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Old 09-07-2012, 23:22   #1
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"Tax not paid" (maybe EU) - what does it mean?

I've noticed that a bunch of boats listed on Yachtworld have the note "tax not paid" next to the price, particularly the ones listed in EUR.

What does that mean for EU-based buyers, and what does it mean for foreigners?

Can a new buyer retain this status?

Thanks
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Old 09-07-2012, 23:50   #2
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Re: "Tax not paid" (maybe EU) - what does it mean?

For us it means we have 18 months in EU countries and then we need to vamoose, where we are now (CROATIA) is currently ok until they join the club next year.

When we eventually get back to Australia i believe we are due to pay GST (equiv to VAT) at 10% based on our purchase price......

That's our understanding.
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Old 10-07-2012, 00:45   #3
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Re: "Tax not paid" (maybe EU) - what does it mean?

And don't forget the 5% duty if you bought a vessel manufactured in a country that does not have a free trade agreement with Australia.
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Old 10-07-2012, 01:03   #4
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Re: "Tax not paid" (maybe EU) - what does it mean?

For EU buyers - it means that when you bring the boat into the EU you will need to pay VAT (sales tax.) If you don't - you will probably have a hard time when you go to sell the boat. Also if you get caught (and lots of water police/harbour/customs will check to see if you have a receipt) then you will be forced to pay tax plus you will get a not insignificant fine (meaning huge fine)
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Old 10-07-2012, 01:08   #5
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Re: "Tax not paid" (maybe EU) - what does it mean?

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Originally Posted by The Jeepsters View Post
And don't forget the 5% duty if you bought a vessel manufactured in a country that does not have a free trade agreement with Australia.
Yer nothing's free!!!!
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Old 10-07-2012, 01:14   #6
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Re: "Tax not paid" (maybe EU) - what does it mean?

It almost certainly refers to Value Added Tax (VAT). You can use the boat for a certain period of time within the VAT area but must then remove it or VAT will become payable. The payment will be a percentage of the value of the boat as set by an independent surveyor, and the percentage will vary according to the country you are in at the time.

The VAT clock is stopped and restarted by a verifiable trip out of the VAT area, which is why Albania, Morocco, Turkey etc make attractive diversions for non-VAT paid boats.

In some places they will check your VAT paid status (though it not yet happened to us but we sail an elderly, UK-flagged vessel).

The VAT area is not co-terminus with Schengen. Also VAT is a tax on the movement of goods, while Schengen is a control on the movement of people. If you are not EU citizens with freedom of movement in the Eu or Schengen area, your own rights to stay (normally 90 days in 365) in any one country will be less than your VAT-unpaid time of stay (normally 18 months).

So - buy a non-VAT-paid boat if you are not interested in sailing long term in the relevant European countries, and it is for sale in a country outside the VAT zone. If you want to spend long periods in VAT countries, then I would think carefully before buying.
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Old 10-07-2012, 01:26   #7
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Re: "Tax not paid" (maybe EU) - what does it mean?

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Originally Posted by Roaring Girl View Post
It almost certainly refers to Value Added Tax (VAT). You can use the boat for a certain period of time within the VAT area but must then remove it or VAT will become payable. The payment will be a percentage of the value of the boat as set by an independent surveyor, and the percentage will vary according to the country you are in at the time.

The VAT clock is stopped and restarted by a verifiable trip out of the VAT area, which is why Albania, Morocco, Turkey etc make attractive diversions for non-VAT paid boats.

In some places they will check your VAT paid status (though it not yet happened to us but we sail an elderly, UK-flagged vessel).

The VAT area is not co-terminus with Schengen. Also VAT is a tax on the movement of goods, while Schengen is a control on the movement of people. If you are not EU citizens with freedom of movement in the Eu or Schengen area, your own rights to stay (normally 90 days in 365) in any one country will be less than your VAT-unpaid time of stay (normally 18 months).

So - buy a non-VAT-paid boat if you are not interested in sailing long term in the relevant European countries, and it is for sale in a country outside the VAT zone. If you want to spend long periods in VAT countries, then I would think carefully before buying.
Sarah you sound like you know your stuff, what are your thoughts on this scenario?

1) Boat is Australian registered so can stay 18 months?

2) We are dual AUS/UK citizens.

3) We exit/re-enter Aus using our Aus passports.

