Boat Registration in UK

[goboatingnow]

David

There is no proof of VAT, what you have ( and I had as well) was a unique document that state grandfarthered in pre VAT boats ( A one time experience). You possiblly get VAT questions because of a unique perspective. VAT is a transaction charge not an asset status, You can easily have a so called "proof of VAT", say a previous sales invoice, but that does not prove anything, you may have bought the boat outside the EU ( whereas the boat was VA Paid). You are still due for VAT.

The reason most people say VAT " dont worry" , is that exceoting those boats from known VAT free areas which the french hate anyway. VAT for an EU boat is only the preserve of the original country. Once you can show that the boat is in a EU country say by way of registration, then foreign VAT is NEVER the question. It is not and isnot under say french VAT durisdiction. VAT " inspections" abroad are an urban myth. They tend to only happen to people in very specific circumstances, such as boats from known VAT free areas ( often owned by EU citizens and hence owned illegaly brought into france ona holiday). EU reged boats are alomots never VAt queried unless something is wrong with the paperwork of registration or the owner seems dodgy,

Again the main reason "VAT dont worry" , is that there is NO PROOF. In my case I always look for a VAT indemnity, rather then so called proof. That way if ever I have a problem I have a strong legal recourse to recovering the tax from the previous owner. You and other s go on about VAT proof, but again there is no real proof and cuatoms do not issue determiunations on specific assts. If you undertsand how VAT is accounted and paid for by business you would understand why VAT proof is not the issue.

[MoonlightShadow]

Phew indeed. But some points lack a bit of credibility. I would suggest GoBoatingNow, that some peoples experiences are different from yours maybe.

The French have a little purge on VAT every now and then. Got the T shirt. Been inspected.

I would argue with some of your other points, but can't be arsed.

[dfuller303]

Ok I have a different twist on the same topic.

I am an Australian but RESIDENT in the UK on a full Visa. I am about to buy a European privelige cat currently based in the Carribean that is advertised VAT paid. Im advised the original owner a Belgium national

I want to have a season or two in the carribean and then bring her to the Med.

This is what the broker advised-----

she is already VAT paid, so to my current understanding the VAT remains with the boat if she remains in an EU flag. What we will want to confirm is if we need to close in an EU location, such as Martinique, to be certain we have a record that satisifies EU VAT police. If we do it right, that would mean she can come back and sail in EU without ever having to clear out, etc. Also, if you are only an OZ passport holder, you may have to form an EU corp to take title and hold onto VAT, etc.

Id love to hear about the Closing the sale in the EU. Martinique?

I guess If I got all the sale documents and made the transaction in Matinique I have the best coverage?

thanks all

[Barra]

Damn this is such a confusing topic! What was said previously re vat and registration being separate things makes logical sense but then goboating chimes in and says its a transaction based tax and as such a single boat could be taxed over and over if for example changing a flag triggers a transaction.

I m also an Aussie and am currently in the process of buying a French registered vat paid cat in France. One of two things will happen depending on who is right here and no one from brokers to government agencies to this forum seems to know which way it will go

Ie either me buying the French boat and then registering it in australia will trigger a transaction and the boat will be exported for tax purposes at that point ( the boat will physically stay in the med for some time) and it then becomes a foreign boat that has the 18 month exemption before having to be imported or if bought by a European would have to pay vat again

Or

I buy the boat that has already had tax paid and just changing the flag means only that for tax. For tax purposes the Australian flagged boat can stay indefinitely as it does not need to be imported after 18 months ( since it was never exported by the simple changing of the flag). If I then sell the boat at a later date in Europe the boat remains tax paid and the new owner has no new tax bill.

It all seems to hinge on whether changing a boats flag results in the boat being exported for vat purposes it seems to me. Can anyone tell me if that is the case? No one in France can that I have asked anyway

Basically I need to know pretty swiftly if I should buy the boat in a European company name I suppose and the fly the tricolor or simply buy the boat in my name and register in Australia and sail the med for as long as I choose without having to worry about importing the boat after 18 months?

Thanks

[goboatingnow]

barra ,

Again as I've stated till I'm blue in the face. The flag state of the vessel is irrelevant when it comes to determining VAT. Merely changing the flag state do not export the boat.

If you buy the boat VAT paid, but you are not a EU tax resident. There's a couple of things to watch out for

(a) technically if the sale takes place with the papers addressed to you in OZ, then that is the "supply point". Hence when you sail out of EU waters the boat is "exported " and technically if you sell it to an EU citizen they could be liable for VAT.

