Under What Flag Would You Register ?

[goboatingnow]

DOJ, the key thing for a non EU tax resident, irrespective of flag or passport is to be able to sustain the argument that he or she is not a EU tax resident, either by carrying a foreign tax bill, domestic/utilities etc, after that the flag is completely irrelevant.


Anyways the chances of being inspected are virtually bill

Dave

[Zonker]

Originally Posted by goboatingnow

No its impossible to pass corporate law and VAT law wrapping a private pleasure boat up in a company, You may think you right, but all you are doing is engaging in fraud. If anyone investigates you will not survive.

The only reason it goes on is that VAT inspections of private craft are actually rare.

But thats not the point. fundamentally you will be breaking laws all over the place.

Who says it's a pleasure craft. It is a asset owned by the company and the company also pays the taxes required. And that asset has to be maintained "sometimes".

If this is all so "illegal" and "forbidden" - why are the Caribbeans and these low tax countries in the top ten of ("commercialized-private") vessel and aircraft registrars ?

I bet a marine surveyor will find some "unlawful" thing on your boat - sry its not personally meant - it's just to illustrate the paper law and what is practiced.

[bgallinger]

KVB..."Swiss Sailing Permit"???????

[Zonker]

Btw there is of course a drawback - if you are EU resident and the boat is non EU flagged then you have to move the boat every 18 mo outside the EU waters. If moving in and out - at some point questions will be asked.

[Zonker]

Originally Posted by bgallinger

KVB..."Swiss Sailing Permit"???????

Yea ... that really exists ... :-) .. gotta do first inland-water permit (D-Schein). Then sea permit (B-Schein). Then 1000 sm supervised training on sea - imho totally overblown.

But to get it - cost you around 5k.

[goboatingnow]

Originally Posted by Zonker

Who says it's a pleasure craft. It is a asset owned by the company and the company also pays the taxes required. And that asset has to be maintained "sometimes".

If this is all so "illegal" and "forbidden" - why are the Caribbeans and these low tax countries in the top ten of ("commercialized-private") vessel and aircraft registrars ?

I bet a marine surveyor will find some "unlawful" thing on your boat - sry its not personally meant - it's just to illustrate the paper law and what is practiced.

Zonker for god sake go ask an accountant , don't believe me

If you own a super yacht or a an expensive plane, it makes sense to employ am army of accountants to set up structures to wrap up these assets in a company. You'll notice for example that many super yachts are on the charter circuit, this is to comply with commercially trading rules. They are all built to commercial shipping standards as well for the single reason that they have to justify a commercial charter existence.

IN addition , most super yachts do not stay in the EU year round , they make sure they leave. ( theres a complex calculation based on sea miles and time in the Eu etc). Remember over 24Metres you are dealing with a commercial vessel irrespective of its actual use.


No lets leave that exalted area behind and deal with mom and pop, EU tax residents owning a 14M sailboat. There is simply no way you can wrap this in a company and use it as a private vessel and not break either company law or VAT law. Yes you may get away with it but it not legal.


I can tomorrow, register a company in Ireland ( all online for 100 euros), I can then apply for a Vat registration number. Ill pay no corporate tax for the first three years and after that since I will not profits , Ill pay nothing.

Great off I go to france and I buy my boat Vat free. No one looks any further and I sail off around the Med.



HOWEVER. if I'mm inspected

(a) Benefit in kind, 30% of the value of the asset annually added to my personal income tax - mega oouch

(b) VAT self supply - in essence the company must pay the VAT and fined immediately as the craft is in fact not being used for the intended commercial reason, ( I don't think visiting countries and ogling girls counts as a commercial trading reason).

(c) because of the depreciation rules, I will be writing off the value against no profits hence generating losses. You will be aware that there are minimum shareholder funds etc position to ensure you are not trading fraudulently to recklessly, ( your auditor will not sign off the accounts),

(d) Since the company has no commercial income, I will be regarded as not trading, this generates its own issues. (VAT, corporate rules, strike off etc).


