VAT Refund Possible When Exiting EU ?

[simonmd]

Sure it does. Here in Spain, it's very much a 'cash ecconomy' meaning that with most independant trades, paying cash means no VAT. Probably explains why the country's ecconomy is in such a bad way.

Buying outside the VAT area is deffinately worth while. I'm lucky enough to be near Gibraltar, a tax free zone and have bought several items there, including this very laptop that i'm typing this on, from reputable retailers. Now, 'technicaly', I should have declared it when I drove back into Spain but.....

When I get my new boat down in the next couple of weeks, i'll be spending over £3000 on a watermaker and new batteries tax free, a significant saving.

[VirtualVagabond]

Originally Posted by simonmd

Sure it does. Here in Spain, it's very much a 'cash ecconomy' meaning that with most independant trades, paying cash means no VAT. Probably explains why the country's ecconomy is in such a bad way.

Buying outside the VAT area is deffinately worth while. I'm lucky enough to be near Gibraltar, a tax free zone and have bought several items there, including this very laptop that i'm typing this on, from reputable retailers. Now, 'technicaly', I should have declared it when I drove back into Spain but.....

When I get my new boat down in the next couple of weeks, i'll be spending over £3000 on a watermaker and new batteries tax free, a significant saving.

Is Gibraltar a good place for a cruiser to spend a month or 2 getting upgrades etc. Obviously it is from a tax free point of view, but how do labour costs and marina fees stack up?

[beneteau-500]

yes gibraltar is a good place for tax free turkey is a pain in the neck because of the red tape bull s***

[simonmd]

Originally Posted by VirtualVagabond

Is Gibraltar a good place for a cruiser to spend a month or 2 getting upgrades etc. Obviously it is from a tax free point of view, but how do labour costs and marina fees stack up?

Yes and no. If you've got quite a bit of work to do the best option would be to buy the gear in Gib, Sheppards are the main chandlery there, then sail accross the straits to Morocco. I've just returned from Marina Smir in Morocco and know that skilled labour can be obtained for as little as 20-30 Euros PER DAY. You'll be paying at least that PER HOUR in Gib'.

Mooring in Gib' is on a par with most other Med' marinas, expect to pay 40 Euros p day for an average sized craft.

[svBeBe]

Originally Posted by beneteau-500

AS I SAID BEFORE NO YOU ARE NOT ENTITLED TO A REFUND PLEASE READ THE FOLLOWING GREECE 13TH DIRECTIVE (86/560/EEC) VAT REFUNDS

www.ec.europa.eu/taxation_customs/resources/documents/taxation/vat/traders/vat_refunds/el_en.pdf

see item No 21 of this

I do not see where that addresses a non-EU citizen on a non-EU vessel buying batteries. But I guess it could be interpreted under "g" of Item No. 21 that we are indeed not entitled to a VAT refund. What a rip off since this is a purchase not remaining within the EU.


Judy

[goboatingnow]

Not to flog this thread to death. But VAT is not a customs duty it's a sales tax. When I as a non citizen walk into West marine I pay the sales tax I don't get it back neither when I leave

The return of VAT is very difficult to organise in a way that avoids fraud. If the goods are being exported to an address outside the EU then the retailer has a reasonable expectation that the goods are leaving the EU and can deduct VAT. Ultimately the responsibility lies with the retailer and the rule that applies is " if in doubt charge VAT. " the retailer has no proof that you are going to leave the EU immediately. Nor since there is no need to acquire travel permission is there really any such proof. Customs have really no role in VAT.

Sorry it's not unfair it's just the way it is.

[Doodles]

Originally Posted by goboatingnow

Not to flog this thread to death. But VAT is not a customs duty it's a sales tax. When I as a non citizen walk into West marine I pay the sales tax I don't get it back neither when I leave

The return of VAT is very difficult to organise in a way that avoids fraud. If the goods are being exported to an address outside the EU then the retailer has a reasonable expectation that the goods are leaving the EU and can deduct VAT. Ultimately the responsibility lies with the retailer and the rule that applies is " if in doubt charge VAT. " the retailer has no proof that you are going to leave the EU immediately. Nor since there is no need to acquire travel permission is there really any such proof. Customs have really no role in VAT.

Sorry it's not unfair it's just the way it is.

Excellent point about not getting a refund of sales taxes in the US. Some states like Florida rely so heavily of sales and other taxes from tourist that they don't have to have an income tax.

I just don't see the "rip off" here that the OP suggests.

[simonmd]

And to clarify the point even further, Gibraltar is a tax free zone which is why VAT is not payable. If you pay it at point of sale in a VAT area, it's non refundable.

To give you an example, i've just driven back from Gib' where I ordered and paid for a watermaker. I'll be collecting it in my new boat en route down from the UK and so I won't be paying any VAT. However, if I collected it in my car and drove it to my home port in Spain, i'd be expected to declare it at customs and pay 20% IVA (the Spanish version of VAT), even if I then fitted it to my boat and left the EU all together.