(b) in practice, (a) doesn't happen. Once you show a purchaser that you have evidence of VAT being paid that's enough for a EU person, again however if a future sale process takes place outside the EU, the purchaser might get stuck for VAT, this is the unfortunate difference between the letter of VAT law and what actually happens in a local customs office.

(c) if you leave it registered in a EU state ( though I would advise caution if wrapping it up in a company as you can fall foul of benefit in kind rules , and corporate VAT law) and it's VAT paid, then the advantage to any customs authority is that it " looks" legitimate and unlikely to raise suspicions and hence will not be subject to the 18 month rule restrictions even if you inadvertently sailed out of EU waters. ( you see you can't invoke the Returned Goods Relief, as you aren't a tax resident, which is why this scenario doesnt affect residents)


So the answer is "it depends".

If you register if in OZ and your sailing on a OZ passport, the boat will be treated as foreign and hence the 18 month concession will apply. To convince anyone that it doesn't apply , you will have the fact that VAT was once paid and you will claim she's never left the EU. If a dispute arrises, it will be down to the argument was she ever "exported" . In most cases evidence of VAT paid is enough to make customs go away.

I would caution about the wrapped up in EU company thing. These things smell to custom officials like a tax dodge. Best register in your home country and avail of the 18 months and anyway that can be easily extended. When it comes to a sale if the buyer is EU, then you'll have the VAT status paperwork to convince him VAT isn't due. ( that's usually calms most purchaser)

VAT law is enormously complex and mind bogglingly Geordian, the courts all over the Eu are kept busy deciphering it.

Dave

[goboatingnow]

Originally Posted by dfuller303

Ok I have a different twist on the same topic.

I am an Australian but RESIDENT in the UK on a full Visa. I am about to buy a European privelige cat currently based in the Carribean that is advertised VAT paid. Im advised the original owner a Belgium national

I want to have a season or two in the carribean and then bring her to the Med.

This is what the broker advised-----

she is already VAT paid, so to my current understanding the VAT remains with the boat if she remains in an EU flag. What we will want to confirm is if we need to close in an EU location, such as Martinique, to be certain we have a record that satisifies EU VAT police. If we do it right, that would mean she can come back and sail in EU without ever having to clear out, etc. Also, if you are only an OZ passport holder, you may have to form an EU corp to take title and hold onto VAT, etc.

Id love to hear about the Closing the sale in the EU. Martinique?

I guess If I got all the sale documents and made the transaction in Matinique I have the best coverage?

thanks all

just be aware that the island is a VAT free area.

Your broker is wrong. The flag state is irrelevant when it comes to determining VAT status. It is the status of the "beneficial owner" that counts. Vat is a transaction tax, being accounted for on every sale,export, purchase or import.

Note to technically be correct you would have to established in Martinique to qualify the transaction taking place there. Ie the papers in your name would have to have a EU address or a Martinque address.

But as you are a UK resident ( and I presume a tax resident) you are worrying incorrectly. Simply ensure your UK address is used to purchase the boat. She's VAT paid and in the EU ( Martinique is specifically part of the EU).

If you sail her around the Caribbean, It's technically then exported. But as a EU tax resident you can avail of Returned Goods Relief this allows EU residents the freedom to export an reimport goods without becoming liable for VAT. ( as long as not sold abroad ) VAT is a transaction tax and must be accounted for on sale, export, import and purchase.

Don't go near the corporate entity. Wrapping it in a EU company will bring the need for annual returns, VAT , VIES and Intrastat returns and a host of other corporate governance issues. If the boat is in the millions and you have a host of accountant , lawyers and what not employed in you megacorp, then it's perfectly doable.

If your not a EU tax resident then of course, now it becomes complex. It is legally very difficult outside of corporate ownership to retain the VAT status. , but see my post to Barra , the fact she was VAT paid means that may assuage a future EU purchaser.

Dave

[savoir]

Just register in UK in your own name and be done with it. The boat can travel EU tax free as long as you keep UK registration. Your personal passport might run foul of the Schengen rules (not relevant in the Caribbean) so you should be aware of your status there.

[goboatingnow]

Originally Posted by savoir

Just register in UK in your own name and be done with it. The boat can travel EU tax free as long as you keep UK registration. Your personal passport might run foul of the Schengen rules (not relevant in the Caribbean) so you should be aware of your status there.

