Presumptions applicable in case of tax assessment of higher incomae related to the ownership of pleasure crafts
by Berardo Lanci*
This article outlines the prerogatives of two presumptive institutes that may be used by the Revenue Agency in the event of an assessment of higher income connected with the ownership of pleasure craft, namely the so-called redditometro, applicable to individuals, and the provisions on shell companies. These institutes were moreover recently referred to in the sixth edition of the Guida Nautica Fisco & Dogane, jointly issued by the Italian Revenue Agency, the Italian Customs and Confindustria Nautica, precisely to highlight their full relevance. This does not mean that when checking the tax positions of shipowners, tax officers cannot also apply other presumptive institutes provided for by the legislator. The first assumption is the fact that the purchase of a pleasure craft by an individual represents a show of wealth connected with the owning of assets or incomes that enables the shipowner to bear the costs not only for the purchase of the boat but also for its management and maintenance.
Two presumptive institutes that may be used by the Revenue Agency in the event of an assessment of higher income connected with the ownership of pleasure crafts are the so-called redditometro, applicable to individuals, and the provisions on shell companies.
In the event of a tax inspection, applying the rules governing the so-called redditometro, the income that the shipowner would have to declare annually is determined on a presumptive basis in consideration of the type of assets owned, the expenses generally incurred and other elements characterising the lifestyle of the shipowner himself and his family. And in this respect, the ownership of a pleasure boat is of particular importance, concerning the purchase cost and the operating and maintenance expenses. In this regard, it should be emphasized that the income presumed using the redditometro is not given by the analytical sum of all the expenses incurred by the taxpayer, but by the minimum income that an individual who owns certain assets and leads a certain lifestyle is presumed to have to declare. Which, at least in theory, may not necessarily coincide with the actual situation. If the annually declared income is 20% lower than the income presumed based on the aforementioned principles, a tax assessment could be issued for higher presumed income, subject to the possibility of proving the possession of other income that is exempt or does not have to be declared or the carrying out of disinvestments that have guaranteed the availability of sums of money or the possession of liquid assets deriving, for example, from income declared in previous years or, again, from donations or inheritances received.
IN BOTH CASES, IT IS POSSIBLE TO DEFEND ONESELF AGAINST A POSSIBLE ASSESSMENT BY PROVIDING SPECIFIC ELEMENTS TO DEMONSTRATE THE REGULARITY OF THE INCOME TAX POSITION.
Under certain conditions, the income of the spouse and other household members may be taken into account in addition to the income declared by the shipowner. In the different hypothesis in which the shipowner decides to purchase the pleasure craft through a company – without prejudice to the potential risk of other findings, such as, for example, the recovery for taxation of costs deemed not inherited – the presumptive provisions relating to shell companies would apply, based on which companies must achieve a minimum income determined based on the value of fixed assets, even if held under a leasing agreement. This hypothesis occurs, for instance, when the shipowner assumes to use the vessel also for charter activities. More specifically, if the revenues realized are lower than the value determined based on specific parameters, the company is considered a shell company and therefore the minimum income is calculated on a presumptive basis, again parameterized to the value of the fixed assets. In the case of fixed assets represented by pleasure craft, the minimum annual revenues must be at least 6% (in certain cases 15%) of the vessel’s tax value and, if this condition is not met, the presumed income would be 4.75% (in certain cases 12%) of the same value.
It is important that the shipowner, in both cases of direct purchase or through a company, performs an analysis of the income tax position, possibly involving a tax advisor specialized in the matter, to simulate the effects of each of the two shown presumptions.
Moreover, in the hypothesis of qualifying as a shell company, there would be further effects, the most significant of which are the increase in the corporate income tax rate of 10.5% and the limitation on the deduction of VAT on purchases, as well as the carry-over of any VAT credit generated by the company. Even in this hypothesis, it is possible to defend oneself against a possible assessment, demonstrating the existence of causes hindering the attainment of the minimum revenues, for example, by presenting a tax ruling to the Revenue Agency with which to represent the specific situation that determined the attainment of revenues lower than those presumed based on the parameters mentioned above. From the foregoing examination of the principles governing the two presumptive institutes in a comment, it is evident how important it is that the shipowner, before purchasing a pleasure craft, verifies the existence of the prerequisites so that the purchase itself does not represent a potential risk of assessment. Therefore, in both cases of direct purchase or through a company, it would be advisable to assess the income position, possibly involving a tax advisor specialized in the matter, to simulate the effects of each of the two mentioned presumptions.
(The hypotheses of the investigation – Barchemagazine.com – January 2023)