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Old 23-02-2015, 11:31   #1
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Foreign registered boat in EU waters

I have a Spanish passport.

I live mostly in the UK where I pay my taxes.

If I am the only owner of a British Virgin Island company (or other low tax country/jurisdiction) whose sole asset is a sailing boat purchased new and registered in that country, can I sail the boat in European waters several months a year? Or do I need to pay VAT?

In particular, I have a second residence in Spain and would like to sail the boat in Spanish waters several months a year.

Thanks.

Antonio
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Old 23-02-2015, 12:02   #2
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Re: Foreign registered boat in EU waters

Not an expert by any means but I would guess that the rules comes by where the boat is registered, not by who is the "owner" of the boat so my two cents are that you are allowed to stay inside EU not more than 6 months in one run.




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Old 23-02-2015, 12:39   #3
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Re: Foreign registered boat in EU waters

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Originally Posted by gixxxer View Post
Not an expert by any means but I would guess that the rules comes by where the boat is registered, not by who is the "owner" of the boat so my two cents are that you are allowed to stay inside EU not more than 6 months in one run.
That is not correct
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Old 23-02-2015, 13:37   #4
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Re: Foreign registered boat in EU waters

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Originally Posted by asalcedo View Post
I have a Spanish passport.
I live mostly in the UK where I pay my taxes.
If I am the only owner of a British Virgin Island company (or other low tax country/jurisdiction) whose sole asset is a sailing boat purchased new and registered in that country, can I sail the boat in European waters several months a year? Or do I need to pay VAT?
In particular, I have a second residence in Spain and would like to sail the boat in Spanish waters several months a year.
Thanks.
Antonio
Every EU country has its own VAT rules, including Temporary Import relief from VAT, but the principles are harmonized.

The general rule is that when the boat goes into the EU it pays VAT.. The exception you could look for is Temporary Import relief, but it is not really meant for you (main user EU resident). See gory detail in the two links below that cover both harmonized European principles and detailed UK rules.

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

https://www.gov.uk/government/public...nd-from-the-uk
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Old 23-02-2015, 14:52   #5
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Re: Foreign registered boat in EU waters

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Originally Posted by svlamorocha View Post
Every EU country has its own VAT rules, including Temporary Import relief from VAT, but the principles are harmonized.

The general rule is that when the boat goes into the EU it pays VAT.. The exception you could look for is Temporary Import relief, but it is not really meant for you (main user EU resident). See gory detail in the two links below that cover both harmonized European principles and detailed UK rules.

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

https://www.gov.uk/government/public...nd-from-the-uk
Thank you very much for the informative reply and links.

It does seem that I would have to pay VAT.
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Old 24-02-2015, 08:13   #6
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Re: Foreign registered boat in EU waters

You MAY however be EMPLOYED as a skipper, in which case your company (owner of the boat) can apply for the temporary import relief.
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Old 24-02-2015, 08:23   #7
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Re: Foreign registered boat in EU waters

SPANISH LAWS FOR BOATS

Personally, I would buy an EU VAt paid vessel.

As as you are an EU passport holder, and having a Spanish residence and UK one, there are problems as outlined above in the article.

I nearly got caught out on a couple a few years back..........fortunately other countries are close by and allowed for an overnight transit with a vessel and stamped exit for me, so I could continue using the boat even if I could not be in the country at the time for a few months.

Residency since sorted...
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Old 24-02-2015, 08:37   #8
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Re: Foreign registered boat in EU waters

I don't know Spanish or British law, but I am a US citizen with a unlimited resident visa for Germany. As an American citizen moving to Germany, I could bring all my household goods, my car and my boat over during the first year that I moved to Germany, duty free.

After one year, I am liable for VAT on any additional goods that I have shipped to myself in Germany.

It might be worth looking in to the Spanish law for foreigners moving in country with a residence visa.
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Old 24-02-2015, 08:41   #9
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Re: Foreign registered boat in EU waters

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Originally Posted by George DuBose View Post
I don't know Spanish or British law, but I am a US citizen with a unlimited resident visa for Germany. As an American citizen moving to Germany, I could bring all my household goods, my car and my boat over during the first year that I moved to Germany, duty free.

After one year, I am liable for VAT on any additional goods that I have shipped to myself in Germany.

It might be worth looking in to the Spanish law for foreigners moving in country with a residence visa.
He is not a foreign resident George..... he has a Spanish passport..... if you own property, he does, and sail a non EU boat...... you will get the full gaze of the EU on you.....

I was USA resident (Green card) but have 2 passports, both EU......

Smack!!
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Old 24-02-2015, 08:44   #10
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Re: Foreign registered boat in EU waters

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You MAY however be EMPLOYED as a skipper, in which case your company (owner of the boat) can apply for the temporary import relief.
I'm pretty sure they have this loophole closed.

If the primary use is personal and the owner is the skipper, it's not likely to hold up or everyone would use this and never pay VAT.

