VAT & Excise legislation
OCEAN points out that tax and duty free ship supply are fundamental for European Ship Suppliers and must be maintained.
What European Ship Suppliers need is direct recognition in EU law of our
• Exemption to pay VAT and
• Exemption to pay excise duties
In international shipping the principle of tax and duty free use of goods and services is of fundamental significance. A ship may be supplied at every port she is calling and therefore competition between Ship Suppliers depends on the cost of goods, on transport conditions and services in different ports. Freedom of taxes is one of the most important conditions to avoid distortions between different ports and different countries.
Freedom of duty has an important effect on supply costs. In countries where indirect taxation is in force, freedom of duties leads to lower prices than in those countries where direct taxation is in force. However, countries where low prices are available may not always be the most suitable, due to circumstances or lack of services for satisfactory trouble-free ship supplying. Nevertheless, ship supplying is an international business in which competition is world-wide and influences supply conditions in every port. It is therefore important that customs, fiscal and market legislation in the EU and in each Member State should only be framed after due consideration of this element of competition.

The  VAT  regulation which concerns Ship Supply and its related  exemptions  are  described   in Directive  2006/112/EC which entered  in  force  1st  Jan  2007  ( Publ.  L347  Vol  49  of  11 Dec 2006 ),in particular Title 9 Chapter 1  and  Chapter 7  Art  148.