And so it continues... This time: V.A.T.

[ausnp84]

Originally Posted by Lizzy Belle

Nope. You pay tax on new boats when they are first purchased from the manufacturer (or dealer or whatever company is selling the boat).

When a private owner sells a boat (or car, book, bike or whatever) to a new private owner, there is no VAT involved.
Which explains why you need the original invoice, which will have the amount of VAT paid on it.

As long as that VAT was paid in Europe, you're fine for the entire EU.

Beat me to it! I've gotta say though, we don't have the original invoice, only the invoice I paid for the boat back in 2010 (with the words "VAT paid" typed on it) and we've not had an issue in France, Spain or Portugal (Atlantic coasts). Maybe they're more finnicky in the Med or further north.

n

[Lizzy Belle]

Originally Posted by ausnp84

Maybe they're more finnicky in the Med or further north.

I have no clue when they check for what papers, to be honest. Seems pretty random.

I'm in Rotterdam, in a marina very close to the Port of Rotterdam, so plenty of Customs around and they randomly check boats coming back from sea.

Since I wasn't sure about all the rules and regulations I decided to check with them when they were in the marina and parked their rib in the slip next to mine. Figured it was a good opportunity to ask them what papers I'd need to produce if they pick me whenever I'm making my way back home

It's funny tho - we had a Chinese flagged ship coming into the marina last summer. They were very law abiding and called ahead, so they were greeted by police and customs after they docked. But they only checked on land -- meaning, all the crew came ashore with the paperwork.

That boat could have been carrying whatever, and even with bringing out a full welcoming committee, no one would have known
Having said that: they came from the UK, and they were boarded there on arrival so maybe the Dutch welcoming committee figured that was recent enough.

[med]

Originally Posted by MonsterJoe

Ok, SO and I are in the process of buying a boat. We're having a bit of back and forth with the broker. And now we're not sure what to make of this.

He said he doesn't have the original receipts for the VAT but since we're going to register the boat in Germany anyway he will provide us with an entry in the french discharge papers.

He gave us a sample of the document (I removed the personal information. It was from a previously sold boat):

Imgur: The most awesome images on the Internet

Anyone knows if this is enough to prove that the VAT has been paid should we ever get stopped by customs etc?

Thanks!

Yes. It says VAT has been paid in big letters and this is on an official document. Proof that VAT has been paid does not get any better than that.
This is better than the original receipt.

[boatman61]

Well... my current boat was registered in France and owned by a Frenchman..
Sent of the papers from Malta where she was lying to de-register her.. got them back and sailed for Portugal.. quite a few stops along the way.. she is still not registered anywhere.. cannot decide.
Built Canada '81 and French owned from new so... reckon she's okay VAT wise.
Opps.. inference is its pretty relaxed out there..

[valhalla360]

Originally Posted by MonsterJoe

As an update... The broker says that in case VAT is not paid, he is going to do so out of the money he keeps in escrow.

How long will he hold it in escrow? If the authorities check you out in 5yrs and decide it's not paid, will he still have the money on hand?

[TrentePieds]

Thanx everybody :-) The danger of acronyms :-). In this 'ere colony the regime is as I outlined it with some variation in terminology and collection method from province to province. Some provinces collect their own Provincial Sales Tax (amazingly enuff abbreviated "PST") in addition to the Federal Sales Tax called "GST" for "Goods and Services Tax"). Other provinces leave the collection to the federal authorities. the combines Provincial and Federal sales taxes are then called HST for "Harmonized Sales Tax").

The control/enforcement device is the registration/licensing process for vehicles and for vessels, for aircraft and even for real estate.

Here is an excerpt from the Regulations that gives the general picture in this province:

With respect to boats, this tax generally applies to
(1) purchases of new and used boats and related equipment

that occur in B.C.;
(2) boats brought into B.C. for use in B.C; and
(3) gifts of boats in B.C.
This tax can also apply when the use of a boat that was acquired under an exemption changes to a non
- exempt use. In this case the change of use rules apply to assess the amount of tax payable. The PST rate is generally seven percent on new and used boats purchased from GST registrants (who also charge GST at the rate of five per cent)
and 12 per cent on private sales of new and used boats
from non-GST registrants. For private sales, purchasers
must remit PST to the Ministry of Finance using a Casual Remittance form provided on the Government of BC., PST website located at gov.bc.ca/pst (“PST Website”).

[Lizzy Belle]

Originally Posted by med

Proof that VAT has been paid does not get any better than that.
This is better than the original receipt.

EU Customs would love you - free monies!

[med]

Originally Posted by Lizzy Belle

EU Customs would love you - free monies!

I don't understand what you mean.

But the document issued on deregistration from the French registry is issued by the Customs authority.

The very same people you would pay your VAT to, if you imported a boat into the France.

The nice customs people are putting it in writing and making if official that VAT has been paid. This form also has a date on it which coincides with your purchase date absolutely confirming in a bullet proof manner that no VAT is due by you and that the boat has a current VAT paid status.

You cannot get anything similar of the same status in the UK. HRMC in the UK will never state that VAT has been paid.

An original VAT receipt is not bullet proof proof that VAT is not due again due to the boat having been exported. All it shows is that some boat builder took some money off the original purchaser for VAT. Whether it was actually paid to HMRC or not cannot be verified, proved or confirmed.

That French document is by far the best VAT proof you can have.

[valhalla360]

Another question (if the boat turns out to be non-VAT Paid):

How do the authorities assign vlaue to the boat? I saw a post on noonsite that suggested in spain, they take 1/10th of the sale price and charge VAT on that amount. Effectively a 2% tax on the sale price. At 2% it would be very tempting to pay it an then have a recent document saying it is paid. Much different from tacking on a 20% tax.

