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Brussels, 19 May 2011

Taxation: Commission demands that Italy comply with the provisions of the VAT Directive on exemptions for ships

The European Commission has formally asked Italy to amend its legislation to bring it into line with the rules on exemptions for ships laid down in the VAT Directive. The Directive provides for exemptions from VAT, under certain conditions, on supplies of goods for fuelling and provisioning vessels used for navigation on the high seas and on the supply, modification, repair, maintenance, chartering and hiring of such vessels. Italian legislation, however, goes further than the Directive and applies a VAT exemption to commercial vessels that are not sailing on the high seas. It also excludes some services that should be covered and exempts from VAT vessels intended for public bodies, which is contrary to the VAT Directive.

Exemptions should, in principle, be applied uniformly. If one Member State extends the application of exemptions, as Italy is doing in this particular case, it creates a disparity between the Member States, because the share of VAT that goes into the EU budget (known as ‘own resources’) will not then be collected. The Commission's request is in the form of a ‘reasoned opinion’, the second stage of the infringement procedure provided for in Article 258 of the Treaty on the Functioning of the European Union (TFEU).

In the absence of measures to bring the legislation into line with EU law within two months of the reasoned opinion, the Commission can refer the matter to the Court of Justice of the European Union.

The Commission sent a letter of formal notice to the Italian authorities on 15 May 2009. They responded by undertaking to bring their legislation into line with EU law. However, the legislation has still not been amended.

For previous press releases on infringement proceedings in the area of taxation and customs see:

For more information about infringement proceedings, see


The latest general information on infringement proceedings against Member States can be found at:

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