Purchase Of Yachts By Italian Simple Partnership

Cases in which yacht owners decide to purchase yachts for their own and their family's personal use through a simple partnership are not unusual.

The simple partnership is one of the partnerships provided for in the Civil Code, characterised by the fact that it is not allowed to engage in commercial or business activities.

What has raised some perplexity on this point on the part of some operators in the sector is the tax aspects and, in particular, the concern that the use of the yacht for the personal purposes of the partner of the simple partnership could make the provision of Article 67, paragraph 1, letter h-ter, of the Income Tax Code applicable, pursuant to which the granting of the use of business assets to partners or family members of the entrepreneur is taxable as ‘’other income‘’. This provision was introduced in order to tax the use of business assets for personal purposes by the shareholder.

The position argued by some has therefore been to make the aforesaid rule applicable also in the case of yachts purchased through simple partnerships.

In actual fact, the exclusion of this risk results from the same provision, which, as also recalled by the Revenue Agency (Circular Letter No. 26/E of 2012, among others), is applicable in the hypothesis that the grantor is represented by individual entrepreneurs, partnerships (general and limited partnerships), corporations (joint-stock companies, limited liability companies, limited partnerships), cooperative societies, permanent establishments of non-resident companies, and private association-type entities limited to assets relating to the commercial sphere.

As simple companies are not included in this list - as they are not allowed to carry out business activities of a commercial nature - it must be considered that the provision of Article 67 of the TUIR mentioned above is not applicable to them.

This interpretation has also been recently confirmed by the Supreme Court of Cassation, which, in Judgement No. 17441 of 2024, confirmed that the peculiarity of the simple partnership, which is not allowed to carry out business activities, excludes it from the scope of the above-mentioned rule.

However, it is interesting to reflect on the VAT treatment of simple companies in cases where their exclusive or principal object is the holding and management of assets. In this case, in fact, although they have a VAT number, it is considered that simple partnerships do not carry out any activity relevant for VAT purposes. Therefore, the purchase of a yacht must be treated in the same way as the purchase of a yacht by a individual not engaged in a business, art or profession, including the possibility of applying the provision relating to long-term leasing (Article 7-sexies, paragraph 1(e-bis) of Presidential Decree No. 633/1972) under which VAT is applied to the leasing instalments in proportion to the use of the yacht in EU waters.