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Old 01-04-2018, 05:43   #1
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VAT Questions

VAT Questions

I am an American citizen with a residence in New York. I pay New York State and Federal tax on income from real estate and investments. I do not have European income. However, in order to be able to spend more than three months out of any six in Europe, I applied for and received a Portuguese residency visa. Last summer I sailed my sailboat, a 12 meter cutter, from Newport, Rhode Island (her hailing port where she has been based since her purchase in 2010) to Portugal, clearing at Horta, Faial in June of 2017. I have a number of questions concerning VAT. My understanding is that as a non-European citizen I can keep the boat in the EU for 18 months.

My questions are:

Is the 18 month exemption from the VAT affected by my residency visa?

Can the vessel be taken out of the EU before the 18 month period expires and the be brought back in for another 18 months?

How is the VAT valuation determined and will a valuation survey done here in Portugal suffice? If so how closely well that survey be scrutinized?

Will a vessel flagged in Holland or Brussels and owned by a non-European be able to cruise European waters indefinitely and not subject to VAT.

Is there is a way to flag the vessel in Malta and pay a greatly reduced VAT?

Thank you in advance for any advice or insight to that you may be able to give regarding my situation and these questions.
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Old 01-04-2018, 08:13   #2
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Re: VAT Questions

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VAT Questions

I am an American citizen with a residence in New York. I pay New York State and Federal tax on income from real estate and investments. I do not have European income. However, in order to be able to spend more than three months out of any six in Europe, I applied for and received a Portuguese residency visa. Last summer I sailed my sailboat, a 12 meter cutter, from Newport, Rhode Island (her hailing port where she has been based since her purchase in 2010) to Portugal, clearing at Horta, Faial in June of 2017. I have a number of questions concerning VAT. My understanding is that as a non-European citizen I can keep the boat in the EU for 18 months.

My questions are:

Is the 18 month exemption from the VAT affected by my residency visa?

Can the vessel be taken out of the EU before the 18 month period expires and the be brought back in for another 18 months?

How is the VAT valuation determined and will a valuation survey done here in Portugal suffice? If so how closely well that survey be scrutinized?

Will a vessel flagged in Holland or Brussels and owned by a non-European be able to cruise European waters indefinitely and not subject to VAT.

Is there is a way to flag the vessel in Malta and pay a greatly reduced VAT?

Thank you in advance for any advice or insight to that you may be able to give regarding my situation and these questions.
My understanding is the 18month VAT exemption is based on residency not citizenship...check with an expert but unless they give you an exemption for moving household, VAT is likely due immediately.

I've asked before about valuation. I came across one online reference where it implied they will do a low value if you go to them (I think it was Spain) but otherwise, I haven't found anyone who would confirm or deny what latitude there is in setting the value.

If the boat is already in Portugal and you have residency, you probably missed your window to pick a low VAT country for import. Then again, they have narrowed up the bands, so there isn't as much incentive to shop around for an import country.
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Old 19-04-2018, 08:50   #3
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Re: VAT Questions

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My understanding is the 18month VAT exemption is based on residency not citizenship...check with an expert but unless they give you an exemption for moving household, VAT is likely due immediately.

I've asked before about valuation. I came across one online reference where it implied they will do a low value if you go to them (I think it was Spain) but otherwise, I haven't found anyone who would confirm or deny what latitude there is in setting the value.

If the boat is already in Portugal and you have residency, you probably missed your window to pick a low VAT country for import. Then again, they have narrowed up the bands, so there isn't as much incentive to shop around for an import country.
Thank you! The more I look the more I see that there is quite a bit of conflicting information regarding the VAT situation.
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Old 19-04-2018, 10:14   #4
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I am a Portuguese resident.. when I bought a USA boat in the BVI's I did the VAT in Horta, Azores.. it was 15% back in '07.
What I had to do was present the Bill of Sale and a surveyor came out and had a quick look over and agreed with the Bill of Sale which was $60K..
I think you will find that after one year you will have to pay the VAT or an Import Tax.. if I buy a motorbike in the UK its good for the first year, after that it needs to be taken out country or.. re-register to Portugal.. same with a car.. not cheap.
If your planning to be here long term bite the bullet and do the VAT..
Better to sail to the Azores for this.. its 18%.. the same as Malta and an easier, closer.. the 5 & 7% in Malta is solely related to tourism industries.
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Old 16-05-2018, 04:59   #5
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Re: VAT Questions

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Better to sail to the Azores for this.. its 18%.. the same as Malta and an easier, closer.. the 5 & 7% in Malta is solely related to tourism industries.
There is a further option in Malta which I am currently investigating which will result in a 5% VAT charge for yachts of less than 24 metres. See:https://tinyurl.com/y9x7zt9r
Worth a try?
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Old 16-05-2018, 05:29   #6
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There is a further option in Malta which I am currently investigating which will result in a 5% VAT charge for yachts of less than 24 metres. See:https://tinyurl.com/y9x7zt9r
Worth a try?
Nothing to lose.. Much to gain..
Let us know how you get on..
Just remember one thing..
Technically VAT is liable at the first port of call in the EU.
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Old 16-05-2018, 05:31   #7
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Re: VAT Questions

Certainly. Waiting for a reply from Malta with further details and costs.
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Old 25-05-2018, 05:43   #8
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Re: VAT Questions

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Originally Posted by OldPierre View Post
There is a further option in Malta which I am currently investigating which will result in a 5% VAT charge for yachts of less than 24 metres. See:https://tinyurl.com/y9x7zt9r
Worth a try?
Thank you! I'll give them a call.
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Old 25-05-2018, 08:44   #9
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Re: VAT Questions

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Certainly. Waiting for a reply from Malta with further details and costs.
Who did you contact and any results? TIA
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