Even if I wrap up the company outside the EU, I will fall foul of the "beneficial owner" rules as they apply to VAT exemptions

Please if this was legal , there would be 1000s of companies flogging you company structures.( for boat purchases) and every broker would have a brochure in his office. The fact is there arnt because its illegal.

Please don't tell me how to suck eggs, I have been involved in sail training and boat purchases in Ireland, the UK, France, Spain, Italy and Germany.

It can't be done legally for small leisure boats. END of STORY

Dave

[David_Old_Jersey]

Originally Posted by goboatingnow

No its impossible to pass corporate law and VAT law wrapping a private pleasure boat up in a company, You may think you right, but all you are doing is engaging in fraud. If anyone investigates you will not survive.

The only reason it goes on is that VAT inspections of private craft are actually rare.

But thats not the point. fundamentally you will be breaking laws all over the place.

I appreciate what you are saying - and agree that simply dumping a boat into a company solely to get the VAT back is over the line between tax avoidance and evasion..........but just to say that over here folks do still use Companies to own Yachts ("our" sized ones!) that are also registered in Jersey and based in the EU - with or without EU resident owners. (not of course on the scale it was 20 years ago - I wonder why? ).

Why? Just because someone has lots of money does not mean they don't sometimes have "normal" sized boats (even if that not all they have!), and dumping it into a company just makes life easier for them as makes it simple for some other b#gger to sort out the paperwork / day to day stuff. maybe some people do have better things to do? or just can afford not to be arsed .

The company itself has no "commercial" purpose (and nor does it pretend to be - simply a holding vehicle). and where required VAT is paid.

More often than not (nowadays) it is something tacked onto the end of other entities (Trusts and Companies) that do have tax benefits for the person / family involved. The Jersey registration has an attraction because it is a flag folks recognise and the boat has no skipper qualifications requirement (and nothing required for the boat - which means no inspections, some people value privacy over being reminded they are being kept "safe", by men with guns....including privacy from the Govt when sitting on the can ).

Plus throw in that some folks do worry about having assets easily linked to them, not always for tax evading reasons - simply some don't want to risk their kids fingers turning up in the post with a "tax" demand. It happens, including in Europe. An ounce of prevention always better than a large dollop of cure.

Anyway, that my final word on this thread. probably..........

[goboatingnow]

DOJ, Channel island company law and tax etc, is a specialized area unto itself. for ordinary EU people you can break the law just by having a bank account there

In most jurisdictions companies must trade. ( i.e. you cannot be loss making for ever). Usually trusts are used to hold just assets.

IN the EU you do not have the benefit of corporate anonimity ( in general ) this is one of the peculiarities of the channel islands

Most of boats registered into corporate entities are or were dodging tax, many were caught and the clamp down continues. IN particular sailing around as a EU resident in a Channel island registered boat is like a red rag to a bull. ( the french LOVE inspecting them)


dave

[Zonker]

Hey Dave

don't get me wrong - I am here to discuss the topic of the poster and also to reveal what is possible and what is "most likely" possible. And not who is right and who is not. I think this should be the true value of this site ...

(a) Benefit in kind, 30% of the value of the asset annually added to my personal income tax - mega oouch
I own this company - why should I pay income tax on it ?

(b) VAT self supply - in essence the company must pay the VAT and fined immediately as the craft is in fact not being used for the intended commercial reason, ( I don't think visiting countries and ogling girls counts as a commercial trading reason). If a company owns for example expensive antics (not trading them) - is it now related to the "business" or not.

(c) because of the depreciation rules, I will be writing off the value against no profits hence generating losses. You will be aware that there are minimum shareholder funds etc position to ensure you are not trading fraudulently to recklessly, ( your auditor will not sign off the accounts), Again my antics example - it's inventory but the market value will be stable. So even better for the owner - taxed with deprecation but will be sold at market value.

(d) Since the company has no commercial income, I will be regarded as not trading, this generates its own issues. (VAT, corporate rules, strike off etc). Hm ... I know a lot of companies which make losses. So if a company just does "nothing" the state should feel happy since the company pays taxes at least.

