In a circular issued by the Italian Customs Authorities Agenzia delle Dogane on 12 May, clarifications were made in relation to the proof of exit that non-European owners/owning companies are required to provide in order to obtain VAT exemption on the building of an Italian yacht.

Previously, to obtain VAT exemption on an exported superyacht in accordance with article 36, paragraph four of the Customs Law Testo Unico della Legge Doganale (TULD), the vessel would need to leave Italian waters and provide proof of exit. However, until now, the only accepted forms of proof were documents and/or evidence that showed the vessel had reach a non-EU harbour. Of late this has proved to be particularly unpopular due to political unrest in nations such as Tunisia and Libya, as well as the refugee crisis in nations like Turkey.

“This new procedure will make exportation formalities easier to complete and tax exemption on the shipbuilding contract easier to obtain for non-EU owners,” explains Ezio Vanucci, partner at Moores Rowland Partners. “Previously the ball was in the owner’s court and, had they not respected the exemption conditions, the shipyard would have been liable to pay 22 per cent VAT on the build in the eyes of the VAT office.”

The aforementioned circular clarified that, in addition to evidence from a non-EU harbour, it is now acceptable to provide a document undersigned by the owner/owning company stating that the vessel has left Italian waters, that is, has cruised beyond the 12-mile boundary. Any declaration to this effect must be supported by satellite evidence from the vessels on board Automatic Identification System confirming its coordinates in international waters. This clarification also relates to the purchase of second-hand vessels.

The only element of the update that is yet to have been clarified is the procedure to be followed by the Harbor Masters in order to confirm the position of the vessels in international waters through their AIS systems. It is expected that this small sticking point will be cleared up in the following weeks.


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