Ownership, importation and charter of yachts and private aircraft for owners moving to Italy: VAT on arrival, company structures, charter rules and reporting.
Almost everything written in English about yacht tax in Italy is written by brokers, and it answers the broker's question: how much VAT is added to a charter that starts in an Italian port. The answer is 22%, and Italy is one row in a table.
That is not the question our clients ask. They ask what happens to a vessel or aircraft they already own when they move to Italy: whether it can come in without VAT on its full value, what the company that holds it becomes once it is managed from Milan, whether the boat must be declared even if it never leaves the Caribbean, and whether the occasional charter that pays for the crew turns them into a business.
Import a yacht into the EU in the ordinary way and VAT is due on its value: on a vessel worth several million euro, a seven-figure entry ticket. But EU law exempts from import VAT the personal property of individuals transferring their normal residence from outside the EU into a Member State, and personal property expressly includes pleasure craft and private aircraft.
In May 2026 the Revenue Agency confirmed how this works (Ruling No. 105 of 25 May 2026), for a UK resident moving to Italy with a non-EU flagged yacht. The exemption was allowed.
The directive granting the exemption was never formally transposed into Italian law. The Agency applies it anyway, by analogy with a 1997 ministerial decree and through the direct effect of unconditional EU provisions. This is not a relief you claim by ticking a box on a customs form: it is a legal position that has to be built and documented.
Owners resident outside the EU can bring a vessel into EU waters under temporary admission without paying import VAT, if it is not chartered to EU residents and leaves within the permitted period, commonly up to 18 months. What the brokers' guides do not say is what happens when the owner stops being a non-EU resident: the basis for the relief falls away and the vessel needs a permanent status.
That is precisely the moment the residence-transfer exemption is available, and the moment it stops being available if the move happens first and the paperwork second. The sequence is the planning. Since Italian residence can be acquired on facts alone, check the four residence tests before you set the date.
Italy introduced an annual ownership tax on pleasure craft, scaled by length, in 2011, cut it back in 2013 and abolished it from 1 January 2016. It is still described on archived pages of the Revenue Agency website, copied into English-language guides still online. There is no annual Italian tax on owning a yacht today: the live questions are VAT, deductibility and who actually uses the vessel.
Italian law is deliberately hostile to using a company as a wrapper for a private boat or plane. VAT on the acquisition and the running costs are deductible only where the asset is the object of the company's own activity (a yacht bought and sold, or genuinely chartered) or is used exclusively as an instrumental asset of it, such as a sailing school's boat.
The bar is higher than ordinary business use. A boat used to move company personnel is still not deductible. For professionals and artists the exclusion is absolute. That is why "should I hold it personally or through a company?" almost never has the answer people expect: a company adds cost and exposure without adding deductibility, unless there is a real commercial activity behind it.
Where there is a genuine commercial activity, the position changes completely. Purchases and imports of vessels engaged in commercial activity and used for navigation on the high seas, charter with crew being the classic case, fall outside Italian VAT, and so do related supplies: spare parts, maintenance, fitting out, provisioning.
The condition is quantitative: at least 70% of voyages beyond twelve nautical miles, measured on the previous year or, for a new vessel, on the first year of use. Access requires an electronic declaration to the Revenue Agency, which issues a protocol number for suppliers and customs. If the threshold is not reached by year end, the VAT must be regularised. A regional directorate has also accepted that a non-operational used vessel can be imported and refitted under the regime, with the test applied in the year it becomes operational.
When a yacht is chartered or leased, VAT follows actual use rather than flags. For short-term contracts (up to 90 days for vessels) and for long-term contracts with private customers, VAT is due only on the share of the fee corresponding to use in EU waters: if 45% of the use is in EU waters, VAT applies to 45% of the fee.
The flat percentages by vessel size that older guides still quote are gone. What replaced them is an evidence regime: actual use outside the EU must be proved under the Revenue Agency's technical rules, with an advance and a final communication each year. The saving is still there; it now has to be earned with navigation data.
For owners who want the boat to earn something without becoming a business, there is a genuinely generous regime. Under the Italian pleasure-craft code, chartering your own vessel occasionally is not a commercial use, and the proceeds can be taxed at a 20% substitute tax in place of income tax and surtaxes.
Exceed the 42 days or miss a notification and the regime falls away entirely: the activity becomes commercial, with VAT registration, bookkeeping and ordinary taxation. A favourable regime with an unforgiving switch, worth operating properly or not at all.
