The Definition of “Vessels used for Navigation on the High Seas” according to the EU VAT Directive

In the last few years, the European Commission has found several dis-crepancies in the way the EU VAT Directive 2006/112/EC has been imple-mented on the national level, referring some Member States (France and Ita-ly) to the Court of Justice in relation to the VAT exemptions granted to ves-sels not sailing only on the high seas, even if used for commercial purposes. The aim of this study is to analyse the single parts of the definition of “Vessels used for navigation on the high seas” according to the EU VAT Directive, and in particular so, in the context of the applicability of the exemption under Article 148 (a), (c) and (d). The first step must be to assess which vessels have to fulfil the condition of navigation on the high seas in order to benefit from the exemption from VAT focusing on the ones used for commercial ac-tivities. The second step is to determine the concept of high seas in Interna-tional and EU Law, since the VAT Directive does not provide for a defini-tion. The possible criteria to determine whether a vessel is actually used for navigation on the high seas are further considered, assessing how to apply the exemption in cases of mixed use of the vessel. The overall analysis will in-clude a consideration of the recent judgment (case C-526/13) released by the European Court of Justice on 3 September 2015, relating to the exemption (zero rating) for the supply of goods for the fuelling and provisioning of ves-sels used for the navigation on the high seas which suggests a broader inter-pretation of the said VAT exemption down the supply chain.