Best Way to Avoid EU VAT?

[plato-gb]

and your disclaimer noted.
We know for a fact that work was done on the boat while in Jersey that considerably increased its value. This alone, from what I understand invalidates its eligibility to be brought back into the EU under RGR, Returned Goods Relief - however, the seller is now saying, although the boat was based Jersey from 1995 to 2002 (sailing into British and French waters during this time) it was never 'exported to Jersey' from the EU.

This sounds like ******** to me. Surely if it is documented that a boat had considerable work done while outside the EU it would be deemed exported for that time, even if it was never declared.
Exhausting this - yes, I know we can't be forced to write a cheque but we need to establish that the seller is not providing the vesse as described (ie vat status paid) in order to claim back survey, antifoul and launch costs which add up to 1800 eur. I see no reason why we should not recoup this money as it has been spent on his boat.

[goboatingnow]

My understanding is as the following

The Channel Islands were included in the Customs territory of the
European Community (EC) under a treaty of accession which entered into
force on the 1st January 1973. The effect was ultimately to allow all
Community goods moving between member states of the European Community
and the Channel Islands to be imported [from other EC members] without
incurring Customs dutyThe Channel Islands were included in the Customs territory of the European Community (EC) under a treaty of accession which entered into
force on the 1st January 1973. The effect was ultimately to allow all
Community goods moving between member states of the European Community
and the Channel Islands to be imported [from other EC members] without
incurring Customs duty

A community goods are ones that are in free circulation within the EU , ie customs and VAT paid.

Hence teh boat can circulate through the Channel islands without attracting vat on import into the EU , as long as VAT was orignally paid. It matters not that the boat was sold in the channel islands, this only an issue when RGR is being claimed.

However technically the items added to the boat should be declared and VAT paid. Note that any service performed on the boat in the channel islands, is not relevant for VAT purposes as the service was carried out in the channel islands, so labour costs etc are ignored, however say if the boat received new electronics, engines etc, these technically are not community goods and are liable for VAT on import into the EU.

David Temopory Importation relief now last for 18 months not 6 ( that was done away with about 2 years ago to my memory).TI is availed by channel islands residents to allow them to enter the EU paying VAT. ( as their goods are not in general community goods).


Note above generally the forms associated with procedure T2F should have been followed to ensure proper record keeping

[goboatingnow]

VAT expiration is a permanent problem here and again, the EU sets a legal frame, national implementation still allows for national surprises.
In general, after a year outside EU the VAT-paid status is lost. As even the tax collectors think this is harsh on somone sailing around the world the original owner usually enjoys a tax holiday at the return of his/her journey. But you have no right on this, it depends on your country and tax collector.

Selling the boat outside EU waters looses the VAT-paid status, make the contract within EU, best, bring the boat into a EU country if possible. Though you must have a serious tax fraud investigation until they dig that far.

actually RGR is available for upto 3 years and can be extended beyond that time, This is EU wide as the VAT rules are harmonised. Local customs can differ on implementation but they cant change the basic rules.

[plato-gb]

the latest twist is that, since the boat was taken off UK reg and re-registered in Jersey, and only in Jersey for 6 years of its life, I am told that that alone invalidates any previously valid vat paid status since the boat, if registered in Jersey, owned by a Jersey resident and with a home port in Jersey becomes a non-EU vessel and would only be able to go into EU on TI (owned by a non-EU resident) or then be 'fully' imported with payment of VAT etc.
Your thoughts?

[goboatingnow]

The basic situation as I outlined it still applies. The boat was purchased VAT paid ( and presumably you have documentary evidence of that). Jersey is within the Customs Union of the EU, Community Goods, ie products in "free circulation", ie with all taxes and duties paid, DO NOT looses that status by going to Jersey , Registration is irrelevant, it matters not to the Customs Officiers what the registration is only the tax status of the owner and the goods in questions

Once you are sure that VAT was originally paid then thats sufficient. There is a procedure called T2F thats meant to be followed for goods in common transist through the Special territories of the EU ( the channel islands). This may not have been followed, but the underlying logic is the same.


Hence for community goods, Jersey is the same as the UK or France, or anothe other EU country. It is not "outside" the EU for customs purposes.


You need the services of a good VAT lawyer for this by the way as I could be wrong. The problem with VAT is teh document trail and the attitude of individual customs agents.

However in practice if you have a VAT paid proof of some sort showing the boat was imported into the EU and you are now transacting this deal with in the EU, you should be fine. Customs agencies are not interested in the registry of the boat, merely the VAT status.
Dave

[plato-gb]

Jersey is one of the EU Special Territories. Quote below from HMRC website:
"goods from one of the EU Special Territories, such as Jersey or Guernsey, in which case you’ll have to pay Import VAT."
It is regarded, for VAT purposes, as being outside the EU. Therefore, goods coming into the EU from Jersey are treated as imports that have to have VAT and duty paid. This is the reason for my difficulties with the boat! Believe me, I wish you were right..................s.

I say again, the boat was based in Jersey for 7 years, although sailing 'frequently' (we are told) back to EU ports. No export from or re-import to the EU was ever made..... from what I can gather, this means the boat was deemed temporarily exported when it left and temporarily imported when it returned. While based in Jersey, it had its UK reg cancelled and replaced by Jersey reg part 1 - home port listed as Jersey. So when it sailed back without being declared it non-EU registered, non-EU home port and owned by non-EU resident (owner was Jersey resident). Once back in EU (presumably under Temporary Import, it was sold to an EU resident who is now trying to sellit to me as a 'deemed vat paid' vessel. I am arguing this as when a vessel under TI is sold in the EU, it consitutes a chargeable event and the vat is then due.

