The Occasional Chartering Of Pleasure Yacht

With the summer season approaching, a frequently recurring issue of great interest to yacht owners who intend to occasionally charter their yacht comes up. This circumstance may arise, for instance, in cases where the owner is in the condition of not using his yacht temporarily or intends, albeit outside the business activity, to occasionally use his yacht for profit. In Italy, occasional chartering is regulated by Article 49-bis of the Yachting Code, based on that the owner, natural individual or company, not having chartering or leasing as a business purpose, or the user by way of chartering of pleasure yachts and vessels registered in the Italian national registers, may occasionally engage in chartering their own craft without this - subject to compliance with certain conditions - constituting commercial use of the same craft.

In the case of occasional chartering of pleasure yachts, the command and conduct of the yacht may be assumed by the yachtsman, the user or other personnel, without prejudice to the need to possess the type of nautical license required for the specific situation.

This provision, which was introduced in 2011 with the intention of encouraging pleasure boating and nautical tourism, also provides for the possibility for the yachtsmen to benefit from an optional favourable taxation regime, alternative to the ordinary taxation regime. In fact, the income deriving from occasional chartering activities of a total duration not exceeding 42 days is subject to taxation through the application of a 20% substitutive tax of the ordinary income tax and the relevant surcharges. The income subject to taxation is equal to the gross amount received, with the exclusion of the deductibility of the costs and expenses incurred relating to the charter activity. The substitute tax is paid, in accordance with the provisions of Resolution No. 43/E of 23 April 2014, by the deadline established for the payment of the balance of personal income tax and, therefore, by 30 June following the year of reference. The income deriving from the occasional chartering of pleasure yachts must be indicated in the specific section of the income tax return relating to substitute taxation, in accordance with the procedures established annually by the relevant decrees approving the tax returns’ models.

Occasional chartering is subject to the communications sent in advance to the Revenue Agency, to the Port Authorities and, where the use of personnel is envisaged, to the Employees Authorities, using the specific form approved by the Decree of 26 February 2013 of the Ministry of Infrastructure and Transport. It is also expressly provided that the charter agreement and such communications, complete with the relevant receipts of transmission, are to be kept on board the pleasure yacht during the chartering period, at the disposal of the authorities for any possible control, and are to be retained until the expiration of the time limits for the assessment of income taxes.