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Old 07-03-2015, 13:17   #1
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How To Not Pay VAT In The EU?

Hi,

Because the rules in EU differ per country and personal circumstances, and they are IMO not very clear, I am searching advise. If someone could help, please? Or maybe refer me to someone specialised in this?

I am about to buy a boat in Croatia. It is currently US flagged. I am EU citizen, but not tax resident. I have not lived there for 10 years and do not own property there.

My plan is to buy the boat and get it out of the EU asap and sail it across the atlantic. So it is basically cross some EU countries and get out.

The current owner is non EU citizen and VAT is obviously not paid. Can I get a Panamanian company, for example, to buy the boat? Is it then automatically Panama flagged?

How do I make sure not to pay VAT in the EU.

Thanks in advance!



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Old 07-03-2015, 13:22   #2
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pirate Re: How To Not Pay VAT In The EU?

Quote:
Originally Posted by watervan View Post
Hi,

Because the rules in EU differ per country and personal circumstances, and they are IMO not very clear, I am searching advise. If someone could help, please? Or maybe refer me to someone specialised in this?

I am about to buy a boat in Croatia. It is currently US flagged. I am EU citizen, but not tax resident. I have not lived there for 10 years and do not own property there.

My plan is to buy the boat and get it out of the EU asap and sail it across the atlantic. So it is basically cross some EU countries and get out.

The current owner is non EU citizen and VAT is obviously not paid. Can I get a Panamanian company, for example, to buy the boat? Is it then automatically Panama flagged?

How do I make sure not to pay VAT in the EU.

Thanks in advance!



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Just say.. its for export.. why over complicate a simple matter..
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Old 07-03-2015, 14:01   #3
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Re: How To Not Pay VAT In The EU?

Quote:
Originally Posted by watervan View Post
Hi,

Because the rules in EU differ per country and personal circumstances, and they are IMO not very clear, I am searching advise. If someone could help, please? Or maybe refer me to someone specialised in this?

I am about to buy a boat in Croatia. It is currently US flagged. I am EU citizen, but not tax resident. I have not lived there for 10 years and do not own property there.

My plan is to buy the boat and get it out of the EU asap and sail it across the atlantic. So it is basically cross some EU countries and get out.

The current owner is non EU citizen and VAT is obviously not paid. Can I get a Panamanian company, for example, to buy the boat? Is it then automatically Panama flagged?

How do I make sure not to pay VAT in the EU.

Thanks in advance!



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Vat is due if an EU resident sails his boat in the E.U. You are not one you say. There is no problem. Flag it anywhere you choose. That is not a related issue and has zero impact on the VAT liability. Tons of info in old forum posts.
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Old 07-03-2015, 14:14   #4
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Re: How To Not Pay VAT In The EU?

Not sure, but I think that you only have a month to get it out of EU waters IF someone is checking.
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Old 08-03-2015, 08:07   #5
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Re: How To Not Pay VAT In The EU?

...like boatman said K.I.S...or use a Delaware LLC as owner, no need for Panama flag.
Lots of Delaware boats cruise in Med...
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Old 08-03-2015, 09:25   #6
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Re: How To Not Pay VAT In The EU?

Thanks so much for the replies so far! This does clear the air quite a bit. Do I then, once out of the EU, need to swap the Delaware for another one? Have read stories that some pacific islands do not like Delaware's?

How long would I be able to cruise the Med? The shorter the better I presume? In the end I still have a EU passport so I probably need to prove that I am not tax resident..? If they check me.. And that I in fact live outside of the EU.

Cheers!




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Old 08-03-2015, 10:03   #7
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Re: How To Not Pay VAT In The EU?

You need to be careful as you are an EU Citizen and there is a clause somewhere that means even if you are not resident you may be liable for VAT regardless of where the boat is registered.

That said there is the EU Sailaway scheme which allows you to purchase a boat within the EU as long as you export it within 30 days of purchase. Easiest way to do this from Croatia is to go to Montenegro. You can then return into EU waters for up to a year on a temporary import.

I'd recommend speaking to a VAT Lawyer or Accountant to get a fuller and clearer picture.

Keiron
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Old 08-03-2015, 10:35   #8
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Re: How To Not Pay VAT In The EU?

Checking with a legitimate legal rep would be the best. But, as a non-EU boat that cruised in the Med for 3 years, our experience was that we, as non-EU residents had a 90-day window that we could be in the EU, and then we (not the boat) had to be out of the EU for 90 days. The boat, however, could be in the EU for 18 months. Then it had to leave the EU for 1 day, re-enter, and then had another 18 months......and as long as that was done, no VAT was due. Turkey, Malta, Croatia,Montenegro, and Albania, as well as the n African countries all worked well. but that was our experience....your mileage may vary!!! But be advised, you will need registration docs, insurance, ICC or proof of your competence, and your passport to enter/go to and leave the various countries...some countries just to check in and out, and others at every port you stop at.
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Old 08-03-2015, 11:23   #9
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Re: How To Not Pay VAT In The EU?

