself, which becomes the debtor of the related tax due in Italy, while the passive transaction must be invoiced to the permanent establishment, which could ideally generate the VAT credit to be claimed for refund, which, in this case, should take place according to the ordinary procedure referred to in Article 30, paragraph 2, letter e) of Presidential Decree 633/1972.

The refund of VAT credit generated in Italy by the charter company follows a different procedure depending on whether or not there is an Italian permanent establishment involved in the transactions.

In the different case where there is no intervention by the permanent establishment, the transaction is attributed exclusively to the parent company and therefore the refund must be made following the simplified procedure referred to in Article 38-bis2, mentioned above. It is therefore particularly important to identify the criteria based on which it can be considered that the permanent establishment is involved in the transaction carried out by the parent company. In this regard, the Italian Revenue Agency, in its response to the request for ruling no. 33/2025, recalls the provisions of Article 53 of Council Implementing Regulation (EU) No 282/2011, according to which “if a taxable person has a permanent establishment in the territory of the Member State in which the tax is due, that establishment shall be deemed not to be involved in a supply of goods or services … unless the technical or human resources of that permanent establishment are used by it for transactions relating to the supply of those goods or services taxable in that Member State, before or during the supply of those goods or services” .

Therefore, a permanent establishment is considered to be involved for VAT purposes if, being characterised by a sufficient degree of permanence and an adequate structure in terms of human and technical resources, it has actually been involved in the supply of services or goods, using its own resources for transactions related to the performance of the taxable supply. With the aforementioned ruling no. 33, the Revenue Agency went beyond previous guidelines. It clarified, in line with EU regulations, that the mere existence of a permanent establishment in Italy is not sufficient to preclude simplified refunds. To exclude this method of tax refund, the permanent establishment must have directly carried out transactions relevant in Italy or, at the very least, participated in transactions carried out by the parent company.

It is highly recommended that international charter companies conduct a preliminary analysis of the potential role of an Italian permanent establishment to define both the invoicing methods and, consequently, the applicable refund procedure.

Applying this principle to international charter structures, the VAT liability relevant for the purposes discussed here is transferred to the Italian permanent establishment whenever the technical or human resources of that permanent establishment are used to perform all or part of the charter service provided by the parent company. Consequently, any request for a refund of the credit generated in Italy must follow the specific procedure identified above, depending on whether or not the charter service in Italy is carried out through the intervention of that permanent establishment. Evidently, all of the above also affect the identification of the entity to which the Italian operator must issue an invoice, i.e., the parent company or the permanent establishment. For this reason, it is of primary importance that an expert analyse the above issues to determine whether the activity is attributable to the permanent establishment and, consequently, the methods of passive invoicing and any recovery of the VAT credit generated in Italy.

(VAT refunds on charter companies – Barchemagazine.com – Excerpted from Barche, January 2026)

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]]> Obligations of the withholding tax agent https://www.barchemagazine.com/en/obligations-of-the-withholding-tax-agent/ Fri, 19 Dec 2025 07:52:07 +0000 https://www.barchemagazine.com/?p=245498 The Revenue Agency has clarified a doubt that arose regarding the obligation of shipowners who are natural persons to act […]

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The Revenue Agency has clarified a doubt that arose regarding the obligation of shipowners who are natural persons to act as withholding agents

by Berardo Lanci*

In its Answer No. 10 of 15 July 2025, the Italian Revenue Agency clarified a doubt that had arisen regarding the obligation for shipowners who are individuals acting outside the scope of a business, art or profession to act as withholding tax agents. The issue was raised with particular reference to cases where the shipowner is at the head of an organised structure, such that it could be presumed to possess the typical professional skills of a withholding tax agent in relation to its employees.

This doubt is probably the result of confusion between, on the one hand, the legal employment relationships between the crew and the shipowners, and, on the other hand, the related tax obligations, which, however, serve different purposes and arise only if certain conditions are met. This, of course, given the slippery nature of specific issues, does not mean that it can be denied that it is preferable to obtain official clarification from the Revenue Agency in this regard.

However, first pointing out that, for tax purposes, Article 64 of Presidential Decree No. 600/1973 states that a withholding tax agent is someone who, by law, is obliged “to pay taxes on behalf of others, for events or situations relating to them and also as an advance payment…  [by exercising, editor’s note] … recovery unless otherwise expressly provided”. This obligation is therefore imposed on certain persons identified by law, based on specific requirements established by the tax legislator, and without necessarily taking into account the legal situation linking the withholding tax agent to the substituted person.