4) We enter/exit Europe using UK passports hence no time restrictions in Europe.

We believe as long as we remove the boat within 18 accumulated months in Europe that we are not liable, do you agree?

Cheers Frank
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Old 10-07-2012, 03:00   #8
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More confusion

1. Schengen visit time for non EU passport holders is 90 days in 180. ( not 365)

2. If you are a EU tax resident ( irrespective of passport status ) VAT is due within 3 days of buying a VAT free boat and keeping it in the EU or importing it into the EU . In essence the law requires THE SELLER to pay the vat before selling it to you, unless you are a VAT registered entity with a valid VAT no.

3. If you are not an EU tax resident then you have 18 months before VAT is due. You can reset that time by the boat spending 24 out of the EU customs union territory.

4. If you have dual EU passports and are travelling on them. Then just ensure you can prove you are not a EU tax resident. ( domestic bills , Australian tax returns etc)

5. Note that in general VAT is an issue for the country you live in. Not the one you visit.
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Old 10-07-2012, 03:14   #9
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Re: "Tax not paid" (maybe EU) - what does it mean?

1. Schengen visit time for non EU passport holders is 90 days in 180. ( not 365) UK gives EU status?

2. If you are a EU tax resident ( irrespective of passport status ) VAT is due within 3 days of buying a VAT free boat and keeping it in the EU or importing it into the EU . In essence the law requires THE SELLER to pay the vat before selling it to you, unless you are a VAT registered entity with a valid VAT no. Australian tax residents.

3. If you are not an EU tax resident then you have 18 months before VAT is due. You can reset that time by the boat spending 24 out of the EU customs union territory. Leaving within 18mths

4. If you have dual EU passports and are travelling on them. Then just ensure you can prove you are not a EU tax resident. ( domestic bills , Australian tax returns etc) Not a problem providing Aussie details

5. Note that in general VAT is an issue for the country you live in. Not the one you visit.Understood we are cool with the GST in Australia upon return

It all builds the knowledge base of a confusing system, appreciate your comments.. Cheers
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Old 10-07-2012, 05:11   #10
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Re: "Tax not paid" (maybe EU) - what does it mean?

Quote:
Originally Posted by welljim View Post
I've noticed that a bunch of boats listed on Yachtworld have the note "tax not paid" next to the price, particularly the ones listed in EUR.

What does that mean for EU-based buyers, and what does it mean for foreigners?

Can a new buyer retain this status?

Thanks
In very simple terms:

1. If you are neither EU citizen nor resident, it's not a problem. Register the boat in your home country or some non-EU country, and leave EU waters every 18 months, and you're ok as far as EU VAT is concerned. Your home taxes might be a different story; also there are taxes In some EU countries (like Spain) besides VAT - be careful.

2. If you are either an EU citizen or resident and plan to use the boat in EU waters, you must pay VAT on top of the purchase price, even if you register the boat in a non-EU country and even if you stay less than 18 months at a time.
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Old 10-07-2012, 06:17   #11
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Re: "Tax not paid" (maybe EU) - what does it mean?

Frank - why did you register Aus?
As soon as you arrive home you are up for GST@ 10% & Duty @ 5%
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Old 10-07-2012, 08:17   #12
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The term EU citizen is confusing , firstly there's is no such thing. Secondly the OP travelling under a UK passport is a "Eu citizen" A EU citizen may utilise the VAT exemption provided he or she isn't a EU tax resident , equally a non EU citizen who is a EU tax resident may not utilise the VAT exception

The flag of the vessel is irrelevant under VAR regulations
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Old 10-07-2012, 15:39   #13
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Re: "Tax not paid" (maybe EU) - what does it mean?

I haven't yet we were about to, do you advise otherwise?
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Old 11-07-2012, 22:36   #14
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Re: "Tax not paid" (maybe EU) - what does it mean?

Quote:
3. If you are not an EU tax resident then you have 18 months before VAT is due. You can reset that time by the boat spending 24 out of the EU customs union territory.
24 what? Hours / Days / Weeks / Months?

Thanks
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Old 12-07-2012, 01:58   #15
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Quote:
Originally Posted by welljim

24 what? Hours / Days / Weeks / Months?

Thanks
The legislation does not specify a time. Many have taken that to be 24 hours.
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