Regardless of Italian VAT doubts, superyacht industry faces testing time
The possible increase in the rate of Italian VAT, to 22 per cent, which is set to come in on 1 July, could be deferred. But either way, Italy's charter market faces a testing summer.…
The scheduled one per cent rise in the Italian VAT rate to 22 per cent, which is due to come into force on 1 July 2013, could be delayed indefinitely. Due to disagreements within the country’s fragile coalition government, the incremental increase could be delayed until October 2013 or beyond.
The 1 July increase has already been passed into law and it would take a revision or new piece of legislation to bypass this date. Bearing in mind the protracted nature of enacting laws at national level, this would seem difficult to achieve in less than a week but, according to widely circulated reports in the Italian media, the country’s deputy economy minister, Stefano Fassina said a “delay is inevitable”. This is largely because of the pressure for the hike to be scrapped altogether being placed on PM, Enrico Letta by the Right-leaning People of Freedom party.
Furthermore, a SuperyachtNews.com source said a delay was the most likely outcome of negotiations, and a government announcement was being tabled for 26-28 June.
Whilst Alex Mazzoni, director of Italian fiscal consultancy SOS Yachting, believes the one per cent increase will come into force on 1 July, he also thinks it is a relatively negligible increase, which hides a far greater problem facing the Italian superyacht industry. “The difference between 21 and 22 [per cent] will not do anything to the Italian superyacht market, Mazzoni said. “The reality is that we are in deep trouble – the market up to 40 or 50m for charter just doesn’t exist anymore.”
Mazzoni says that owners are increasingly opting to place their yachts on hard standing rather than incur the costs that keeping them afloat incurs. The fundamental problem facing the Italian market, says Mazzoni is the financial constraints being placed on all but the wealthiest UHNWIs. And the top-end of the charter market itself is being manipulated by last minute bookings at bargain prices.
“We will see a lot of clients coming in from Eastern Europe and a lot of last minute offers but all of the Italian clients will disappear. EU charters will be [non-existent]”, Mazzoni explained. “
If the Right part of the coalition gets its way it would leave the government facing a €4 billion shortfall that would need to be recovered elsewhere in order to meet EU budget deficit requirements. This suggests an air of inevitability to tax increases in some areas.
The 1 July increase has already been passed into law and it would take a revision or new piece of legislation to bypass this date. Bearing in mind the protracted nature of enacting laws at national level, this would seem difficult to achieve in less than a week but, according to widely circulated reports in the Italian media, the country’s deputy economy minister, Stefano Fassina said a “delay is inevitable”. This is largely because of the pressure for the hike to be scrapped altogether being placed on PM, Enrico Letta by the Right-leaning People of Freedom party.
Furthermore, a SuperyachtNews.com source said a delay was the most likely outcome of negotiations, and a government announcement was being tabled for 26-28 June.
Whilst Alex Mazzoni, director of Italian fiscal consultancy SOS Yachting, believes the one per cent increase will come into force on 1 July, he also thinks it is a relatively negligible increase, which hides a far greater problem facing the Italian superyacht industry. “The difference between 21 and 22 [per cent] will not do anything to the Italian superyacht market, Mazzoni said. “The reality is that we are in deep trouble – the market up to 40 or 50m for charter just doesn’t exist anymore.”
Mazzoni says that owners are increasingly opting to place their yachts on hard standing rather than incur the costs that keeping them afloat incurs. The fundamental problem facing the Italian market, says Mazzoni is the financial constraints being placed on all but the wealthiest UHNWIs. And the top-end of the charter market itself is being manipulated by last minute bookings at bargain prices.
“We will see a lot of clients coming in from Eastern Europe and a lot of last minute offers but all of the Italian clients will disappear. EU charters will be [non-existent]”, Mazzoni explained. “
According to Alex Mazzoni, busy Italian marinas could be a thing of the past.
If the Right part of the coalition gets its way it would leave the government facing a €4 billion shortfall that would need to be recovered elsewhere in order to meet EU budget deficit requirements. This suggests an air of inevitability to tax increases in some areas.
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