What changes in nautical leasing. How to save money (and some clarity)

Here we go, maybe. At long last, the Internal Revenue Service has put online the declaration that the owner/user of the boat purchased under an Italian nautical lease must fill out in order to obtain VAT savings. You can find it HERE

All right, simple, clear? No because as always the language is in pure bureaucratic language, difficult if not impossible to interpret if you are not an accountant.

So we, having consulted with experts in the field (who are not yet clear on all the details…), try to clarify what needs to be done to obtain, even under the new regulations, a saving on ‘VAT compared to the 22% that nautical leasing installments for the purchase of a boat are burdened with.

Must do everything the owner/user of the boat under nautical lease

First of all, in the new regulations, the responsibility of the declaration to obtain the VAT reduction is the sole responsibility and liability of the user/owner of the boat and not of the boat leasing company or, in the case of chartering, the company renting the boat.

Actual navigation, not stationing, counts

Then, let’s make it clear right away that in order to get the VAT reduction, you have to certify and prove, if required by the Internal Revenue Service, that you sailed in non-EU (European Union) waters when you used the boat. It does not cover the stationing of the boat when it is stationary and not in use.

Where are the non-EU waters in the Mediterranean

Be careful, make no mistake, the parameter that allows you to reduce the VAT rate of the lease is based on the concept of how much you have sailed in non-EU waters while using the boat. And here it is worth clarifying when a boat is in non-EU waters.

First case, beyond 12 miles from the coast the waters are international and no longer the territory of the nearest nation. For example, if in the Mediterranean you sail in the middle of the Gulf of Lion and you are more than 12 miles from the coast (France and Spain) you are in non-EU waters.

Or, sail to non-EU European countries such as Albania or the African or Turkish coasts you are outside European Union waters.

You have to keep a logbook

Therefore, in order to qualify for VAT savings on nautical leasing fees you should monitor your sailings, keep a Logbook in which you record the time you have sailed on non-EU waters, and possibly in support you should have a document from an AIS or other navigational instrument that serves as proof of your “VAT-free” sailing.

How the VAT reduction is calculated

At this point you need to calculate on the period of actual use of the vessel, for example 30 days in a year, how much time you have sailed in non-EU seas. Let’s say it is 30% of the total browsing use. You will be able to get a 30% VAT discount.

All this you will have to declare to the Internal Revenue Service with the appropriate form and at the same time hand it over to the leasing company (which is the actual owner of the boat). The leasing company will have to reduce the VAT on the installments it is going to issue.

Is it worthwhile or not?

This is what we understood, interpreting the documentation in our possession.

Last, we give you our very personal advice. Pay full 22% VAT on lease payments, now with favorable interest rates. Then if you happen to sail in non-EU waters, make a note of it and then consider whether or not you should apply for the VAT reduction. Accounts in hand.

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