VAT treatment of supplies to (offshore) vessels. When are vessels ‘used for navigation on the high seas’?

Recently, the Court of Justice of the European Union (“CJEU”) decided whether an offshore ‘jackup drilling rig’ anchored on to the seabed qualifies as a ‘vessel used for navigation on the high seas’. This qualification is important for VAT purposes as the supply of vessels used for navigation on the high seas, and the supply of goods for the fueling and provisioning of such vessels are subject to the 0% VAT rate. In this respect, the CJEU considered that a ship can only qualify as a ‘vessel used for navigation’ if it is at least mainly or predominantly used for propulsion at sea. What does this mean for business?

Source: EY

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