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Old 12-03-2013, 15:35   #1
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Boat Buying. VAT, Import, Export Current condition *UPDATE"

This is an extended Thread with some more info I now have..
(I am listing again as I got a lot of information of what is required but am also looking for solutions as I like the boat a lot so thanks to all those form before and with the extra info can you advise any more?)

So from the top:

I am trying to buy a boat in Portugal.

Seller = UK Citizen
Buyer = UK Citizen
Manufacture = 2001 (outside the EU I think in Canada now), not found manufacturer yet..

Yacht arrived in Portugal in 2006 (Paid marina fees since then included)
Last 2.5 Years: Boat on hard for refurbishing
Reason for sale: Owner is ill, "marina fees need paid or marina gets boat" which owner does not want.

The problem I understand now: No CE Certificate / RCD and VAT or Import duty never paid, but he has never been asked to pay it either.

My interest: I am able to buy the boat off him for less than the value needs quite a bit of work, the boat is not currently seaworthy so there is no chance of sailing it out of the EU for another 6 month to a year while it is repaired and refurbished.

Registration: Class 3 on the UK Small ships register.

Can anyone advise on what would be the best thing to do with the boat? (except for run as you all keep saying..).... I DO REALLY LIKE THE BOAT, challenge and the location.

Are any of the following possible or what are your views on them? im just looking at ways to make it all work.

1, As the boat is not CE registered can the boat even legally be sold in the EU? if not what can you advise? CE registering can be very expensive.
2, If we made a "Bill of sale" within the UK would VAT then be due in the UK only? (And what if we never went into UK waters?, could this also work if I made a Bill of sale in another EU country say Bulgaria? (I mention Bulgaria as I have a property there)..
3, As the boat is not CE registered am I correct in thinking a UK citizen should not be allowed to sell it in Europe, and if that's right any advice?
4, I would consider sailing it out of the EU... but as I cant at present due to its condition, What is the score if you can not get it out of EU waters within VAT time limits?
5, What VAT would I be liable on? The value of the yacht when it arrived in 2008? or the value of the yacht now when I buy it? there could be quite a difference.
6, Is there anyway I can get time to finish the boat since I am a new owner?.
7, Does anyone have any experience of owners falling ill or dying and leaving there non EU boat in EU waters? what happens with them, how would you sell them with no CE present??. Could it be sold in Auction legally?

Any advice? any questions also fire away.
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Old 12-03-2013, 18:15   #2
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In reality , if the boat was brought into Portugal and has remained there, then the VAT is due there. ( as its the country of destination. )

However there are some opportunities to regularise this situation,

Firstly you could have a chat with Revenue in the UK , ( on a non specific basis ) and seek to regularise the VAT. You would reach an agreed value with them and pay the vat. In general they might be prepared to overlook the fines or penalties. They would issue a vat receipt and that would prevent argument in Portugal. If at all possible avoid entangling yourself with vat and the Portuguese authorities. Obviously the amount you pay would be deducted from the sale. Vat will be paid on the current value of the boat , ( if they are sticky, on an agreed settlement figure) which given your description , I presume is fairly low. Remember the current owner should really do the negotiations or if he's ill you could act in his stead, just don't say your the buyer !!!

For example I once argued with the customs in Palma , where the Spanish authorities accepted a written down valuation on a proposed 250 K boat sale , where the agent accepted a depreciated value of 60k and hence vat of 16 , it can be done.

In general a voluntary disclosure will be looked on sympathetically. You should have the vat determination done before any sale is complete. Then in Portugal you would have a UK flagged boat with a UK VAT receipt and its unlikely any of the authorities there will look at anything when you take the boat out of Portugal ,( you are not required to go through any export process or clearance anyway ) once removed from Portugal, there is no further concern.

I presume the boat is and will remain UK flagged

CE is a little more tricky, if the boat was imported after 1994 , then it must be CE marked and therefor comply with the RCD. You have several choices. You could simply go for a Category D marking and self certify. ( Requires a time investment ) This may compromise any future sale . It will not effect insurance as currently insurance companies don't use CE category as a requirement. Or you could seek a post construction CE certification to the appropriate Category. This will require a professional RCD " notified body " , like say CEProof on the hamble , costs can vary

If you are going through a very major overall , for example engine upgrade, major interior , systems or external modifications , then technically anyway you could need re certification anyway , even though no one bothers on boats already CE marked.

As a EU tax resident you have no vat grace period

Dave .
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Old 12-03-2013, 18:39   #3
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Re: Boat Buying. VAT, Import, Export Current condition *UPDATE"

I think the answer is between what you should do and what you could do.

You sound like you have a good handle on what you should do, or at least to be able to Google up the answers - which will involve writing some cheques........

What you could do is a seperate matter and likely centering around keeping fingers crossed........
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Old 12-03-2013, 18:46   #4
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Re: Boat Buying. VAT, Import, Export Current condition *UPDATE"

Quote:
Originally Posted by David_Old_Jersey View Post
I think the answer is between what you should do and what you could do.

You sound like you have a good handle on what you should do, or at least to be able to Google up the answers - which will involve writing some cheques........

What you could do is a seperate matter and likely centering around keeping fingers crossed........
it is better to pay tax on a wreck with a very low valuation,than a year later when they catch you on a yacht that looks like a million dollars.

either way keep any recipts that show you have paid vat for any work and materials on the boat .
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Old 12-03-2013, 18:59   #5
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Re: Boat Buying. VAT, Import, Export Current condition *UPDATE"

Quote:
Originally Posted by atoll View Post
it is better to pay tax on a wreck with a very low valuation,than a year later when they catch you on a yacht that looks like a million dollars.

either way keep any recipts that show you have paid vat for any work and materials on the boat .
Agree I think "goboatingnow" may have given me the lead I was after will let you know how I get on. Any more suggestions feel free to throw them in. Thanks all.
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Old 12-03-2013, 19:22   #6
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Its not specifically illegal to sell a non CE marked boat, its is illegal to use it, and the liability remains with original importer.