Just a correction. The key thing isn't UK registration. It's his tax residency. Once he looses his tax residency , taking the boat outside the EU IS exporting it, Irrespective of its flag status. ( of course retaining its uk reg after such export makes it difficult to prove such export , but that's a different thing. )

The problem is there are two issues at play, (a) what do I do to keep the VAT man at bay ( perhaps more correctly how can i pass a cursory customs inspection) or (b) what's the correct legal position. The two are rarely the same when it comes to boats.

Dave

[MacG]

All scenario' s are thinkable and possible - depending on how the documents of the boat are. If you have the original bill of sale which is clearly stating that the VAT has been paid any future owner can wave this bill of sale in front of customs and there is very little they can do to contest it. If you buy this boat through a broker, let him attest on the bill of sale that the VAT has been paid. Who the owner is has nobody to interest. The only issue is that you can show an official document that VAT has been paid.

edit: keep this document like gold. And keep the boat 'officially' in the EU.

[David_Old_Jersey]

Originally Posted by Barra

Or

For tax purposes the Australian flagged boat can stay indefinitely as it does not need to be imported after 18 months ( since it was never exported by the simple changing of the flag). If I then sell the boat at a later date in Europe the boat remains tax paid and the new owner has no new tax bill.

Yes.



On the presumptions:-

• that you are not an EU Resident.
• that the boat did have VAT paid on it.
• that the transaction is effected in the EU (and boat is also within the EU).

In practice, I would be happier having plenty of paperwork to support that position (even if much of it is not (and can't be) 100% definative):-

• For being a Non EU Citizen, evidence to show you are an Aussie Resident - being tax resident would also be nice to show. Any aeroplane ticket stubs to Oz (showing that you do return home) would be good as well.
• For the boat having had VAT paid on it the original sales invoice saying that would be nice (accepting that it is possible that the VAT could have been later reclaimed - but IMO some evidence that it had originally been paid would be better than none!).
• The Bills of Sale (and ideally also the sales Agreements and any old registration documents - plus loads of old bills for maintanence / repairs / moorings) from Builder through the entire ownership chain to you (ideally showing that the boat has always been purchased and solely kept within EU Waters and owned only by EU residents - not to say that EU only boat and owner is required - but keeps the story / boat ownership history simple....with the only "odd" bit being you ).
• In addition to the sale Agreement, I would also keep receipts for the boat being moored within the EU at the time of your purchase.
• Might also want to maintain the Ships Logbook (we don't all do that ), particularly on where on the boat was - will also show when you were aboard and when not (by the gaps in dates).
• I would also keep all receipts / invoices for moorings, parts and work done within the EU (good idea to keep anyway, for if you ever sell) to demonstrate that you / the boat has been within the EU - spending money .
• Have a story ready for why you (as an Aussie) bought a boat in the EU and why it has stayed in the EU for a long time, especially the bit about you using it only for extended holidays. (I have to pay for it! - therefore I need to work, and can only do that in Australia (and wife don't want to move to Europe!)....and that it comes down to the simple fact that Australia is too far away to visit Europe by boat for each season! and that you hope to one day sail her back to Oz (hence her being Oz registered - plus simply because you are an Aussie! - IMO flying a clearly foreign flag on the stern a good indication that you are not trying to hide), but might instead simply want to sell her within the EU - possibly for another EU (VAT paid!) boat). Might also want to throw in how much you love Europe and especially the Country of the Customs officer .
• The anal amongst us (and those with bad memories!) might want to write down in summary form details of the boat ownership history / transaction - possibly also run through Google Translate.

Obviously back in the real world!, some / much of the above may not be available or not as complete as would be ideal - but IMO "every little helps" ..... as one thing to bear in mind is that officialdom likes to be able to verify information themselves (even if they don't actually do that or only the bare minimum to look like they have) - in practice that means they being able to obtain from you names of people (PO's / workmen) and firms (Builders / Dealers / Brokers / Marinas / Suppliers) to check out at least parts of your story......give 'em enough info from your paperwork to play with makes their lives easier.

GBN makes a good point (amogst all his others!) about the Legal side being one thing and translating that into practice another.