The Revenue Agency clarifies that there are no withholding tax obligations for shipowners who are individuals acting outside the scope of their business, art or profession, excluding the possibility, even at the shipowner’s option

The provision on which the clarification provided by the Agency is based is contained in Article 23 of the same Presidential Decree No. 600/1973, which establishes that the following persons must act as withholding tax agents for income tax on employment: entities and corporations, partnerships, bankruptcy trustees, liquidators, condominiums and “individuals who carry on commercial enterprises… or agricultural enterprises, individuals who practise arts and professions”. With the question posed to the Revenue Agency, the applicant therefore raises doubts about the possible obligation to act as a withholding tax agent of the owner of a yacht, since – although an individual acting outside the scope of business, art or profession – “may employ a large number of employees (even more than 10) who perform highly professional activities with an organisation comparable to that of a going concern”.

Although the crew employed by the shipowner is organised as a business entity, there is no obligation for the shipowner to withhold tax if he acts outside the scope of his business, art or profession.

The Revenue Agency therefore clarified the question by pointing out that Article 23 above strictly identifies the persons who act as withholding tax agents in relation to income from employment. Thus, a shipowner who is an individual acting outside the scope of commercial business activities cannot, at their option, act as a withholding tax agent concerning emoluments paid to hired crew members.

It is therefore clear that the factual situations highlighted by the applicant, although worthy of consideration, did not lead the Revenue Agency to depart from the literal meaning and hence to consider that the shipowner, as an individual, outside of commercial activity, could act as a withholding tax agent concerning the emoluments paid to his employees. The tax obligation to declare and pay income tax due in relation to the employment activity carried out, therefore, remains exclusively with the latter. Moreover, the list set out in the provision mentioned above must clearly be considered exhaustive, if only because, for mandatory purposes, many other provisions of law refer generically to “the persons referred to in Article 23”, imposing on the latter a series of obligations and formalities that cannot always be fulfilled and implemented by those who are not required to do so by law, including, but not limited to, procedural issues. An extension of the category of persons who may act as withholding tax agents would, in addition to the above, therefore lead to a high risk of procedural confusion

(Obligations of the withholding tax agent – Barchemagazine.com – Excerpted from Barche, December 2025) 

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]]> VAT on boat leasing https://www.barchemagazine.com/en/vat-on-boat-leasing/ Tue, 14 Oct 2025 10:33:18 +0000 https://www.barchemagazine.com/?p=238817 We address critical issues related to the VAT rate definition on leasing contracts between private shipowners by Berardo Lanci* We […]

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We address critical issues related to the VAT rate definition on leasing contracts between private shipowners

by Berardo Lanci*

We have already addressed the issue of VAT treatment of leasing contracts entered into by private shipowners (so-called B2C transactions) on several occasions. The relevant legislation, which regulates non-short-term leasing contracts for yachts to private individuals in general, is contained in Article 7-sexies, paragraph 1, letter e-bis. Of Presidential Decree No. 633/1972, and in Revenue Agency Provisions No. 341339/2020 and No. 151377/2021. Based on these provisions and subject to certain conditions, including the fact that the yacht is made available in Italy, Italian VAT is applied to leasing contracts to the extent that the yacht is used in EU waters.

The recent Ruling No. 159 of 2025 from the Italian Revenue Agency revisited the subject and, among other things, the concept of using the yacht outside Community waters. In particular, in a brief overview of the relevant legislation, the Italian Revenue Agency points out that Italian legislation was adopted in application of the option provided for in Article 59-bis of Directive 2006/ 112/EC to move the place of taxation outside the European Union if the actual use and enjoyment of the services take place outside the Union, by way of derogation from Article 56 of the same VAT Directive, which identifies the place of the rental service as the place where the yacht is actually made available to the recipient.

In the mentioned document (see answer to question no. 2), the Revenue Agency clarifies that, for non-applicability of VAT in Italy, it is necessary, with reference to a yacht that has left territorial waters and is usually moored in a non-EU port, that “the shipowner proves that he has made two trips in international waters during the same week”. This position, intended to clarify critical issues in interpretation, instead created more confusion. To fully understand the confusion created by this practice, it is necessary first to recall that the Provision as mentioned above No. 341339 had established that the use of a yacht ‘means the weeks in which the yacht has travelled between ports (including journeys to and from the same port), excluding journeys between shipyards or ports for technical reasons’.

