Why are yachts so much cheaper in Europe?

[svlamorocha]

Originally Posted by Kenomac

There are two separate issues, but you keep trying to lump them both into one.

1. Point of sale needs to be in a VAT free economic zone such as Guernsey, Jersey, Gibraltar (good luck with Sark since they don't have a port) and the island is surrounded by cliffs and 10 meter tides) or outside the EU in order to avoid the point of sale (time of sale) VAT due.

2. Following the time of sale transaction, the new non EU owner has up to 18 months to reset the VAT clock by leaving the EU in a non EU country, it takes only a day. Guernsey and Jersey do not work for this.... But somehow Gibraltar does. Unless a customs bonding arrangement has been made via local EU authorities, then the time allowing inside the EU can be extended up to three years without leaving the EU or paying the VAT.

Spot on. Regarding Gibraltar vs Guenrsey, the explanation is that Guernsey is within the Customs territory of the Community, but NOT within the Fiscal territory of the Community, while Gibraltar is outside both.

C

[boatman61]

Originally Posted by Dr. Sea

Buying steel to sail the South Pacific is a waste of precious dollars unless you are including Antarctica in your islands itinerary.

That's MY sales pitch booga'd..

OP.... 'Coz we're all Broke...

[K_V_B]

Originally Posted by MarcoDePolonia

Guernsey, Jersey & Man NEVER were EU territory for VAT purposes.
Google "guernsey + vat".
Guernsey and VAT - Guernsey
It takes 5 seconds to get the RIGHT answer.
Less then writing MISLEADING post.

To get to the right answer you first must correctly read the question. I did nowhere claim that you had to pay VAT in Guernsey, I just claimed that going to Guernsey with a boat that is temporarily imported in the EU does not reset the VAT clock.

And a bit of research supports this. Let's start with the horses mouth: The EU itself:

Some Frequently Asked Questions about the rules for private boats - European Commission

Non-EU vessels which are intended for re-export may be temporarily be brought into and used for private purposes in the EU, or more strictly in the 'customs territory of the Community', (which includes our territorial waters) without customs duties or Value Added Tax (VAT) needing to be paid. But this can only be done by persons who are not EU residents - in official terms - by people who are 'established outside that territory'. This facility is thus NOT available to EU residents.
The boats concerned have to be placed under the 'temporary importation procedure' (TI) with Customs and the period of use in the EU is limited in time. When the time is up the boat has to leave, in official jargon this period is called 'the period of discharge'. The re-exportation of the goods from the customs territory of the Community is the usual way of ending or 'discharging' a temporary importation procedure. If the boat does not leave before the end of that time then customs duty and VAT become due.

The crucial item here is "customs territory of the community". To reset the VAT clock you must leave this geographical area.

The definition of what is, and what is not, part of the "customs territory of the community" is defined in article 3 of the code, here:
http://eur-lex.europa.eu/LexUriServ/...0070101:EN:PDF

There it says that the customs territory includes, amongst other things:

the territory of the United Kingdom of Great Britain and Northern Ireland and of the Channel Islands and the Isle of Man,

So here you have it.

Interestingly, according to this document Heligoland is not part of the customs territory. So theorethically one would be able to reset the VAT clock there. But I find no information there about people who actually did this.

[K_V_B]

Originally Posted by Kenomac

1. Point of sale needs to be in a VAT free economic zone such as Guernsey, Jersey, Gibraltar (good luck with Sark since they don't have a port) and the island is surrounded by cliffs and 10 meter tides) or outside the EU in order to avoid the point of sale (time of sale) VAT due.

The point of sale does not have to be in a VAT free zone to get a VAT refund though.
But you need a merchant that cooperates. (If he doesn't, take your business elsewhere). You need to fill out some forms. Then when you leave you need to clear customs, and have them stamp those forms. Customs will check the the merchandis is on board. Then you can reclaim VAT, either directly from the original seller, or via an agency.
In Switzerland people living near the border do this all the time. Get VAT refunds is a popular pass time here

[Alawai]

Originally Posted by Kenomac

Well.... I can only speak for my UK, Spanish and Italian purchasing experiences. Whether for the boat or items which were purchased for the boat, all required the payment of VAT unless I took delivery of the items outside the VAT zone. And there was virtually no way possible for us to be refunded the VAT on items such as an including our new anchor, turbo, engine work done the first year, boat storage.... Basically everything.

If its purchased within the VAT zone, you will pay VAT... purchased outside the VAT zone, no payment of VAT.

Why the BOATS are cheaper in EU, there is less gauging on the boat prices.
Remember to become the boat dealer you do not need any special qualifications!


Someone is asking a very proper question regarding purchase of a boat in Europe.
The issue is very simple, and people shall only respod if they know the answer, otherwise other should ask the question not confuse others.
Never pay VAT taxes unless the law forces you. But those money would be gone as you can never recover them!

First question is:

Who can buy the boat excluding VAT (VAT not paid)?
Any one disregarding his nationality or citizenship who domicile outside European Union can buy VAT free boat under the condition that he export this boat within 90 days out of European Union.
This condition can be extended to maximum of continuous EU yacht stay for max of 180 days.


Than you have to have a stamp which prove that the boat left the European Union. Than after "24" hours you can reenter EU and be over there for another 180 days.


Lowest VAT in EU countries is Malta (5.4%) and still Gibraltar were you can flag your "corporate" boat. Gibraltar is going to join Britain!
VAT in Poland is 9.4%.
Otherwise VAT in EU is about 25%.

Those are the conditions for the boat.
Different condition applies to the crew.


Best places to "flag" your boat in EU now is Poland and Sweden.


Best places to "flag" your boat in US is Delaware (no taxes, and or with US Coast Guard.


Disregarding if boat is VAT free, if you are a citizen of any EU country there is no any restrictions on you. However if you are citizen of NON EU country you are entitled to only 90 days continuous stay, and you must exit EU, than you can reenter EU.


There are also different rules for yachts purchased in Great Britain since England "Brexit".
I am not very familiar with Britain VAT rules so I will refrain myself from the comments!
My situation is a little different since I am US Citizen permanently living in Hawai'i, but I do also maintain the EU citizenship. So I do not need to exit every 90 day EU!

[wholybee]

Originally Posted by Alawai

Best places to "flag" your boat in US is Delaware (no taxes, and or with US Coast Guard.

You don't "flag" your boat in a particular state, but in the United States. The home port location on the document has no connection to taxes at all.

State and county property taxes are due in the state and county of primary use. This is sometimes by physical visits by the tax accessor or by marinas reporting the boats currently there to the accessor. If you get caught this way, you will need to not only pay the tax, but probably late fees, so it is better to know the state law (varies by state/county) and report your presence before you are accessed. This also gives you an opportunity to state the yachts value instead of the accessor assigning it.

You can't avoid one states tax by registering or flagging it in another. Because the tax due is related to the state of primary use, if your US flagged boat never touches US soil, there is no state or county tax.

Example. I am in/from California, and my home port on my document is in Sonoma County, but my boat is physically kept in Marin County. I pay taxes to Marin County. When I left for my circumnavigation, I notified the county, and paid no taxes while I was gone. When I arrived in Virgina and stayed there for a year during covid, taxes became due there, even though my home port remained in California. Now that I have arrived back in California, I have notified the county, and taxes are again due in Marin.