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 addition OCEAN believes that a proposal must be made by the EU Commission to the Council of Ministers to implement Article 41 of COUNCIL DIRECTIVE 2008/118/EC, therefore renewing efforts for the development of only 1 clear excise regime in the European Union for Ship Supply. This articles allows the Member States to keep their national rules and regulations for the supply of vessels as long as the Council, acting upon a proposal from the Commission, adopts Community rules on this matter. OCEAN knows that this results in at least 27 different regulations for the supply of vessels and decisions should be made to develop one European procedure for supplying ships with European excise goods under duty suspension.
Legislation on excise productcs
The basic principles applicable to all products subject to excise duties have been laid down in Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products. As from 1 April 2010 a new horizontal Council Directive (2008/118/EC) provides a legal framework for the use of the Excise Movement Control System (EMCS). The current Council Directive 92/12/EEC will be repealed as of that date. Of most important relevance is Article 41 Council Directive 2008/118/EC of 16 December 2008 which allows the Member States to keep their national rules and regulations for the supply of vessels and aircrafts as long as the Council, acting upon a proposal from the Commission, adopts Community rules on this matter ("Until the Council has adopted Community provisions on stores for boats and aircraft, Member States may maintain their national provisions concerning exemptions for such stores.)". This will result in at least 27 different regulations for the supply of vessels and aircrafts. OCEAN hopes to harmonise this provision at EU level to include the supply of excise goods to vessels as an operation exempted from excise duties. The Council directive needs to be amended and the excise duty exemptions for shipsupply harmonised.
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.