This definition makes explicit reference to the periods of actual use and navigation of the yacht. Everything seemed clear until 2023, when, with Ruling No. 430, the Italian Revenue Agency decided to extend the definition of use to include mooring in port. The Ruling states that “if… the yacht is equipped or stationed, at the lessee’s choice, at its usual place of shelter in Italy or in another EU country, whether at berth or in dry dock, this constitutes use within the EU. Use is not considered to occur only if the yacht is in the shipyard for maintenance or for technical reasons that prevent its actual use. On the other hand, following the Company’s argument, since it is normal for the boat to be in storage “for most of the duration of the contract” in financial leasing, the taxpayer would pay VAT (in Italy or abroad) only when the boat is in navigation, even though the lease payment is always due for the same amount. In other words, this would mean making the payment of VAT dependent on the lessee’s willingness to use the boat or not, even though it is available, or linking the payment to the cycle of the seasons”.

Ruling no. 159/2025 on nautical leasing did not fully clarify the position of the Revenue Agency, leaving much room for ambiguous situations that easily lend themselves to misinterpretation and, in the future, to possible disputes.

Notwithstanding that, in its interpretation, the Revenue Agency intended to extend the definition of use as established by the Provision above, it is absolutely clear that the Revenue Agency acted in the erroneous conviction that adding weeks of navigation meant adding VAT revenue to the treasury, as if the VAT applicable to leasing fees were determined by adding up the VAT referable to each week, and forgetting that the Provision establishes that the VAT due is determined by defining the percentage of use in Community waters in relation to total use, both inside and outside Community waters. That interpretation – which, although criticised by many, has inevitably influenced the interpretations of operators in the sector – is now followed by Ruling No. 159, which, where possible, has further created confusion in interpretation. It seems that the Revenue Agency has decided to backtrack, adhering to the concept of use that is more in line with the definition given in the Provision, but only about use in non-EU waters, which – it reiterates – must be “effective”. In this, it seems that it has been forgotten that Provision No. 151377/2021 approving the model for declarations of use of leasing services, including financial leasing, rental and similar services not of a short-term nature in the EU territory, expressly states that section A must be used to certify the percentage of “actual use” in the European Union territory of leasing services by users of the yacht.

There is an apparent conflict regarding the definition of the use of the yacht, which is an essential criterion for determining the VAT applicable to leasing fees.

Now, suppose it is true that in law every word has a particular meaning. In that case, we find ourselves in the strange circumstance where actual use is different and has a substantially different impact depending on whether we are inside or outside the community. This conclusion is even more significant if we consider that, using a numerical exercise – which we will omit here so as not to bore the reader – it is clear that it is not at all clear what the Revenue Agency means. In fact, referring to the same situation, the calculation of the percentage of use of the boat within or outside EU waters would lead to a different rate depending on whether the criteria set out in Ruling No. 430/2023 (which looks at use in EU waters) or Ruling No. 159/2025 (which looks at use in non-EU waters) are used.

In light of the above and the obviously conflicting and irreconcilable positions of the Revenue Agency, which also appear to violate the relevant provisions, there are many arguments in defence of the taxpayer in the event of a possible assessment, at least to obtain exclusion from the potential application of penalties. In any case, it is considered necessary for the Revenue Agency to issue a circular that systematically resolves these doubts and enables operators in the sector to operate peacefully without running the risk of engaging in incorrect behaviour induced by unclear and, in any case, irreconcilable interpretations.

(VAT on boat leasing – Barchemagazine.com – Excerpted from Barche, October 2025)

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]]> Charter taxation https://www.barchemagazine.com/en/charter-taxation/ Thu, 25 Sep 2025 07:16:43 +0000 https://www.barchemagazine.com/?p=236626 Chartering in the Italian seas always arouses great interest both for the beauty and importance of our coasts and for […]

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Chartering in the Italian seas always arouses great interest both for the beauty and importance of our coasts and for the high professionalism of the operators offering these services

by Berardo Lanci*

The performance of charter services by operators in the sector also entails paying close attention to specific issues concerning taxation and potential controls by tax authorities. Controls, which, it is obvious to all, are intensified in the summer months, are also increased by the boarding of yachts and access to them by the authorities of the tax administration.

