VAT & Excise legislation

EU Value Added Tax 
OCEAN points out that tax and duty-free ship supply are fundamental for European Ship Suppliers and must be maintained.
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 a significant 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 significant 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 European VAT regulation which concerns ship supply and its related exemptions are described   in COUNCIL DIRECTIVE 2006/112/EC of 28 November 2006 on the common system of value added tax (as amended).  At the time of last revision, the law stated:
 

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EU Excise Duty 

EU excise duty rules cover the following products: Alcohol, alcoholic drinks, energy products, electricity, and tobacco products. There are reduced rates and exemptions available, such as duty-free purchases. This includes delivery to vessels as ship stores, as per COUNCIL DIRECTIVE (EU) 2020/262 of 19 December 2019 lays down the general arrangements for excise duty (as amended). the law harmonises the conditions for charging excise duty to ensure the proper functioning of the  EU internal market. The formalities at the end of a movement of goods being exported (Article 25) are of particular relevance for ship stores, as are the alternative proofs of receipt and evidence of exit of Article 28. However, non remains more important than Article 49 "Stores for boats and aircraft", which states:"Until the Council has adopted Union provisions on stores for boats and aircraft, Member States may maintain their national provisions concerning exemptions for such stores". As a result, EU Member States decide the rules for excise goods for ship stores, leading to divergence among EU Member States. 

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