Buying In Europe

[Polux]

Originally Posted by CookiesnTequila

I don't think you can generalize. We are Canadians in the process of purchasing a French flagged boat that is lying in Tunisia. We set out 10 months ago to find our perfect boat, and we decided to go to wherever that might take us. The boat we found is perfect for us - one owner, never chartered, impeccably maintained. As it turned out it was also the best priced one of its kind on the market anywhere in the world. The owner was realistic and he wanted to sell! As a bonus it was fully VAT paid - and still the lowest priced of its kind anywhere.

We hired a reputable experienced international broker, and we did hours of legal research ourselves, and paid for a bit of legal advice for piece of mind, but in the end everything our broker told us was bang on. It really helped that the selling broker was completely fluent in both English and French - if you don't have that you need a translator!!

We flew a surveyor in from Canada, which cost a bit more but got us our Canadian tonnage measurement at the same time, and piece of mind that comes with really being able to communicate with him - and being able to read the survey and not need to get it translated!

The VAT issue was the single toughest to get clear advice on, as it was a real bonus to us and we wanted to be sure we kept it. (We are Canadian and EU citizens). The advice we got, and now firmly believe is correct, differs slightly from what most will tell you on this site. Specifically, it does not necessarily matter if a VAT paid boat is not in EU waters when sold - VAT can still stay with it. But there are circumstances where it is lost. In our case it stays.

the biggest consideration today is the value of the Euro against the US$. Anyone looking to buy with US$ would be very wise to look at European boats today. They are 15+% cheaper today than they were even 6 months ago simply because of changes in the value of the Euro.

Although we have never spent any time in the med, everything we have been reading and hearing from folks on here is that it is a fabulous place to cruise, and most people end up staying way longer than they planned or ever imagined they would. But hey, the anchorages would either be pretty crowded or completely empty if everyone liked the same thing!!

Good luck in your search, wherever it might take you!!

Nice post. But I don't understand why you say you cannot generalize regarding lower prices on recent boats. Your boat, and by the way congratulations, even if bought in Tunisia was an European boat. You can find them also in Turkey and some of those have just a great price because they are more difficult to visit for the average European buyer. Another great place to buy boats slightly cheaper than the others, like yours, and for the same region is Canary Islands and sometimes French Martinique.

Enjoy the boat and the Med. Tunisia itself has some nice spots too for cruising.

For the ones that want to buy in Europe and don't want to pay the price for flying from America a surveyor I can recommend a good and very experienced Italian one that speech English and that works all over the Med.

[CookiesnTequila]

Originally Posted by Polux

Nice post. But I don't understand why you say you cannot generalize regarding lower prices on recent boats. ....

Thank you! My "don't generalize" comment was addressing:

Originally Posted by Dhillen

Like Kenomac, we bought our boat (same boat) in Europe (same brokerage). However, our experiences differ from that point onward.

There is a large price difference in like for like whether or not VAT has been paid. If you, like us, plan on bringing the boat to the US, then why would you pay the extra 20% to have a VAT paid boat? Answer: you don't.

When you bring the boat back to the US you have to pay import duty. If memory serves, it was about 1.4% of value of the vessel on bill of sale. We shipped our boat over to Seattle and had to pick her up with a port representative in Tacoma port, write checks and sign lots of paperwork before we could get on board and get her out of there.

Lots of cheaper boats for sale in Croatia? It probably means they are charter boats and have been used, mis-used and abused for some time. If you are looking at serious cruising boats (just a guess) I would suggest investigating "end of the line" places where cruisers end up and which are "too difficult" to sail back home from. The Caribbean, New Zealand and Malaysia/Thailand are a couple of places that spring to mind. That is where you will find good deals. We bought our last boat, before this one, in Malaysia because of this.

Last point, again from our own (hard-won) experience. Cruising in the Med is fun for some, for us it wasn't. We spent seven months there beginning in Suez and ending in Barcelona. It was a fantastic time, to be sure, but there are better places in our opinion to be on a sailboat.