Firstly, it should be clarified in this regard that charter activity may be performed through the use of yachts, regardless of their flag, which does not affect the tax regime for the purchase of the yacht or the related charter activity. The only caveat regarding the foreign flag relates to the obligation of the entity interested in carrying out this activity in Italian waters to submit the relevant application to the competent maritime authority. Once endorsed by the maritime authority, a stamped copy of the application must be kept on board and made available for inspection at any time.

VAT in Italy is not due in cases where the charter begins in an EU country

If the yacht is non-EU, it is necessary to access the temporary admission regime, with the typical peculiarities of the regime applicable to yachts intended for commercial activities. This is without prejudice, however, to the obligation of definitive importation if the yacht in question is used exclusively for charter activities in Italian waters. Attention to the observance of these rules is of considerable importance, given that their violation exposes not only the risk of payment of taxes and penalties but also to the risk of violating criminal rules on smuggling.

The controls of the tax authorities about nautical charters focus more on the correct application of VAT, with particular reference to that due by non-EU subjects, the regime of temporary admission of the yacht, and any distortions connected with the charter activity carried out in favour of the UBO.

The subject of control is then how VAT is applied in Italy, along with the related obligations. Referring to the more detailed analyses carried out in previous articles on the subject, it is recalled that in most cases, VAT is due in Italy when the charter begins in Italy or when it begins outside the EU, but the service is partly carried out in Italian waters. In these cases, the foreign entity is required to obtain an Italian VAT number to apply VAT and, if it is not an EU entity, must also provide a guarantee for the correct payment of VAT. In the event of a tax authority control, it is therefore necessary to be able to prove both the place of departure of the charter (for example, using the charter contract and the documentation of the port of departure) and the correct application of Italian VAT, as mentioned above.

Several hypotheses contest the fictitious interposition
of the charter company.

A further point to consider regarding nautical charters is the attention that the authorities of the financial administration pay to analysing possible distortions associated with the use of the yacht by the natural person who is the de facto owner of the yacht itself (UBO). Indeed, several hypotheses contest the fictitious interposition of the charter company. This entails the disallowance of all the tax advantages connected with the purchase of the yacht by the charter company compared to what would have happened if the yacht had been purchased directly by the UBO (such as, for example, the non-deductibility of the VAT applied to the purchase or maintenance of the yacht). In this regard, both practice and jurisprudence have established principles that are useful in determining whether a hypothesis of interposition can be found, and among these are the following: (i) the charter company must be able to prove that it is actually carrying out an economic activity aimed at the public, and thus, for example, have several clients unrelated to the UBO and in any case have made several quotations to several clients, at least potential ones, and carry out promotion, advertising and marketing activities (ii) any charter services provided to the UBO, in addition to not being exclusive, must not be prevalent concerning those provided to third parties; and in this regard, it should be noted that prevalence may be measured both in terms of days of use of the yacht and in terms of revenue generated by such charter activity; (iii) the price charged to the UBO must be market price and in any event in line with that charged to other clients.

About the aspects highlighted above and given the peculiarities of the taxation regime of the yachting world in general and of the charter activity in particular, it is recommended that operators rely on the specialisation of professionals in the sector and, in any case, take care with the utmost detail of every aspect of the different taxation regimes involved.

(Charter taxation – Barchemagazine.com – Excerpted from Barche, September 2025)

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]]> Nautical chartering https://www.barchemagazine.com/en/nautical-chartering/ Mon, 25 Aug 2025 06:06:08 +0000 https://www.barchemagazine.com/?p=233506 Italy is undoubtedly one of the most attractive destinations for what is known as nautical tourism, and several tax implications […]

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Italy is undoubtedly one of the most attractive destinations for what is known as nautical tourism, and several tax implications are associated with the performance of nautical charter activities by nautical charter operators

by Berardo Lanci*

Firstly, it is worth noting that charter services are subject to VAT at the standard rate of 22%. Moreover, and perhaps even before that, it is essential to clarify that sailing in Italian waters under a charter contract does not necessarily require the application of VAT in Italy. Indeed, based on Article 7-quater of Presidential Decree No. 633/1972 for VAT purposes, the activity of yacht chartering is considered to be carried out in Italy – with the application, therefore, of the Italian VAT – in the hypothesis that the yacht (i) is made available to the client in the territory of the State and is used in EU waters or (ii) is made available to the client outside the territory of the EU and is used in the territory of the State.