FWIW (a story from last year), fella from Jersey (outside the EU and well known for tax dodgering ) was up the French Canals for an extended visit (multiple months) - Customs paid him a visit (they are known to operate well inland!).....interested in both how long he and the boat had been in France - but as soon as he mentioned that the boat was French Built (and they realised that), and was bought in France and was moored their permanently (when not being used) they were a) very happy (cash coming into France) and b) didn't bother inspecting his paperwork.........obviously the next Customs visit may not go that pleasantly, but I just mention it to show that approaches from Officialdom can and do vary. I would also say that not to assume that the first contact with the Customs is the first time they have seen you / the boat.....my bet with this example is that they were already aware that the boat had been in France for an extended period - with a Jersey Flag on the back.

[Barra]

Thanks for the quick responses gents!

I have bill of sale stating vat paid and original invoice for boat bought new stating same. I will make sure the contract of sale states executed in France ( which it will be). Broker has even dug up a few years of maintenance bills on the boat in question so I'm as we'll armed as I can be I suppose.

Still be a slightly nervous first inspection though!

Thanks
Barra

[David_Old_Jersey]

Originally Posted by Barra

Thanks for the quick responses gents!

I have bill of sale stating vat paid and original invoice for boat bought new stating same. I will make sure the contract of sale states executed in France ( which it will be). Broker has even dug up a few years of maintenance bills on the boat in question so I'm as we'll armed as I can be I suppose.

Still be a slightly nervous first inspection though!

Thanks
Barra

Make sure that the Bill of Sale (to you) also clearly states sold as VAT paid - doesn't guarantee that it has, but indicates that you beleived it had been - and proves that the PO (Vendor) lied to you. (and will also be a comfort for the next buyer).....so you at least get a chance of suing him.

IMO not essential, but depending on the figures involved (and how important to you) I would consider getting (and paying for!) some proffesional advice (now that you have a good handle on what the position should be, you won't also be paying for an entire VAT education ) - what you want from them is something as simple and specific as possible (not a long ramble full of ifs and buts) that you could include within the boat paperwork (for benefit of Customs and any future buyer) - plus if the advice is clearly wrong gives you some chance of suing someone (especially if they have PII cover) or at least to look like an innocent party - even if you still get the VAT bill.....might also help you sleep a bit better .....but, IMO (worth nadda!) not essential and in this case I personally wouldn't bother.....but that easy for me to say, ain't me gonna get any VAT bill .

[goboatingnow]

Avoid so called professional advice. Unless the person has serious credentials in boat VAT and is specific to a country in question. Otherwise you get nonsense.

Dave

[MacG]

When customs come aboard they might ask for the ship' s documents. Have them ready and present them in a flash. Original bill of sale, or bill of sale Broker stating clearly that VAT has been paid.
I even keep the original bill of sale of the dinghy and outboard in the folder of my ship' s documents. I have one folder containing all docs: Bill of Sale, Insurance policy, Radio-certificate, contract of dock, ICP etc. etc.

From time to time the issue of the VAT dives up but presently the pathfinders in this part of the world are more interested in your Radio (VHF) certificate. The VAT issue only comes up for shiny new vessels with strange flags. If your boat is French and your homeport is same, don' t change anything. If you present a bill of sale that shows that VAT has been paid, no way out for a customs officer to contest that.
The turbo-booster of all VAT problems is the fact that there is no official pleasure craft registry in a number of EU countries: Holland, Belgium, France I know off.
You may register and get an ICP but there is no obligation to do so in may EU countries. The sale of a boat, f.i. in Holland can happen without any official registration. Only if the boat is officially mortgaged a registration is required.

Customs is only interested in one thing: boat's papers. When this is ok the question of the owner' s nationality is secondary.

[goboatingnow]

Originally Posted by Barra

Thanks for the quick responses gents!

I have bill of sale stating vat paid and original invoice for boat bought new stating same. I will make sure the contract of sale states executed in France ( which it will be). Broker has even dug up a few years of maintenance bills on the boat in question so I'm as we'll armed as I can be I suppose.

Still be a slightly nervous first inspection though!

Thanks
Barra

Don't be VAT inspections are as rare ad hens teeth. Even then once you have supporting documentation your fine.

Remember VAT is primarily an issue for EU tax residents. As a foreigner you ate entitled to 18 months leeway so in effect they will ignore you. The 18 month process is so badly monitored as to be ignored. In effect a foreigner can keep his boat permanently in the EU.

What you are concerned is that any future EU purchaser might get stuck, but in reality that's something you can't control. What you will claim and you have documentary evidence is that the boat was never exported. Ultimately it will be a future buyers decision as to beleive you. After that you don't care.

Dave