Inward processing: FAQs on VAT-exempt refits
Last updated: 20/01/2020
Inward processing is the term used to describe a customs control procedure to obtain relief from customs duty and value-added tax (VAT) across Europe.
In this FAQ we aim to answer some of the most commonly asked questions around inward processing, its purpose, and its rules.
How does inward processing benefit yachting?
It allows a vessel temporary permission to dock in the EU for repairs and maintenance, without paying 21% VAT, enabling significant savings and attracting more non-EU yachts to EU waters for works. As a general guideline, it is valid for yachts which have a non-EU flag and non-EU owning company or owner. It is also an excellent opportunity to take advantage of the world-class services and leisure opportunities whilst docked in some of the EU’s incredible marinas and cities.
What areas of refit works are included in the exemption?
The VAT exemption applies only to works and equipment purchased for the vessel. Consumable services are typically not covered under the scheme.
Where can I take advantage of a refit under TPA or inward processing?
VAT-exempt refits typically take place in Spanish, French or Italian shipyards or marinas, and only at those authorised to provide service within the scheme. Under French customs, it is also available in Monaco.
How long is authorised for the vessel to remain in the EU for work?
Typically, the window provided for works to be completed and the vessel to leave EU waters is 18 months. Policies on extensions to the provided window vary by jurisdiction, so it is advised to discuss the specificities with an agent experienced in the location chosen for works to be carried out.
Are there other fees associated with the scheme?
Not by obligation, though many shipyards and marinas may charge a percentage fee to cover administration costs of provisioning work under TPA or inward processing.
Interested in work under inward processing or TPA? Browse our refit and repair business listings to find the perfect supplier.