Taxes for Buying Second Hand , VAT Not Paid , Boat in Martinique

[vercoe5]

Hi,
If you are not an EU citizen and you buy a boat VAT not paid in a EU country, then what happens. Who is responsible for the VAT??

[goboatingnow]

Originally Posted by vercoe5

Hi,
If you are not an EU citizen and you buy a boat VAT not paid in a EU country, then what happens. Who is responsible for the VAT??

Nothing , you technically have to export it and come back in to claim the months relief. The sales transaction must be a party outside of the Eu.

Dave

[geoleo]

Seems to me , as a Ameican citizen , looking to buy a used catamaran, that I should avoid all "Vat Paid" boats as their owners-consciously or unconsciuosly-will always try to recover some of the VAT tax they paid when they accquired the boat. comments please--

[David_Old_Jersey]

Originally Posted by georgetheleo

Seems to me , as a Ameican citizen , looking to buy a used catamaran, that I should avoid all "Vat Paid" boats as their owners-consciously or unconsciuosly-will always try to recover some of the VAT tax they paid when they accquired the boat. comments please--

I think broadly that would be true (presuming that you are not an EU Resident - in addition to being a US Citizen).

A boat (as anything) can have a different value to different people - in this case a VAT paid boat is worth more to a European (where the principle market is for a European based boat) than it is to you.

But accepting that will likely involve less choice of vessels based within Europe, especially for those that are older than the coming out of Charter period.

and possible that the difference in prices not enough to pay the actual VAT - so if boat to be based inside the EU probably better off buying already VAT Paid.....but if that not the case I would certainly be looking for a VAT Free vessel - unless one could luck upon a steal .

[Johnny Cruiser]

Originally Posted by David_Old_Jersey

I think broadly that would be true (presuming that you are not an EU Resident - in addition to being a US Citizen).

A boat (as anything) can have a different value to different people - in this case a VAT paid boat is worth more to a European (where the principle market is for a European based boat) than it is to you.

But accepting that will likely involve less choice of vessels based within Europe, especially for those that are older than the coming out of Charter period.

and possible that the difference in prices not enough to pay the actual VAT - so if boat to be based inside the EU probably better off buying already VAT Paid.....but if that not the case I would certainly be looking for a VAT Free vessel - unless one could luck upon a steal .

1) Thank you DOJ for the much improved Avatar. Have been to Somali 3X in the last 18 months and your Avatar was scarier than those trips.

2) We just closed on a large mono in Spain on 2/3/2012. The Bank who had repo'd the boat and was an EU VAT paid purchase boat furnished us a VAT Tax Exempt Form/Letter & number @ closing. The night before closing as we were working on the boat they sent a painter over who changed the home port and country on the rear transom. He also gave us a check for $300 USD to have the name changed later if we wanted and the painter also brought along a new Cayman Islands Flag for the boat. If I had known wouldn't have ordered one for delivery the next day @ closing. Was surprised that the bank had the home port and country & flag changed to where we were registering the boat in the Caymans. Perhaps because we both had dual citizenship in the US and 2 different EU countries and I am also a resident of the Cayman Islands. We purchased the boat through a Cayman Corp which is quite easy to do and though the Caymans do have not property taxes but a 20% VAT boats are EXEMPT from the VAT. Hence it is a legal tax haven for many.
Since checking out & leaving offshore Spain after closing on 2/3/2012 we stopped @ France, Monaco, Italy, Southern Spain, Gibraltar, and Portugal which we just left enroute to the Canaries. Customs was 10 mins or less except in Gibraltar & Portugal. Gibraltar actually came out to look at the transom all the while telling us it was a fineable offense to be sailing with the wrong flag, home port and country id'd on your boat. Shut his mouth when he saw all was correct. Score one for the bank! Portugal took forever going over the VAT paperwork (80 min) and also asked about the transom but when I showed him the cell phone pic of the transom we were cleared. The only reason we had stopped in Portugal was to look at my future father-in-laws new Villa on the ocean which he bought for tax reasons in Portugal though he is a French citizen. He never mentioned it till he meet us in Gibraltar and saw our new boat though we have been in Europe and many a night @ his home for the last 2 1/2 months.
Seems best to have good legal council when dealing across international boundaries IMHO. The bank knew what they where doing when they changed the flag, home port & country to avoid problems but have never seen or heard of this being an issue reading the forum. (but admit have not read all the posts! LOL!)
Called the bank Friday after Gibraltar incident and the bank president told me he had heard that petty enforcement leading to large fines for large boats was a new problem that they were hearing about with/due to the economic downturn and govt budgets. He had heard that the agent writing the fine was getting 10% as a "finders fee" but he had no hard or written proof but that is why the bank paid to change the flag, home port, & country rather then have a potential problem with a new cash purchaser.

DOJ chiquita is looking good as your new avatar! KEEP UP THE SOMETIMES USEFUL & HUMOROUS POSTS.


John & Carol
(living the dream on our new boat)

[goboatingnow]

Sorry what's the purpose of a VAT tax exemption letter on a yacht that was already VAT paid ? It's a second hand boat vat isn't applicable.