Per the clear intent of the law, you are supposed to pay VAT if you import it to the EU.

Also, you don't actually "apply". It is a presumed that non-residents are taking advantage of termporary import relief unless they voluntarily ask to formally import the vessel.

From my understanding of the rules, you owe the VAT as soon as you bring it in.
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Old 24-02-2015, 08:58   #11
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pirate Re: Foreign registered boat in EU waters

I'm sure there must be EU registered VAT paid boats for sale in the French islands.. a few come over every year with RTW plans.. but after 3000 miles of downwind sailing lose the 'Dream'... do some local sailing then put the boat up for sail and fly home rather than face the 'tougher' W>>>>E trip.
Thats how I got a French Bene' in SMX back in 2000.. no VAT liable
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Old 24-02-2015, 09:08   #12
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Re: Foreign registered boat in EU waters

In this, Antonio's case, the owner would be a company registered in BVI, and if they are to keep the boat not more than 18 months in EU waters, there is NO problem. Then you only have to sail out of the EU waters to the country which is NOT EU (Montenegro, Turkey, Bosnia and Herzegovina, i.e.) close to your geographical position, and sail back. You can do it again and again.

You are allowed to extend this 18 month period, for the time you are not aboard.

Roughly 60% of the boats have the "tax not paid" status.

On the other hand, there is a jurisdiction in which you can register the boat in EU, LEGALLY paying only 9% VAT (as opposed to up to 27% in some other countries of the EU), and then transfer it to any other jurisdiction for registration, without any further taxes to be paid.

Buying a boat with VAT paid, is a good idea of course. Unless the price tag is much higher due to this fact.
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Old 24-02-2015, 09:19   #13
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Re: Foreign registered boat in EU waters

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Originally Posted by Dolphinblue-BOB View Post
In this, Antonio's case, the owner would be a company registered in BVI, and if they are to keep the boat not more than 18 months in EU waters, there is NO problem. Then you only have to sail out of the EU waters to the country which is NOT EU (Montenegro, Turkey, Bosnia and Herzegovina, i.e.) close to your geographical position, and sail back. You can do it again and again.

You are allowed to extend this 18 month period, for the time you are not aboard.

Roughly 60% of the boats have the "tax not paid" status.

On the other hand, there is a jurisdiction in which you can register the boat in EU, LEGALLY paying only 9% VAT (as opposed to up to 27% in some other countries of the EU), and then transfer it to any other jurisdiction for registration, without any further taxes to be paid.

Buying a boat with VAT paid, is a good idea of course. Unless the price tag is much higher due to this fact.
Hi Bob,

Yes, according to Some Frequently Asked Questions about the rules for private boats - European commission which seems to be a reliable source, since it is published by the European Commission, "..But this can only be done by persons who are not EU residents"

If a person in this context can be a BVI company that owns the boat, then, as you say, the "Temporary Import" would apply.

This is what I have been told by the boat builder, but it looks too easy.

I am talking of a 59' new boat and the VAT is very substantial.


Which country has a 9% VAT rate on boats? I don't see it in European Union value added tax - Wikipedia, the free encyclopedia

Thanks
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Old 24-02-2015, 09:41   #14
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Re: Foreign registered boat in EU waters

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Originally Posted by Dolphinblue-BOB View Post
In this, Antonio's case, the owner would be a company registered in BVI, and if they are to keep the boat not more than 18 months in EU waters, there is NO problem. Then you only have to sail out of the EU waters to the country which is NOT EU (Montenegro, Turkey, Bosnia and Herzegovina, i.e.) close to your geographical position, and sail back. You can do it again and again.

You are allowed to extend this 18 month period, for the time you are not aboard.

Roughly 60% of the boats have the "tax not paid" status.

On the other hand, there is a jurisdiction in which you can register the boat in EU, LEGALLY paying only 9% VAT (as opposed to up to 27% in some other countries of the EU), and then transfer it to any other jurisdiction for registration, without any further taxes to be paid.

Buying a boat with VAT paid, is a good idea of course. Unless the price tag is much higher due to this fact.

Hi Bob,

Your opinion coincides with what the boat manufacturer has told me.

Also, according to the EC's publication referred earlier, Some Frequently Asked Questions about the rules for private boats - European commission what you say is valid if the BVI company can be considered the "person" referred there.

However, it seems easy enough to do that it makes me feel uneasy that one day the authorities could precinct my boat. I have heard horror stories in Italy in particular.

In my case, I am considering a 59' boat, the VAT (plus 12% additional tax in Spain) is very substantial and well worth it legally avoiding it

Thanks.
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Old 24-02-2015, 10:36   #15
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Re: Foreign registered boat in EU waters

As an EU inhabitant you can ask for an so called ICP, International Certificate of Pleasurecraft, try Pavillon Belge, than you will get a Dutch ICP. You will need someone to represent you. As a company outside the EU will be a problem to get an ICP.

Regards,

Martin
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