Sales Tax - Buying and Selling Implications

[UFO]

What are the implications with Sales Tax in Buying and Selling a boat in countries where you are not a resident?


E.G Buy a Boat in Europe or Caribbean (I'm not a EU/Caribbean Resident) with No VAT Paid - Sail boat around for a few years - Never Long enough in Europe/Caribbean or 1 place to get hit with Sales Tax.



When I want to sell the boat what are the Sales Tax Implications for say Re-selling in Europe or the Caribbean or somewhere else I am not a resident?

[Montanan]

The laws that apply to the jurisdiction in which the boat is sold determine the applicability of sales tax; the laws that apply to the jurisdiction in which the boat is used determine the applicability of use tax.

VAT applies to where the value is added.

Determine which jurisdiction(s) you are obligated to and then you will find your answers.

As with all taxation, the Devil is in the details.

[UFO]

Originally Posted by Montanan

The laws that apply to the jurisdiction in which the boat is sold determine the applicability of sales tax; the laws that apply to the jurisdiction in which the boat is used determine the applicability of use tax.

VAT applies to where the value is added.

Determine which jurisdiction(s) you are obligated to and then you will find your answers.

As with all taxation, the Devil is in the details.

So if I bought in Europe, Sailed out of Europe and came back to Europe and sold it, what are the implications if I'm not a European resident?

[denverd0n]

Even within the EU, taxation laws vary from country to country. You have to look into the laws for the specific countries involved. There is no general answer.

[Dave22q]

No special expertise, just an opinion. To sell a boat you must transfer a registered title. The place where you register will probably nail you.
Why are so many on this site convinced that theey can outsmart tax colleectors?

[Montanan]

Originally Posted by Dave22q

No special expertise, just an opinion. To sell a boat you must transfer a registered title. The place where you register will probably nail you.
Why are so many on this site convinced that theey can outsmart tax colleectors?

Titling and registration being two distinct subject matters, but indeed both of which give wind to the tax collectors that there is a vessel on land or sea that is in need of taxation or licensing.

Last time I checked "Europe" is not A country, one needs to be much more specific as to which revenue collectors will be hounding you and for what kind of revenue they will demand.

[skipmac]

Originally Posted by Dave22q

No special expertise, just an opinion. To sell a boat you must transfer a registered title. The place where you register will probably nail you.
Why are so many on this site convinced that theey can outsmart tax colleectors?

I didn't see anything in the OPs comments indicating he wanted to outsmart the tax collector, he asked only about the implications IE what he would have to deal with in buying or selling. Not to say that plenty of others do ask about taxes with the goal of avoiding them.

[Montanan]

Originally Posted by skipmac

I didn't see anything in the OPs comments indicating he wanted to outsmart the tax collector, he asked only about the implications IE what he would have to deal with in buying or selling. Not to say that plenty of others do ask about taxes with the goal of avoiding them.

One does not pursue to outsmart tax collectors, one should just seek to use the laws to your favor and to be smart tax payers. Tax avoidance being legal and wise; tax evasion being illegal and unwise.

There are many threads in the CF that provide useful guidance but the OP must provide explicit details of the entire circumstances and options that are relevant to their situation.

Romans 13 [New International Version]:

Submission to Governing Authorities
13 Let everyone be subject to the governing authorities, for there is no authority except that which God has established. The authorities that exist have been established by God. 2 Consequently, whoever rebels against the authority is rebelling against what God has instituted, and those who do so will bring judgment on themselves. 3 For rulers hold no terror for those who do right, but for those who do wrong. Do you want to be free from fear of the one in authority? Then do what is right and you will be commended. 4 For the one in authority is God’s servant for your good. But if you do wrong, be afraid, for rulers do not bear the sword for no reason. They are God’s servants, agents of wrath to bring punishment on the wrongdoer. 5 Therefore, it is necessary to submit to the authorities, not only because of possible punishment but also as a matter of conscience.
6 This is also why you pay taxes, for the authorities are God’s servants, who give their full time to governing. 7 Give to everyone what you owe them: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor.

[jmschmidt]

There are nine thousand pages of tax law just for the US federal government and many thousands of pages for each state. Rest assured that every country in the world has many more thousands of pages of tax laws. There is no universal standard printed on a 5X7 card.

When you ask a question on taxation on this forum, if you expect an informed, accurate response you need to focus like a laser-beam and provide the specifics. The people who have the knowledge you seek will be able to offer it or direct you to official sources where you can find the answers.

[Montanan]

Originally Posted by jmschmidt

There are nine thousand pages of tax law just for the US federal government and many thousands of pages for each state. Rest assured that every country in the world has many more thousands of pages of tax laws. There is no universal standard printed on a 5X7 card..

Granted there is no universal form, but most tax jurisdiction do have simplified tax return forms along the lines of the following for use by those that don't believe that deductions, exemptions or credits might apply.

[Brewgyver]

It may be worth pointing out that it is usually the buyer only who pays tax, in the case of a private party sale. For example, I bought my boat from a private party, then transferred the USCG documentation. Because the CG shares that info with the State, California sent me a bill for the Use Tax. If the boat had been state registered rather than Documented, I would have had to pay the Use Tax to get the state reg sticker.

[CarinaPDX]

This topic is more complicated than just sales tax. For instance, you can't legally sell a U.S. boat in Mexico because it is there with a temporary import permit (TIP). The VAT-paid status of an EU boat can only be maintained if the ownership is changed with the boat inside the EU. Bringing the boat home can entail tariffs and use tax. As others have noted, the specifics vary widely. If you want to know what is involved then the following locations matter: country of current ownership/documentation, country of future ownership/documentation, physical location of boat during transfer of ownership, combined with history of sales taxes paid.


Greg

[Dooglas]

Nothing wrong with seeking guidance from others. Just remember that they may well know little more than you. If I were selling an item of personal property (such as a boat) with a value over $100K, I would be working with an expert to be sure I followed the correct procedures and protected myself during the transaction. I presume there are marine title or documentation companies in Australia and New Zealand, just like there are in the United States.

[Dooglas]

I apologize. The above was intended to be a response to another discussion ongoing at the same time about boat sales in Australia and New Zealand. However, the observation about marine title and documentation companies is still germane.

[mrmagoo777]

Thank you Sailors. Will have Lawyer in Canada do it.... Buy it in Malta but never bring to Canada. Vat paid in U.K. mAYBE REGISTER IT THERE. Understand if i do ever bring to Canada register it there then and pay tax. Let you know what lawyer says and does. Stephen.