[svBeBe]

Originally Posted by goboatingnow

Not to flog this thread to death. But VAT is not a customs duty it's a sales tax. When I as a non citizen walk into West marine I pay the sales tax I don't get it back neither when I leave

The return of VAT is very difficult to organise in a way that avoids fraud. If the goods are being exported to an address outside the EU then the retailer has a reasonable expectation that the goods are leaving the EU and can deduct VAT. Ultimately the responsibility lies with the retailer and the rule that applies is " if in doubt charge VAT. " the retailer has no proof that you are going to leave the EU immediately. Nor since there is no need to acquire travel permission is there really any such proof. Customs have really no role in VAT.

Sorry it's not unfair it's just the way it is.

Ahh, but if you walked into a West Marine and purchased something that has a final destination of delivery at a place outside of whatever state where you are buying that item, then you DO NOT pay sales tax to the state in which it was purchased. You do owe sales tax for the state of final destination delivery.

For example, if I lived in Louisiana and went to Houston to buy furniture. The furniture is delivered to me in Louisiana. I do not pay Houston or Texas sales tax.

All other countries we have visited in our sailboat that have VAT have had a method of VAT refund for items purchased for a foreign vessel and delivered and installed on that vessel -- because the purchased item will not remain in that country longer than a specified period of time, usually 30 days. Obtaining the VAT refund from Turkey for anti-foul paint was a breeze. Same for items purchased in Australia.

At any rate, we now understand from comments posted in this thread that the EU does not allow VAT refunds like other countries.

As for your comment that travel permission is not required so a country has no way of knowing when a foreign vessel leaves that country -- that is totally not true. We are required to check in and out of each EU country and cannot exceed 90 days within the EU.

Judy
S/V BeBe

[savoir]

It would seem to be a smart business move for a chandlery near a large EU marina to reigister with the local version of the British VAT Retail Export Scheme. Then they could give non EU foreign owners their little bits of VAT refund paperwork. It should give them a leg up on the competition.

This works in Paris which has several ex VAT stores downtown for tourists.

Leaving or not leaving the EU on time should be the boat owner's problem not the store owner's problem.

[Doodles]

Originally Posted by svBeBe

Ahh, but if you walked into a West Marine and purchased something that has a final destination of delivery at a place outside of whatever state where you are buying that item, then you DO NOT pay sales tax to the state in which it was purchased. You do owe sales tax for the state of final destination delivery.

For example, if I lived in Louisiana and went to Houston to buy furniture. The furniture is delivered to me in Louisiana. I do not pay Houston or Texas sales tax.

Judy
S/V BeBe

That's not quite right Judy. Only if the store you are purchasing from does not have a store in the state to which the goods are being shipped. So, if you buy from West Marine in LA and ship to Virginia you pay sales tax because WM has stores in Virginia. If you have any doubt about this here is it is right from their website.

Sales Tax
West Marine is required by law to charge sales tax in any state we have a physical presence. Companies are required by the state and local tax authority to pay sales tax on all items that are sold in or shipped to a location within a state that has a physical presence. Since we have more than 300 stores, we are therefore required to charge sales tax on all purchases made within these states.

[savoir]

It's not as if any of us need another reason not to shop at Worstmarine.

[osirissail]

Originally Posted by svBeBe

Ahh, but if you walked into a West Marine and purchased something that has a final destination of delivery at a place outside of whatever state where you are buying that item, then you DO NOT pay sales tax to the state in which it was purchased. You do owe sales tax for the state of final destination delivery.

For example, if I lived in Louisiana and went to Houston to buy furniture. The furniture is delivered to me in Louisiana. I do not pay Houston or Texas sales tax. . . .

Ahh! this is where your example breaks down in relationship to buying boat parts in a foreign country or a different tax jurisdiction.
- - You did not accept delivery of the item in Texas and then drive it to Louisiana, but instead it was shipped to a different tax address.
- - The OP accepted delivery in the same tax area instead of having it shipped to another tax jurisdiction. As others have posted this is a "sales tax" not a customs duty.
- - It is unique to the USA that we have been able to avoid sales tax by having the purchased item shipped across State borders. Recently more and more States are fighting that and trying to get sales tax revenue even on cross border transactions.

[stevewrye]

All this is still a bit confusing. When I signed the contract for the building of the new boat the company told me I would not have a problem with VAT on the boat because the boat would be leaving Europe and I think they said I have 18 months to leave before I would have to pay VAT. I also asked about buying the goods like a new Avon, outboard, cookware, everything needed for a new boat and was told to give my orders to the company and they would purchase the items so no VAT would be paid. I hope that will be ok or we will go broke. Does anyone one know what the official organization in charge of VAT is so I can contact them to get a better idea?
Not to change the subject too much but it seems hard for non EU cruisers to stay in Europe longer than 6 months. We will have to be in Europe 7 months to be able to make the cross over in November. We get the boat in France in June 2013 but want to be at the factory a month before to oversee the completion. Will it be hard to get an extension of a visa so we can wait out the hurricane season before crossing?
Thanks for any imput.

[simonmd]

To clarify then,

YES you can avoid paying VAT at point of sale if the item is for Export. (even then I belive there are restrictions, the retailer would need the facilities to do this)

NO, once it's paid you can't then claim it back.