Nautical charter contracts are those that the VAT legislation defines as short-term contracts, namely, with uninterrupted possession or use of the yacht for a period not exceeding 90 days.

Therefore, for example, if a charter contract provides for a yacht to be made available in Spain and then brought to Italy, the relevant service will not be subject to VAT in Italy for VAT purposes. If, on the other hand, the yacht is made available in Italy and it is decided to spend part of the contract term in French waters, the entire charter service will be subject to VAT in Italy. On the other hand, if a charter contract provides for the yacht to be made available in a non-EU country and part of the sailing is carried out in Italian waters, Italian VAT will apply only to the portion of the sailing that takes place in Italian waters.

For these purposes, the flag of the vessel involved in the charter contract, or the country in which the charter service provider is established, is irrelevant. Concerning the latter, it is however essential to specify that said charterer, if it is a non-Italian entrepreneur, must obtain a VAT registration number for the possible application of VAT in the cases referred to in the aforementioned Article 7-quater (except in the case where the client is a VAT operator established in Italy, which will apply VAT through the so-called reverse charge system). In particular, if the operator is a European subject, they may obtain a VAT number by identifying themselves directly, as per Article 35-ter of the aforementioned Presidential Decree, or by appointing a fiscal representative, as per Article 17 of the same Presidential Decree.

Nautical chartering is also of particular importance for direct taxation, where the business organisation of the foreign operator leads to the existence in Italy of its permanent establishment.

On the other hand, in the case of a non-European operator, the latter may obtain a VAT number only by appointing a tax representative in Italy, with the additional obligation – introduced by paragraph 7-quater of Article 35 of Presidential Decree No. 633/1972, already commented on in one of our previous publications – of providing an appropriate guarantee. In this way, the VAT operator will also be able to deduct any Italian VAT charged on purchases made in the exercise of his business. About the methods for identifying the place of use of the recreational craft inside or outside EU waters and the time during which the use took place in national, EU or non-EU waters, Revenue Agency Order no. 341339 of 29 October 2020, established a series of criteria that the parties can use involved both to determine the amount of the consideration to be subject to Italian VAT and in the context of possible interlocutions with the tax authorities to which the correctness of their actions from a tax point of view must be demonstrated.

The present analysis cannot be concluded without further consideration of the possibility that the foreign operator may be found to have a permanent establishment in Italy through which it carries out its charter activity, with the consequent taxation in Italy of the income deriving from that activity. Often, the problem does not arise because the operator’s period of stay in Italy does not exceed the minimum term of three months established by the domestic reference legislation (Article 162 of the Income Tax Consolidation Act), which is often extended by the provisions of double taxation treaties. However, it cannot be ruled out that the problem may theoretically arise and, therefore, a specific analysis should be carried out for this purpose, especially by those who exceed this period of permanence or if the operator has a fixed office in Italy through which it carries out promotional activities and signs charter contracts with new clients.

(Nautical chartering – Barchemagazine.com – Excerpted from  Barche, August 2025) 

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]]> Temporary admission https://www.barchemagazine.com/en/temporary-admission-2/ Wed, 16 Jul 2025 07:43:00 +0000 https://www.barchemagazine.com/?p=231764 The temporary admission of pleasure boats for private use according to the circular of the Italian Customs and Monopolies Agency […]

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The temporary admission of pleasure boats for private use according to the circular of the Italian Customs and Monopolies Agency

by Berardo Lanci*

The Italian Customs Agency issued Circular No. 8 of 10 April 2025, which provided an opportunity to review the clarifications issued by the financial administration on the temporary admission of yachts for private use and summarise the main rules representing this regime. In particular, using the temporary admission regime, means of transport – including yachts for private use –registered outside the EU are allowed, under certain conditions, to enter the territory of the European Union, including its territorial waters, with total exemption from customs duties and VAT and without the obligation to submit a customs declaration and provide any security.

Yachts admitted under the temporary admission procedure may freely sail in EU waters and are totally exempt from customs duties and VAT.

Certain conditions must be met for a yacht for private use to benefit from the temporary admission regime, such as (i) registration outside the EU customs territory in the name of a person (individual or legal entity) established outside that territory or, in the case of non-registration, ownership by a person established outside that territory; and (ii) use by persons resident outside the EU, subject to specific cases of exclusion. Moreover, it has been clarified that this regime is applicable irrespective of whether the yacht is functioning or in need of maintenance or repair, and thus also if a yacht is transferred by land from one national border to another place within the Union territory, using another transport means.

