If you’re organising a big chartering adventure to Italy during the springtime of 2020, you may not yet be aware of some big changes the Italian government is planning to implement. As of April 1 2020, Italy will be introducing a 22% VAT (value-added tax) to all yacht-related expenses, regardless of whether you own the vessel or are just planning to charter. This is an important change to note as such a substantial tax increase from the previous rate of 6.6% can very quickly cause problems for anyone financially unprepared. To get up to speed, make sure to read on to learn all of the important information keen charterers should know about VAT in Italy.
Better understanding VAT in Italy
Just like everywhere else in the European Union, value-added-tax is a tax that is applied to most goods and services in Italy, just like the GST (goods and services tax) is applied to goods and services in Australia. The standard VAT rate in Italy is 22%, but a reduced rate is applied to goods and services depending on their necessity in day-to-day life. For example, certain foods, drinks and agricultural products have a 4% VAT rate attached, while electric power supplies and pharmaceutical drugs have a 10% rate attached. With the rate shift in relation to yachts – which occurs regardless of whether you use a chartering platform like Ahoy Club or outright own your yacht – the tax is included in both the price of the yacht charter itself and the price of any goods or services purchased while onboard the yacht. Although juggling all of these rates might seem like a bit of a chore, make sure to not stress too much as your charter company will be well-versed in any tax-related laws that might apply to your trip.
How VAT is applied in Italy and around the EU
Italy is just one of 140 countries around the world applying VAT to goods and services, with most of these countries being in the EU. Each country applies VAT in different ways, with certain goods and services attracting higher rates depending on how they may relate to a country’s economy (luxury goods are often the exception, however). These rates can also change regularly, as evidenced by the April 1 change in Italy. Previously in Italy, yachts larger than 24m were eligible for a reduction in VAT from the standard 22% to a much smaller 6.6%. When considering the hefty rates superyachts can demand, it should become quickly apparent that this tax gap could cost some people a significant chunk of money. For that reason, it’s best to be prepared, or even make changes to your schedule, if you’re planning on chartering a yacht in Italy in 2020.
Being prepared for chartering trips in Italy
It only take a bit of preparation to save yourself a lot of time, money and headaches. It should be noted in particular that this VAT is owed regardless of whether you commence your trip in Italian waters or enter Italy later from a nearby EU territory. If you’re worried, though, don’t be – if you’re chartering a yacht any good chartering company will supply you with all of the relevant information you need to ensure you have the best journey possible. Instead, make sure to kick your feet up and have a great holiday!
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