OCEAN - European Ship Suppliers Organization

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

VAT

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.

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