Good luck.

Dhillen

I just meant that not all well priced boats are charter boats or don't have VAT paid. Don't assume - always take the time to do the research.

[med]

Originally Posted by CookiesnTequila

The VAT issue was the single toughest to get clear advice on, as it was a real bonus to us and we wanted to be sure we kept it. (We are Canadian and EU citizens). The advice we got, and now firmly believe is correct, differs slightly from what most will tell you on this site. Specifically, it does not necessarily matter if a VAT paid boat is not in EU waters when sold - VAT can still stay with it. But there are circumstances where it is lost. In our case it stays.

I cannot see how you can keep the VAT paid status. VAT is a transaction tax which makes things a bit weird in this kind of circumstance.

There may be a grey area if the transaction takes place (VAT is a transaction tax and not any kind of property tax or import tax) and is registered in the EU. Normally only the person who took the boat out of the EU can bring it back in and keep its VAT paid status.

However, if you do move the EU permanently you can import the boat without having to pay VAT on it and it will acquire a VAT paid status (even if VAT was never paid in its life before). You can also keep the boat for up to 18 months in the EU without importing it.

Value Added Tax and Yachts: An Overview « www.yachtworld.com www.yachtworld.com

I hope you are not being deceived.

[rabbi]

Originally Posted by CookiesnTequila

The VAT issue was the single toughest to get clear advice on, as it was a real bonus to us and we wanted to be sure we kept it. (We are Canadian and EU citizens). The advice we got, and now firmly believe is correct, differs slightly from what most will tell you on this site. Specifically, it does not necessarily matter if a VAT paid boat is not in EU waters when sold - VAT can still stay with it. But there are circumstances where it is lost. In our case it stays.

This contradicts anything I have read about VAT.
If the boat's ownership is transferred while the boat is outside the EU VAT area the VAT status is lost. No matter where the deal is signed or what national is buying or selling the boat.

What you can do however is have the boat delivered under the ownership of the vendor and do the handover inside the EU. Maybe you can even be the delivery crew, as long as it's still the vendor's boat.

[goboatingnow]

The advice the OP has received is wrong and any competent vat lawyer or accountant would know the correct answer. However the result is immaterial as he has an original vat invoice and ultimately that's all customs will ever look at.

The reason vat status is lost is simple. , once any EU boat is taken outside the customs union of the EU. It is in fact " exported ". Hence on any return , into the customs union it is an import. Vat is due on all imports, irrespective on whether vat was already paid ( as anyone who has returned an item for repair may have discovered )

Now clearly for a EU tax resident , this is a ridiculous situation,, so VAT. law provides for " returned goods relief " which removes the need to pay vat on import.

There are several criteria

(A) the person exporting the vessel , must be the same person importing it, ie it must not change hands outside the EU
(B) the person must be a EU tax resident
(C) the boat cannot substantially increase in value while outside the EU , ie be modified so as to substantially increase it's value.
(d) the relief applies for three years, but can be extended

Clearly condition A has not been meet

However in practice customs cannot prove the sale was outside the EU nor can they prove the boat was outside, the EU, hence as long as the OP doesn't blab to customs , they will accept the existing vat paperwork

Dave


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[dlymn]

We have been sailing in the Med and in EU countries for 5 years now albeit 3 months each year. We bought a boat in France that had its VAT paid and so there was no tax owing. The customs officers look at this VAT document, decide that, although the boat has been deflagged from France and is now registered in Australia, it is fully paid up tax-wise and so does not require a temporary Import permit. Admittedly we are yet to hit the 18 months of sailing because time on the hard doesn't seem to count for TI. We are now sailing in the Ionian and believe it or not getting good winds and good cruising as opposed to the Golfe de Leon. We are now planning to sell our boat and buy a 45 footer ex-charter Elan based in Croatia. It hasn't had the tax paid and we're worried. I'm not sure why. Many of the tax laws are honoured in the ignoring than in the practice. The customs fellows are pedantic but they also know that we can be the country's bread and butter especially in Greece. Yes there are many laws that might put you off but the reality is far less scarey. Come over and enjoy!!