Forget Delaware corporations. A US-flagged vessel must be owned by US citizen(s) and if that's owned by a corporation, the stockholders must still be US citizen(s). Roughly 51% citizen(s) although last time I read, the rules were more complex and precise than a simple 51%. Trying to get smart and slip past that rule can lead to your boat being confiscated and charges being brought.


Better to form a corporation someplace like Panama where they don't care and happily offer flags of convenience.
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Old 08-03-2015, 12:11   #10
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Re: How To Not Pay VAT In The EU?

I Watervan
Croatia is EU member since July 2013
You can buy the boat and put a non-European flag (USA, Delaware, Cayman, Panama…..)
As non-EU boat and VAT not paid, you can sail in European water for 18 months, then you have to leave the EU water for at least 24 hours, you can sail to a non-EU state like Tunisia, Albania or Turkey, you have to do the regular exit formalities. After that, you can sail back in the UE water for another 18 months, doing the regular entry formalities. Very important is to do the regular exit and entry formalities.
Ciao
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Old 08-03-2015, 15:09   #11
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Re: How To Not Pay VAT In The EU?

Quote:
Originally Posted by giorgio View Post
I Watervan
Croatia is EU member since July 2013
You can buy the boat and put a non-European flag (USA, Delaware, Cayman, Panama…..)
As non-EU boat and VAT not paid, you can sail in European water for 18 months, then you have to leave the EU water for at least 24 hours, you can sail to a non-EU state like Tunisia, Albania or Turkey, you have to do the regular exit formalities. After that, you can sail back in the UE water for another 18 months, doing the regular entry formalities. Very important is to do the regular exit and entry formalities.
Ciao
My understanding is that Spain and Italy have started tightening up in the past year because of the No of flags of convenience that were being used by EU passport holders to avoid VAT. There are some companies that specialise in VAT and boats - suggest you look at their websites and maybe talk to them.

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Old 08-03-2015, 17:43   #12
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How To Not Pay VAT In The EU?

Quote:
Originally Posted by watervan View Post
Hi,

Because the rules in EU differ per country and personal circumstances, and they are IMO not very clear, I am searching advise. If someone could help, please? Or maybe refer me to someone specialised in this?

I am about to buy a boat in Croatia. It is currently US flagged. I am EU citizen, but not tax resident. I have not lived there for 10 years and do not own property there.

My plan is to buy the boat and get it out of the EU asap and sail it across the atlantic. So it is basically cross some EU countries and get out.

The current owner is non EU citizen and VAT is obviously not paid. Can I get a Panamanian company, for example, to buy the boat? Is it then automatically Panama flagged?

How do I make sure not to pay VAT in the EU.

Thanks in advance!



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Your citizenship is irrelevant. If you are no EU. Tax resident you can keep the boat in the EU for upto 18 months renewable by leaving the customs territory of the EU for a day. You are quite entities to buy it vat free. ( check how long it's been in the Ezu with vat non paid )


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Old 29-03-2015, 01:59   #13
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Re: How To Not Pay VAT In The EU?

I bought my boat in Croatia 8 years ago and registered it in Jersey - "British Small Ships " register - no VAT required, I have sailed in Croatia Italy and Greece ( currently ) , without a problem . I sail for approx. 3 x months a year and I supposedly exit Greece and then return the following year and apply for a transit log again for the next 3 x months . Good luck Garth
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Old 29-03-2015, 03:14   #14
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Re: How To Not Pay VAT In The EU?

Some Frequently Asked Questions about the rules for private boats - European commission

The key statement is "....this can only be done by persons who are not EU residents - in official terms - by people who are 'established outside that territory'. This facility is thus NOT available to EU residents."

Having an address outside the EU should count as being "established outside that territory" but we have only tested it on one short visit. SWMBO has dual UK and Australian citizenship. All subsequent visits we have made sure to use the Australian passport. (Boat is NZ flagged).

Hope this helps.

Cheers, PT
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Old 29-03-2015, 05:05   #15
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Re: How To Not Pay VAT In The EU?

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Originally Posted by touchngo View Post
Some Frequently Asked Questions about the rules for private boats - European commission

The key statement is "....this can only be done by persons who are not EU residents - in official terms - by people who are 'established outside that territory'. This facility is thus NOT available to EU residents."

Having an address outside the EU should count as being "established outside that territory" but we have only tested it on one short visit. SWMBO has dual UK and Australian citizenship. All subsequent visits we have made sure to use the Australian passport. (Boat is NZ flagged).

Hope this helps.

Cheers, PT
It shouldn't matter if SWMBO uses her UK passport as it's residency, not citizenship. I wonder if it is legal for an EU citizen to enter the EU with a "foreign" passport? Maybe it's not a problem as the UK is not part of Schengen.

Is SWMBO now insisting on re-flaging to a winning nation?
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