[goboatingnow]

It is regarded, for VAT purposes, as being outside the EU. Therefore, goods coming into the EU from Jersey are treated as imports that have to have VAT and duty paid. This is the reason for my difficulties with the boat! Believe me, I wish you were right

I am right , this is the case, EU community goods do not looses there status on being transferred to , and from the EU special territories.

Yes Jersey is outside fiscal EU and hence is outside the VAT area, But a private individual selling a boat to a jersey individual cannot reclaim VAT. Hence the goods remain community goods. ( Note flag registration is irrelevant for VAt and customs purposes on private lesuire vessels).


Flagging a vessel does not export it. I can for example flag my vessel in the channel islands, it doesnt make a damm difference to the VAT status, it doesnt "export it" etc.

The Jersey individual does not need to claim TI ( and in fact is incorrectly and illegaly doing so), TI is only available ( for boats) where non-community goods are in question. for example if your Jersey buyer, bought a new boat VAT free ( ie exported it from say the UK), then that is a non-community goods not in free circulation in the EU and hence he/she would have to use the TI procedures when visiting EU ports.

If all these transaction where in a truely foreign country ie non EU /non special territories then your analysis would be correct and VAT would be due on reimport of the vessel. But The channel islands are inside the Customs Union of the EU.

it was sold to an EU resident who is now trying to sellit to me as a 'deemed vat paid' vessel. I

He is correct and incorrect, VAT deemed to be paid applies to certain goods that may attract zero VAT rates, or or pre-date certain VAT regimes ( akak vessels grandfathered in). This boat should be VAT Paid and there should be evidence of this as in the original sales invoice showing VAT paid. ( WHy did a jersey individual pay the VAT by the way , seems strange). Once you are happy that VAT was paid and never reclaimed, then youre fine.

[goboatingnow]

BTW, I'd be deeply suspicious that VAT wasnt reclaim on this boat. Unlike the UK where there is a formalised "sailaway" scheme, that allows a boat being exported out of the EU and this includes Jersey for VAT purposes) to fill out a form and hence not pay the VAT, France typically requires you to pay the VAT to the seller and then reclaim the VAT subsequently. ( where the buyer can do this ,as in a Jersey resident)

This can lead to a potential for fraud, as the buyer has a purportly VAT paid invoice from the dealer, but in fact VAT was reclaimed and hence the vessel is not in free circulation. In this case TI would be used to allow the jersey resident to sail to EU destinations, but the scam is when it was sold back to the EU resident he should have paid VAT on the vessel. I'm extremely suprised that that buyer didnt cover the VAT trail. I suspect he didnt fo his homework.

One way of covering yourself. is to make the seller sign a declaration that the vessel is "free from any emcumbrance" and specifcally VAT and that he is the legal owner, has good title and is free to sell the boat. AT least this way if you get stuck , you can sue him

[plato-gb]

goboatingnow, You either haven't actually grasped the details of the situation (quite understandable, they are complicated) or you seem unaware of the regulatory assessements in place to define what does or does not constitute the export of material from the EU.
Thank you for the time you've clearly spent but we are talking at cross purposes.
Good sailing

[goboatingnow]

I have 28 years of inter community trading , including commercial importation and exportation of yachts in and out of the EU ( inc the channel islands) and have accounted for VAT etc for many years

You either haven't actually grasped the details of the situation (quite understandable, they are complicated) or you seem unaware of the regulatory assessements in place to define what does or does not constitute the export of material from the EU.

Perhaps you could enlighten me, as to these "regulatory assessments". You seem convinced of your own answer, if so why some on here and look for one. It is you seem not to understand the concepts involved. You sir havent a clue as to what constituts exporting of product from the EU, you dont understand the concept of the Customs Union as opposed to the EU per say.

The fact is if there is a regulatory assesment that the boat was exported to Jersey and hence is VAT free , it was because VAT was reclaimed, if that is so then the subsequent resale without VAT to an EU resident was illegal. Otherwise see community goods, in free circulation , T2F proceedures and the channels islands

If your that convinced dont buy the god-dammed boat

[plato-gb]

There is no need lose your latin (or your grammar and spelling) over it. I am still awaiting confirmations from one of the authorities I have asked. I will happily quote chapter and verse once my 'episode' is over. If you need confirmation on the definition of export and import, check Commission Regulation EEC No 2454 of 2 July 1993, articles 230 to 236.
As I have stated, you appear not to have grasped the details of the situation (not your fault - it is horribly complicated).

I repeat, good sailing

[goboatingnow]

Humour me, please explain the horrible bits that I dont undertand??

Firstly can I ask you can you explain

(a) The basics of VAT
(b) Registered a boat on any of teh channel islands reigtry
(c) understand teh concept of community goods
(d) Accept the fact that Jersey is within the Customs union of the EU and how that is differnt then the EU

[goboatingnow]

My friend, the act defines

"

the sole act of crossing the frontier of the customs territory of

the Community."

moving a boat say from france to Jersey does not do that, VAT can be claimed back etc, but it is not an export in the proper sense.

[goboatingnow]

in order to claim back survey, antifoul and launch costs which add up to 1800 eur. I see no reason why we should not recoup this money as it has been spent on his boat.

by the way, I dont understand this, why is this related to teh VAT, are you trying to actually back out of a deal already done.

[goboatingnow]

just some more references, from the "states of Jersey " website

2.33. The Channel Islands operate the Community common tariff and comply with all Community customs legislation. The Channel Islands make no contribution to nor do they benefit financially from the Community. As far as traded goods between the Channel Islands and the Community are concerned, all goods in free circulation in one territory are treated as being in free circulation in the other.

But of course you seem to what the "other" answer