The European Commission has issued guidelines regarding the application of the intracommunity VAT modifications upon the year 2020.

The most important point for the yachting industry is the application of more stringent rules as regards the proof of transport in intracommunity supplies.

Indeed, a condition for an intracommunity supply to be exempted from VAT is to prove that the goods have reached their destination (transported from one Member State to another).

The documents to provide have been listed in the EU regulation:

• If the seller is to take care of the transportation, he must provide
• Two documents among; bill of lading, consignment note, transporter’s invoice, transport contract
• Or one document from the list above plus one of the documents among; insurance policy regarding the shipment, banking documents or official documents thereof
• If the buyer is to organize the transportation, he must provide:
• The same document as mentioned above plus a written statement certifying that the goods have been shipped and transported by him or by a third party on his behalf.

Respecting the conditions above would only give a presumption to the authorities that the transaction is VAT exempted.

However, such conditions would be impossible to fulfill in the case of an intracommunity supply of a vessel moving by its own propulsion.

We could have been in a case where the vessel (the good) has properly been moved from one member State to another but unable to submit the proper documentation.

In this specific case, the Commission considers that “the fact that the conditions (…) are not fulfilled does not mean automatically that the exemption (…) will not apply. In this case, it will remain up to the supplier to prove, to the satisfaction of the tax authorities, that the conditions for the exemption (transport included) (…) are met”.

Therefore, this means that, for the specific case of yachts moving by their own means, the regulation shall remain the same as it was in the past and it will be necessary to prove, by all means, that the vessel has touched its country of destination.

 

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