As far as I understand these arguments are valid for a non-offshore company. But looking at these offshore companies - there is just nothing to argue against but the annual cost of registration (=tax) and maintaining the company with via a "virtual office".

The original poster is an owner of a 44 feet Lagoon ... so I assume worth of 400k-500k or so. I still say - register it via a offshore company. You pay abt 1000-2000 USD / year, you have limited liability, you have not to worry abt VAT & friends.

I am currently in the process of buying a crappy boat worth 10K (owner wants more !) ... and I am considering to register it via an offshore company. But since I already own an offshore company and since I plan to buy a larger boat (maybe !) in the future and since ... a few other reasons. And also it is completely legal . The tax department knows it, I pay taxes (wealth) on it. And a boat with a red ensign as a "non-commonwealth-skipper" would be just cool !

Btw I think the reason why this is not more commonly used :
a) ppl want "home" flag
b) ppl are just not aware of this
c) boat is too cheap < 100k or so
d) boat is just a tiny part of the overall wealth

[goboatingnow]

Jeepers Zonker where do I start,

Most EU juridictions have provisions that in effect charge you for use of a companies assets, Legally a company and You are separate.

The original poster is an owner of a 44 feet Lagoon ... so I assume worth of 400k-500k or so. I still say - register it via a offshore company. You pay abt 1000-2000 USD / year, you have limited liability, you have not to worry abt VAT & friends.

If you are a Eu tax resident , this is simple Tax fraud. why on an open forum would you promote an illegal act.

"Hm ... I know a lot of companies which make losses. So if a company just does "nothing" the state should feel happy since the company pays taxes at least."

you cannot make losses forever, companies don't pay taxes on losses so the state get nothing. most countries have rules about loss making

Again Zonker, if it was do-able , every broker in Europe would recommend it. Because the savings are potentially huge

Quite frankly my friend, get yourself a tax accountant before you end up in jail.

Dave

[Zonker]

Originally Posted by goboatingnow

Jeepers Zonker where do I start,

Most EU juridictions have provisions that in effect charge you for use of a companies assets, Legally a company and You are separate.

If you are a Eu tax resident , this is simple Tax fraud. why on an open forum would you promote an illegal act.

"Hm ... I know a lot of companies which make losses. So if a company just does "nothing" the state should feel happy since the company pays taxes at least."

you cannot make losses forever, companies don't pay taxes on losses so the state get nothing. most countries have rules about loss making

Again Zonker, if it was do-able , every broker in Europe would recommend it. Because the savings are potentially huge

Quite frankly my friend, get yourself a tax accountant before you end up in jail.

Dave

:-)

Hm ... we are really getting to the basics now - how to form a company and what is a company and who owns what in the company and how to run a company. May be just google for it ...

I guess this topic is just a little bit too much for an ordinary accountant ... get a proper lawyer and all will be setup properly.

Further you can do it transparently so that the tax administration where you live knows about it. Things are really easy then.

Or you can "hide" it - basically "offshoring" it. I am not proposing to do it - everyone is old enough, but in some cases it might be necessary. (Btw to own a offshore company doesn't mean one is hiding something !!!)

So this is my last post regarding this topic ...

[impi]

We found Gibraltar worked for us ... we pay a small annual fee but it comes complete with a VERY GOOD agent who acts on our behalf when ever we need the service.

[Lagoon4us]

Thanks our British Passports makes this easy to do, i just looked at a website dealing as agents but as a company or an individual?

[goboatingnow]

Originally Posted by Lagoon4us

Thanks our British Passports makes this easy to do, i just looked at a website dealing as agents but as a company or an individual?

Since you are not EU tax residents you gain nothing by wrapping it up in a company.

[Lagoon4us]

We are certainly not EU tax residents i just read the guff on their website and they indicated a choice, maybe there are advantages other than tax in a company (i'm new to this so asking the obvious questions) such as liability ie separating us as owners.

I have found all the preceding posts to be enlightening and i hope others will find it the same, nothing asked nothing answered,,, Cheers for your input