Dave

[DJBrookster]

Originally Posted by goboatingnow

Sorry what's the purpose of a VAT tax exemption letter on a yacht that was already VAT paid ? It's a second hand boat vat isn't applicable.

Dave

It's your proof that it is indeed VAT paid.

[Johnny Cruiser]

Originally Posted by goboatingnow

Sorry what's the purpose of a VAT tax exemption letter on a yacht that was already VAT paid ? It's a second hand boat vat isn't applicable.

Dave

Dave,

Do not believe VAT was ever paid. Home port & original owner's country was non EU citizen. Boat was repo'd and moved to Spain. Believe Bank was offering boat VAT paid to attract more potential buyers and the clock was running down as boat was 16 months in EU waters when we came along. Took month to work out details and survey and divide costs per pre arranged agreement. Another month and the bank would have owed over million in VAT by my calc. Could be wrong but have nothing in any of this paperwork or the previous owners which was left on board that shows where VAT of any kind was paid. Was still flying the other country's flag and had their homeport and name on it till night before we closed. Boat also took lightning hit on it's 135 ft mast after repo and both masts were changed from aluminum to carbon fibre with the 60k he (orig owner-bank worked with him in beginning after repo but divorce and wife proxied him out of his/their co) got from the UPS and comm gear surge suppressors which were both toast but no other gear downstream of them was hurt. All worked and passed the survey with me and the crew rechecking it all out for over a week. Was amazed that it all worked and that they actually paid not the marine insurance company that had spec'd them. Boat had some lightning protection installed. Got nothing to show VAT ever paid to EU but bank was very careful to show my Cayman's address and tel # on all paperwork. Bank accepted my detailed expense sharing schedule and my 40% of asking price offer without any hassle or counter offer. Believe my Cayman address and savings of 18% VAT was a factor in this decision on their part along with an all cash offer. Would have went to 50% but no more as did not want boat this large but she was very beautiful and has fantastic woodwork / craftsmanship in her steel hull. This is a biz purhcase as I teach 3 at sea seminars a yr only from now on they will be on my own boat. Sorry Royal Caribean etc. LOL! NOT
My Admiral is dreading Tues when she has to turn control of the boat over to our crew as the boat leaves for Florida USA then home to the Caymans. We will get back to looking for a catamaran in the Med & Baltic for us to circumnaviate over 3 yrs in.

Thanks Atoll for the tip where we found the boat. Got a bottle of Johnnie Walker Blue for you and we should be back in England in 5/6 weeks.

Dave have read some of your messages/replies on VAT and found them helpful as I was educating myself on this issue. IMHO the Bank was using "VAT paid" as part of the sale deal to try and lure more buyers for the boat but can find no record of it ever having been paid to anyone. Perhaps I should have more carefully worded my prev post re this and the full explanation. Sorry.
John

[Johnny Cruiser]

Originally Posted by DJBrookster

It's your proof that it is indeed VAT paid.

Good point Dave but I have no other proof that is was ever paid though I am a non EU citizen (USA) and boat is registered in the Cayman Islands where there is no VAT for boats.
John

[David_Old_Jersey]

Originally Posted by Johnny Cruiser

DOJ chiquita is looking good as your new avatar! KEEP UP THE SOMETIMES USEFUL & HUMOROUS POSTS.


John & Carol
(living the dream on our new boat)

I guess that means I need to work on the "Sometimes Useful" end of things .

[atoll]

Originally Posted by Johnny Cruiser

Thanks Atoll for the tip where we found the boat. Got a bottle of Johnnie Walker Blue for you and we should be back in England in 5/6 weeks.

John

no worries!sounds like you got a good deal!

[Johnny Cruiser]

Originally Posted by David_Old_Jersey

I guess that means I need to work on the "Sometimes Useful" end of things .

David OJ,
Was meant solely as a "compliment". Sometimes we don not need the good info presentd here at this time. For example info on how to trim your sails correctly but if you are currently in a power motor only catamaran it is sometimes not useful to you at this moment though sometimes useful to others. Appreciate your posts, the info provided and your sense of "humour".
Thanks again,
John & Carol

[Fearnow]

I am a US citizen buying a boat in Martinique, also. I will keep the boat in the Caribbean and register it US. After a couple of years, I plan to sell it. Any taxes? The add gave the price and followed with "before taxes"

[Jeannius]

This is because the boat has been exported from France under a tax exempt or tax reduction scheme. If the boat is sold to a European in Martinique (effectively part of Europe) then they may need to pay tax.

You as a US citizen shouldn't need to pay tax. In the unlikely event that they say you need to pay French TVA, tell them to take the boat to St Lucia and you'll do the deal there.

[Kita]

I hate to sound to dumb here but, what is VAT? How do they come up with the amount? Kinda like sales tax? Or reg fees? Who gets it? Seller pays? Yeah I know, rookies, I am working on selling houses & getting a catamaran & I just assumed that it is just something I had to pay but what is it really?