Yachts: recent developments on the tax front

VAT exemption and customs duty relief for individuals relocating their residence to the European Union

As a general rule, the importation into Italy of a pleasure yacht from a non-EU country is subject to import VAT, currently levied at 22%, together with any applicable customs duties, unless a suspensive regime such as temporary admission applies.

However, another exemption is of particular interest to HNWIs: the VAT exemption and customs duty relief available to individuals transferring their normal place of residence from a non-EU country to the European Union.

In this regard, through Ruling No. 105 issued on 25 May, the Italian Revenue Agency clarified that the VAT exemption for personal property may also apply where the asset is held through a foreign corporate vehicle, provided that the economic availability of the asset can be attributed to the individual relocating their residence.

Although the clarification was provided in response to a specific tax ruling request, it offers valuable guidance for taxpayers planning to relocate to Italy and import their personal assets.

The case concerned an individual intending to transfer their residence from the United Kingdom to Italy while electing for the Italian non-dom tax regime. The individual owned 99.99% of a limited partnership that held title to a pleasure yacht registered under the Isle of Man flag and used exclusively for private purposes.

The Italian Revenue Agency confirmed the applicability of the VAT exemption provided by Directive 2009/132/EC for personal property imported in connection with a transfer of residence, addressing two distinct interpretative issues: the requirement relating to possession of the asset and the requirement concerning its use at the place of previous normal residence.

Referring to the case law of the Court of Justice of the European Union (Judgment of 17 March 2005, Case C-170/03, Feron), the Agency clarified that, for the purposes of customs relief, the relevant concept of possession is effective control over the asset, irrespective of formal legal ownership. The Court had already established that access to the exemption cannot be limited solely to assets formally owned by the taxpayer, but also extends to assets over which the taxpayer exercises actual control.

In the case under review, the yacht was legally owned by the limited partnership. However, the partnership carried on no commercial activity and was entirely attributable to the applicant, who was also the sole individual authorised by the company to use and dispose of the yacht without restriction.

Perhaps the most significant aspect of the ruling is its recognition of structures commonly used in the private client sphere, where assets are frequently held through corporate vehicles for purposes such as liability protection, confidentiality, or succession planning.

With regard to the second requirement, the Agency accepted the taxpayer’s position, placing particular emphasis on the Customs and Excise Agreement, under which the Isle of Man and the United Kingdom are treated as a single customs and VAT territory. As a result, registration of the yacht in the Isle of Man did not prevent access to the exemption, notwithstanding the taxpayer’s UK residence.

The Agency further stated that the use of the yacht in the waters of other non-EU countries would not jeopardise the availability of the relief, as such circumstances fall within the “special cases” contemplated by Article 4 of Directive 2009/132/EC.

This represents a significant development for the yachting sector, as it acknowledges the inherently mobile nature of yachts.

The position adopted by the Italian Revenue Agency confirms a substance-over-form approach that is consistent with the way pleasure assets are typically held and used internationally. In particular, the ruling appears to recognise that the existence of an intervening corporate structure does not, in itself, constitute a barrier to accessing the customs and VAT relief, provided it can be demonstrated that the taxpayer had effective control and enjoyment of the asset prior to relocating their residence.

In the context of relocation planning to Italy, the clarification provides greater certainty for internationally mobile individuals. Nevertheless, the availability of the exemption remains subject to a careful assessment of the relevant facts and circumstances, as well as the supporting documentation available in each case.

Published by Advisor on 19 August 2026.