Furthermore, one of the main factors for temporary admission is the time element of the yacht’s stay in Union waters. In particular, the regime is admitted for a maximum period of 18 months, before the expiry of which the yacht must be transferred out of EU territorial waters. Alternatively, a different customs procedure must be applied, or a definitive import with payment of customs duties and VAT must be used. Otherwise, a criminal offence of smuggling is committed. The 18 months may also be extended in certain specific cases.

Yachts may also benefit from the temporary admission procedure several times.

Following the amendments in 2016, it is provided that, in exceptional circumstances and at the reasoned request, the customs authorities may grant an extension of the time limit for temporary admission for a reasonable period. Given the relevance of the time element, the date of the beginning of the regime cannot be disregarded. In this respect, entry into the territorial waters of an EU Member State within 12 miles of the coast is, in principle, sufficient to bind the goods to the temporary admission regime. Moreover, the decision to opt for the verbal declaration of entry into the regime, which is made by submitting a special form, helps certify the date of arrival of the vessel in the EU territory for compliance with the maximum time limits. Specific provisions are also laid down for the case where, during the temporary admission regime, the yacht is subjected to one of several possible forms of repair or maintenance work. This will be discussed in a forthcoming article.

(Temporary admission – Barchemagazine.com – Excerpted from Barche, July 2025)

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]]> The occasional charter https://www.barchemagazine.com/en/the-occasional-charter/ Mon, 16 Jun 2025 08:28:04 +0000 https://www.barchemagazine.com/?p=228531 The approaching summer season always attracts the attention of those who wish to occasionally charter their yachts by Berardo Lanci* […]

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The approaching summer season always attracts the attention of those who wish to occasionally charter their yachts

by Berardo Lanci* – photo by ©Guillaume Plisson

With the summer season approaching, a frequently recurring issue of great interest to yacht owners who intend to charter their yacht occasionally arises. This circumstance may occur, for instance, in cases where the owner is in a condition of not using his yacht temporarily or intends, albeit outside the business activity, to use his yacht for profit occasionally.

In Italy, occasional chartering is regulated by Article 49-bis of the Yachting Code, based on that the owner, natural individual or company, not having chartering or leasing as a business purpose, or the user by way of chartering of pleasure yachts and vessels registered in the Italian national registers, may occasionally engage in chartering their craft without this – subject to compliance with certain conditions – constituting commercial use of the same craft.

Shipowners carrying out occasional chartering may opt for a favourable taxation regime of the income derived from such chartering.  

In the case of occasional chartering of pleasure yachts, the command and conduct of the yacht may be assumed by the yachtsman, the user or other personnel, without prejudice to the need to possess the type of nautical license required for the specific situation. This provision, which was introduced in 2011 to encourage pleasure boating and nautical tourism, also allows yachtsmen to benefit from an optional favourable taxation regime that is an alternative to the ordinary taxation regime. The income derived from occasional chartering activities of a total duration not exceeding 42 days is subject to taxation by applying a 20% substitute tax of the ordinary income tax and the relevant surcharges. The income subject to taxation equals the gross amount received, excluding the deductibility of the costs and expenses incurred relating to the charter activity. The substitute tax is paid, by the provisions of Resolution No. 43/E of 23 April 2014, by the deadline established for the payment of the balance of personal income tax and, therefore, by 30 June following the year of reference. The income derived from the occasional chartering of pleasure yachts must be indicated in the specific section of the income tax return relating to substitute taxation, by the procedures established annually by the relevant decrees approving the tax returns’ models.

Before occasional chartering, the shipowner shall notify the competent offices.

Occasional chartering is subject to the communications sent in advance to the Revenue Agency, to the Port Authorities and, where the use of personnel is envisaged, to the Employees Authorities, using the specific form approved by the Decree of 26 February 2013 of the Ministry of Infrastructure and Transport. It is also expressly provided that the charter agreement and such communications, complete with the relevant receipts of transmission, are to be kept on board the pleasure yacht during the chartering period, at the disposal of the authorities for any possible control and are to be retained until the expiration of the time limits for the assessment of income taxes.

(The occasional charter – Barchemagazine.com – Excerpted from Barche, June 2025)

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