[med]

Unless the yacht is a megayacht, it is unlikely to have been tracked - at least not permanently. So if the sales paperwork is done in an EU country it is unlikely to ever be questioned.

Don't be tempted to put on that paperwork something which is untrue - like the yacht is somewhere where it is not. Falsifying paperwork is a very serious offence and will land you jail time, where as not having paid VAT when you should have done, will probably get you a small fine on top of the VAT due.

VAT is the responsibility of the person selling the boat if the transaction is taking place in the EU. So if at a later date you do sell the boat inside the EU as a VAT paid boat, it will be you who the authorities will come to for the VAT due if what you are buying now is considered to be outside of the EU and you never paid VAT on reimport.

But the chances of them ever finding out are pretty low (unless you have been obviously blagging about it here and your name and yacht name have been easy to find).

Legally book keeping for VAT needs only be kept for 6 years and the seller is liable.

I have been sailing my UK registered yacht in the Med (France and Spain) for 6 years now. Just once I have been asked for my passport (UK). This was by Spanish customs who came to my boat when I was tied up in a marina I was visiting. It seemed they had picked me out for some reason. They also wanted to see the registration document (but the marina had that as is normal practice for a passing yacht).

Never have I been asked for any proof of VAT nor the sales document for my boat. All marinas will want to see the original registration document for the boat. They will keep it for a short stay to make sure you pay before leaving. Occasionally they will want to see proof of third party insurance. In particular my home marina always asks for that at each yearly renewal of the slip rental.

Many times in the Golf de Leon/Costa Brava I have been called up on VHF and asked where I am coming from, where I am going to, how many people on board, registration number and LOA. Once I was followed by a French customs helicopter for a good 10 minutes at Spanish/French border. I am sure those guys have good sound equipment. The moment I said to a crew mate I was going to call them up on the VHF and ask if they could take some pictures for us they veered off at high speed. I guess if I had said something suspicous they would have had the high speed customs cutter called up from Port Vendres.

I was nearly rammed two customs cutters when sailing into Collioure. One of them was French, the other Spanish and they did not give way/change course until the very last moment. But they did not take any interest in me after that and turned round and went elsewhere.

Note that if your yacht is EU registered, then generally speaking unless there is a blatant VAT fraud, customs will consider it to be the responsibility of the country of registration to deal with the VAT - even more so if your EU passport is from the same EU country as the yacht's registration.

I would strongly suggest you register it somewhere in the EU, preferably, if possible, in the country where you are a citizen (i.e. have a passport). Some countries require you to be resident in order to be able to register, others will do it if you are a citizen of that country without being resident, and I think the Belgiums will do it for whoever asks (and pays the fee).

The usual deal when visiting a marina around here is that as you tie up you give the guy your registration document who will take it to the capitainerie.
One time it was snatched out of the guy's hand by a gust of wind and dropped into the water. To the greate pleasure of the ladies of our crew, he immediately stripped off and jumped in after it! However is sunk too quickly in 11m of water. The marina called out the local diving school operator and had them go after it.

[rabbi]

Originally Posted by med

One time it was snatched out of the guy's hand by a gust of wind and dropped into the water. To the greate pleasure of the ladies of our crew, he immediately stripped off and jumped in after it! However is sunk too quickly in 11m of water. The marina called out the local diving school operator and had them go after it.

And when returned you said: no worries, its just a copy. [emoji1]


We have been aked for registration and insurance most of the time when in a marina.
We have also been checked for VAT three times in two seasons, once in Spain, Italy and Greece. However i could have presented any type of 'original' invoice, they barely looked at it. They were obviously just fishing for an easy catch.

[goboatingnow]

Never had a yacht registration document held. They usually just photocopy it along with the insurance.

Never been questioned about vat. It happens all the time on the internet of course.

Anyway in almost all cases vat is the responsibility of the home nation. In Europe hac is not harmonised so one country cannot recover the vat for another.

Dave