Of course, I haven't found other sources to support this.

[med]

Originally Posted by valhalla360

Another question (if the boat turns out to be non-VAT Paid):

How do the authorities assign vlaue to the boat? I saw a post on noonsite that suggested in spain, they take 1/10th of the sale price and charge VAT on that amount. Effectively a 2% tax on the sale price. At 2% it would be very tempting to pay it an then have a recent document saying it is paid. Much different from tacking on a 20% tax.

Of course, I haven't found other sources to support this.

If you have just bought it, then the value for tax purposes is exactly what you paid for it.

[sigmasailor]

You can always ask for a 21% discount if the paperwork cannot be produced and pay the VAT from that.

[captmikecoin]

Originally Posted by valhalla360

Another question (if the boat turns out to be non-VAT Paid):

How do the authorities assign vlaue to the boat? I saw a post on noonsite that suggested in spain, they take 1/10th of the sale price and charge VAT on that amount. Effectively a 2% tax on the sale price. At 2% it would be very tempting to pay it an then have a recent document saying it is paid. Much different from tacking on a 20% tax.

Of course, I haven't found other sources to support this.

When I looked into paying VAT in Spain about 4 years ago, I asked a specialist (sorry I forget the name, but in Palma, Mallorca) who told me the authorities they deal with look up the current price of the nearest equivalent production boat in their official listing of yacht prices and charge VAT on that. No negotiation. I was unable to get an estimate in advance as it was explained to me that the yacht had to be present in Palma (in this instance) for inspection. Furthermore, once you arrive in the Spanish port of your choice and tell customs you want to pay VAT, you can't leave until you've paid! This is the same process they have for cars which I know from personal experience, values having nothing to do with the marketplace.

I went to Greece where negotiation is or at least used to be possible.

Cheers,

Mike

[Prairie Chicken]

TrentePieds, as a Canadian who spends a great deal of time in the Med, I can confirm that GST & VAT are quite different. The Europeans have the better system. They pay a sales tax once, when new, on a good such as a car or boat, and the tax is then paid for the life of the good. The catch is you need to have proof the VAT has been at some point. Much fairer than here where you get taxed every time you buy a used vehicle, vessel, etc.

The worst that can happen if you get caught up by Customs without a VAT-paid boat is NOT just having to pay the VAT, which can be a considerable sum, 21% of the current value of the boat in Spain. The boat may also be seized & held until not only the VAT but also fines are paid. You don't want to go there. Unlikely, but still a risk.

We have gone thru the VAT-paid issue twice now. Our first boat, built in 1986, wasn't VAT-paid & we eventually paid it. Determining the current value was a challenge but a Customs broker eventually did it by devaluing it from the purchase price paid many years earlier.

The second boat, we were in a situation similar to yourself. The broker insisted we could get a copy of the original invoice showing VAT paid, & besides it wasn't necessary given the paperwork we had in the purchase process. We went ahead with the purchase, then later learned the original invoice was simply not available. We did learn that France was the only country that retained a database so they could provide proof of VAT paid. Other EU countries do not. You really DO need some sort of gov't approved proof the VAT has been paid, or take your chances. Having said that, we do have some other paperwork to support our contention VAT was paid, and we have been thru a check by the Aduanas, who did not question VAT. Still, we are very nervous when the Aduanas are around checking docs. I might add we have no doubt VAT was paid--we just don't have a doc saying so.

[Polux]

Originally Posted by Prairie Chicken

.. We did learn that France was the only country that retained a database so they could provide proof of VAT paid. Other EU countries do not. You really DO need some sort of gov't approved proof the VAT has been paid, or take your chances. Having said that, we do have some other paperwork to support our contention VAT was paid, and we have been thru a check by the Aduanas, who did not question VAT. Still, we are very nervous when the Aduanas are around checking docs. I might add we have no doubt VAT was paid--we just don't have a doc saying so.

That is sadly true. On most countries proof of VAT paid is a mess. I only have some papers from the leasing company that owned the boat showing that the VAT was paid.

When I bought my boat it was on leasing even if I did not buy the boat to the leasing company but to the owner that then finished the leasing. It was confirmed to me by an agency I worked with that in Italy I cannot have an official paper stating that the VAT has been paid.

If some authorities wants to really make it difficult probably I will have to pay VAT again and that happens to most used boats around.

[med]

One thing worth noting, if you buy something which is in the European Union, which is not being bought for export from the European Union, from some one or some company which is resident in the European Union, then you as an individual are not liable for any VAT.

If the seller is a company, they must account for the VAT and issue an invoice showing the amount of VAT paid.

If it is an individual, then in theory the goods are already VAT paid. (If it is not VAT paid then some one previous in the chain of ownership illegally imported the goods - again that previous owner is the one who is liable for the VAT - not you the buyer except in cases of carousel fraud).

In any case, if all the conditions above are met, then the VAT is the responsibility of the seller and not the buyer.

Generally you ensure that on the bill of sale, it is mentioned that the boat is in the EU and is being sold by an EU resident person. That is sufficient to ensure that you will not get into difficulties over VAT (unless there are clear reasons for customs to suspect you are party to fraud by the seller).

Buying a second hand boat in the EU is really no different from buying any second hand object in the EU from an individual - VAT must have been paid (or deemed to have been paid for goods originally sold before VAT was invented).

If buying from a company, then they have to account for the VAT (not you), or ensure that the boat was exported (i.e. delivered to someone outside of the EU).

Note that a VAT paid boat can lose its VAT paid status if it stays outside of the EU more than a certain length of time (3 years I think). It can be reimported again with VAT being paid again only if ownership has not changed in the meantime.

If you buy a boat which is outside of the EU when the actual transaction takes place (NB Gibraltar is outside the EU), then it is not VAT paid any more.