ABSTRACT

This chapter focuses on the European Union Value Added Tax (VAT) legislation rather than the national legislation in each Member State. If the place of supply is in Italy and the yacht is purchased by a private individual, the price will be subject to Italian VAT at the standard rate since it is not possible to exempt such a supply. For supplies of or to a yacht to be exempt under Article 148 the yacht must be categorized under French law as a commercial vessel. In the United Kingdom, the equivalent of the combination of Articles 148 and 169 is the zero-rating regime in Group 8, Schedule 8 of the Value Added Tax Act 1994. In the context of the yachting industry, the United Kingdom zero-rating legislation can apply in two principal circumstances. First, where the yacht is treated as a "qualifying ship" and, secondly, where the supply of the yacht is categorized as the supply of passenger transport.