Three failure modes account for most of the assessments we see.
A foreign flag, often chosen for lighter technical requirements, does nothing to help with any of these. And since 2024 a company managed day to day from Italy may simply be Italian tax resident. We deal with this at length through our corporate tax service: it is the same analysis, applied to a boat.
Private aircraft follow the same architecture. VAT and costs are deductible only where the aircraft is the object of the company's own activity or exclusively instrumental to it, and the Supreme Court confirmed in July 2025 how strictly that is read: a helicopter used to carry directors and employees between offices and plant was not exclusively instrumental, so the VAT was not deductible.
On the other side, supplies of aircraft used by airlines operating chiefly on international routes are not subject to VAT, and the EU Court of Justice has extended that treatment to a sale to an operator acquiring the aircraft for exclusive use by such an airline. Aircraft imported on a change of residence follow the same personal-property exemption, with the same six-month condition.
Yachts, pleasure craft and aircraft held abroad are foreign assets for Italian tax monitoring and go in the RW section of the annual return, whether or not they produce income and whether or not they ever come near Italy. Penalties for not reporting run from 3% to 15% of the undeclared value, or 6% to 30% in privileged-tax jurisdictions: for this class of asset, a very large number.
The good news: Italy charges two annual taxes through that section, IVIE, on foreign real estate, and IVAFE, on foreign financial products. A vessel or aircraft is neither, so it is reported but not taxed. With the pleasure-craft tax abolished, Italy does not tax the mere ownership of a yacht at all. It taxes what you do with it.
The value reported is the acquisition cost from supporting documents, or the market value at the start and end of the holding period. Finance is ignored: a vessel bought largely on marine finance goes in at its full figure. With a clean paper trail you report cost, and the number stays stable year on year.
One point is not settled: some tax courts have held that assets unable to produce income in Italy, such as a purely private yacht, need not be reported, while Revenue Agency practice expressly lists pleasure craft and aircraft. The argument exists, but losing it costs a penalty measured on the hull value. We report, and keep the reasoning on file.
Under the lump sum tax for high-net-worth individuals and the 7% regime for pensioners, the reporting obligation for covered foreign assets falls away, one of the quieter but valuable features of those regimes. Reporting is handled through our tax return preparation service. And since yachts and aircraft are classic indicators in Italy's synthetic assessment of income, keep the documents showing how they were paid for: for a new arrival with wealth taxed abroad, the answer is easy if the file is ready.
Yacht and aircraft advice usually comes in two halves that never meet: brokers and managers who understand the asset, and tax advisers who understand residence. Avv. Marco Mesina, a member of the Milan Bar (Ordine degli Avvocati di Milano) and formerly of Deloitte and Withers, works with owners where the two collide: the sequence of a move, the status of the vessel on arrival, the structure that holds it and the reporting that follows. Where it adds certainty, the position can be confirmed in advance with a ruling. We work alongside your managers and brokers, not instead of them.
Not necessarily. EU law exempts personal property imported by individuals transferring their normal residence into a Member State, and pleasure craft qualify, if you owned and used the vessel for at least six months in your previous country and can prove it.
It can. The test is economic availability and effective control, not legal title: in the 2026 ruling, a yacht bought through a company attributable to the individual and used only by them qualified. It is fact-sensitive and worth confirming in advance.
No. The annual tax on pleasure craft was abolished from 1 January 2016, and yachts and aircraft are outside IVIE and IVAFE. Italy taxes what you do with the vessel, not its ownership.
Yes, up to 42 days a year, with a 20% substitute tax on gross proceeds. It requires advance notice to the Revenue Agency and the harbour office before each charter, and the vessel must be on an Italian register.
Only where the vessel is the object of the company's own activity or exclusively instrumental to it. General business use is not enough, and for professionals the exclusion is absolute.
Yes. Foreign vessels and aircraft are reportable in the RW section even if they produce no income. Holders of the lump sum tax and the 7% regime are exempt for the assets those regimes cover.
Flag and tax residence are different questions. A foreign register may suit you technically, but it does not decide VAT status, and it does not stop an owning company from being Italian if it is managed from Italy.
Avv. Marco Mesina
Founder, Move to Dolce Vita · Avvocato, Milan Bar (Ordine degli Avvocati di Milano)
Marco is an Italian tax lawyer who advises individuals and families relocating to Italy on tax regimes, residency, citizenship, real estate and succession planning. Before founding Move to Dolce Vita he worked at Watson Farley & Williams, Withers and Deloitte in Milan.