The Italian Revenue Agency – Agenzia delle Entrate (“AE”) was recently asked to clarify the customs and VAT obligations to be fulfilled by a British-flagged yacht sailing in Italian territorial waters after the United Kingdom became a non-EU state on 1 January 2021 following the so-called Brexit.
In its “Risposta” No 26 of 2022, the AE stated the following:
- UK-flagged pleasure yachts that were in EU customs territorial waters on 1 January 2021 retained the status of EU goods;
- the pleasure yachts which were in the customs territory of the UK or another third country on 1 January 2021 lost their status as EU goods;
- the status of the pleasure yacht on 1 January 2021 can be proved by documentary evidence such as a declaration of the port of call.
Furthermore, the AE has clarified that pleasure yachts that have lost their status of EU goods because they were in non-EU territory/water on 1 January 2021 may be reintroduced into the EU free of import duties/VAT (“return goods relief”) pursuant to Article 203 of EU Regulation No. 952 of 2013 upon the occurrence of the following conditions:
- the lapse of time not exceeding 3 years from leaving the EU customs territory to apply for re-introduction;
- the absence of alterations/transformations on the pleasure yacht, ascertained at the time of importation, excluding interventions to maintain its state.
It should be noted that neither the Italian Customs Agency (“Agenzia delle Dogane”) nor the AE have yet clarified the appropriate means of proof to document the previous export to the UK. In fact, the return goods relief is designed for dealings with third countries, for which it is easy to prove the export with the customs declaration. However, as the UK was an EU country before 1 January 2021, there was no customs declaration to confirm the export to the UK.
Finally, if the pleasure yacht does not meet the above return goods relief requirements, AE reminds us that it will be placed under temporary importation for 18 months upon re-entry into EU territorial waters.
After this period, to be calculated from the date indicated on the arrival document (“costituto d’arrivo”), we point out that the pleasure yacht must be imported in an EU Country or has to leave EU waters; otherwise, it will fall under smuggling status.