In practice , if you didn't intend to sell the boat again you could complete the sale and sort out the CE at some future date. There is no enforcement or oversight and there's quite a few boats sailing around the EU with fake CE builders plates!!! . The liability remains with the importer in all cases.

Of course the sale price should reflect any risks you take

Dave.
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Old 13-03-2013, 04:52   #7
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Re: Boat Buying. VAT, Import, Export Current condition *UPDATE"

Quote:
Originally Posted by goboatingnow View Post
Its not specifically illegal to sell a non CE marked boat, its is illegal to use it, and the liability remains with original importer.
and perhaps particularly useful if the importer (vendor?) is ill to the point of getting dead ......although that wouldn't cure the boat not being CE would likely mean you could address the matter at the time someone raised it - with a clean slate.

Quote:
Of course the sale price should reflect any risks you take

Dave.
+1

I would price it as both a new import (with no tax and no RCD / CE paid for) and for the fact is has been unused and ashore for 2 1/2 years owned by someone who was flat broke - as that won't have improved the boat .

and another slice for your taking on the risk (of large bills arriving / getting bottom slapped by officialdom) - aka someone else's problems!

the fact that your approach to writing any large cheques (unforced!) may differ from "should" is a different matter and nothing to do with the Vendor (and the price he gets).........
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Old 13-03-2013, 06:40   #8
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Re: Boat Buying. VAT, Import, Export Current condition *UPDATE"

Quote:
Originally Posted by goboatingnow View Post
In reality , if the boat was brought into Portugal and has remained there, then the VAT is due there. ( as its the country of destination. )

However there are some opportunities to regularise this situation,

Firstly you could have a chat with Revenue in the UK , ( on a non specific basis ) and seek to regularise the VAT. You would reach an agreed value with them and pay the vat. In general they might be prepared to overlook the fines or penalties. They would issue a vat receipt and that would prevent argument in Portugal. If at all possible avoid entangling yourself with vat and the Portuguese authorities. Obviously the amount you pay would be deducted from the sale. Vat will be paid on the current value of the boat , ( if they are sticky, on an agreed settlement figure) which given your description , I presume is fairly low. Remember the current owner should really do the negotiations or if he's ill you could act in his stead, just don't say your the buyer !!!

For example I once argued with the customs in Palma , where the Spanish authorities accepted a written down valuation on a proposed 250 K boat sale , where the agent accepted a depreciated value of 60k and hence vat of 16 , it can be done.

In general a voluntary disclosure will be looked on sympathetically. You should have the vat determination done before any sale is complete. Then in Portugal you would have a UK flagged boat with a UK VAT receipt and its unlikely any of the authorities there will look at anything when you take the boat out of Portugal ,( you are not required to go through any export process or clearance anyway ) once removed from Portugal, there is no further concern.

I presume the boat is and will remain UK flagged

CE is a little more tricky, if the boat was imported after 1994 , then it must be CE marked and therefor comply with the RCD. You have several choices. You could simply go for a Category D marking and self certify. ( Requires a time investment ) This may compromise any future sale . It will not effect insurance as currently insurance companies don't use CE category as a requirement. Or you could seek a post construction CE certification to the appropriate Category. This will require a professional RCD " notified body " , like say CEProof on the hamble , costs can vary

If you are going through a very major overall , for example engine upgrade, major interior , systems or external modifications , then technically anyway you could need re certification anyway , even though no one bothers on boats already CE marked.

As a EU tax resident you have no vat grace period

Dave .
Sadly UK Customs & Excise are not interested and would not make any deal even if the transaction went through in the UK as the boat is not in UK waters. All they have done is refer me to Portuguese Customs & Excise and point out that if the boat is not asked for VAT status on leaving Portugal then it would be liable at the next port of entry. :-( any other suggestions?
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Old 13-03-2013, 07:32   #9
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Re: Boat Buying. VAT, Import, Export Current condition *UPDATE"

Quote:
Originally Posted by zooplax View Post
Sadly UK Customs & Excise are not interested and would not make any deal even if the transaction went through in the UK as the boat is not in UK waters. All they have done is refer me to Portuguese Customs & Excise and point out that if the boat is not asked for VAT status on leaving Portugal then it would be liable at the next port of entry. :-( any other suggestions?
become a non-eu resident,or pay the tax in portugal or walk awayl
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Old 22-11-2013, 05:08   #10
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Re: Boat Buying. VAT, Import, Export Current condition *UPDATE"

i found this on noonsite.com , some new roles for vat???

Spain: For VAT purposes, the country does not include the Canary Islands, Ceuta and Melilla.

It has also been reported (October 2013) that if choosing to import your boat into Europe in Spain, the valuation of the boat is based on the "blue book" price (or if your boat is not listed, then listed sale price of your model boat or similar found on the internet).The procedure is then to take 10% of that price and charge VAT/IVA on that. So for example, if your boat is valued at $50,000 then you pay VAT/IVA on $5,000.
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Old 22-11-2013, 07:04   #11
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Re: Boat Buying. VAT, Import, Export Current condition *UPDATE"

As an outsider with no emotion involved, my suggestion is walk away now unless he is simply giving you the boat (maybe not even then).

Sounds like you are buying yourself a series of headaches when for a small amount more, you could own a boat free and clear of the hassle. Reminds me a lot of the guys who refinished a bathroom so now they are ready to take on a derilick boat project because "how much harder can it be?"
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