September 27, 2021


Italy has violated EU law by exempting from the payment of excise duty on the fuels of private pleasure boats, chartered and used by end users for non-commercial activities; the fact that the rental constitutes a commercial activity for those who make it available to others does not justify the tax exemption in question.

In 2018, the EU Commission accused Italy of the violation of Directive (EC) no. 2003/96 on the taxation of energy products and electricity, exempting the sale of fuels used by private pleasure boats subject to a charter agreement from the payment of excise duties, regardless of the purpose of use for private pleasure by the charterers. In 2020, the EU Commission, considering the clarifications provided by Italy to be unsatisfactory, brought an action for non-compliance with the EU Court of Justice (case no.C-341/20). It recognized that, by granting the benefit of the exemption from excise duty to fuels used by private pleasure boats by a charter contract, irrespective of their actual intended use, Italy had contravened the obligations arising from Directive (EC) No. 2003/96. The tax exemption, in fact, is linked to the circumstance that energy products are used as fuel for navigation in EU waters for commercial purposes, when a vessel is used directly for the provision of services (e.g., transport) for a fee.

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