The European Union aims to solve the problem of illegal tax incentives for yachts in Cyprus and Italy. Both countries were unable to charge the correct VAT amount for yacht leasing.
Portofino is a small Italian fishing village, a popular resting place for millionaires
European Union Commission (EUC) as part of its ongoing mission to deliver The EU from “dishonest tax evasion practices” takes steps to end illegal tax incentives in the yachting industry Italy and Cyprus.
In a statement for EUC it is argued that both countries were unable to collect the correct amount of VAT on yacht leasing, while the Commission further referred the case to Italy to European Court of Justice for not addressing the illegal system of incentives for fuel used on charter yachts cruising EU waters.
In its application to the court, the Commission of the European Union states:
“Violating EU rules, Italy allows charter pleasure craft such as yachts to qualify as "Commercial"even if they are for personal use. This situation may allow them to take advantage of the excise tax exemption on fuel used to fuel their engines. ”
The EUC issued its opinion on the VAT, warning Italy and Cyprus that without corrective action within two months, the Commission will send these two countries for violations to the European Court of Justice.
“Cyprus and Italy have established VAT rules, according to which, the larger the yacht, the lower the estimated lease payments charged in EU waters. As a result, the applicable base VAT may be significantly reduced, ”the statement says.
“Because of the size of this sector, these illegal and very convenient tax regimes also run counter to the fiscal consolidation processes in these EU member states and provide an unfair competitive advantage,” the release said. EUC.
Also, the message says that “The latest initiatives of the Commission are aimed at creating a single VAT zone in the EUthat is less susceptible to fraud and will facilitate increased cooperation between Member States. VAT fraud problem goes beyond national borders and can be effectively resolved only through joint efforts of the EU member states. "
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