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Old 20-09-2009, 09:43   #1
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Best Way to Avoid EU VAT ?

I am looking at buying a yacht in Europe which I will eventually want to export to Australia. Many of the boats I have seen on the net have not had tax paid and for obvious reasons I do not want to be paying tax over here and then paying more tax when it gets to Australia.

I am an Australian living in Sweden and I have both Aussie & Swedish citizenship. My hope is to buy the boat next spring/summer and then export the boat from the EU at some point after 6 and 18 months or even longer. My thoughts are that I would remain working in Sweden for much of the time and perhaps live on board for the last 6 months.

I understand that I could probably register the boat in Australia, but if I did how long could I keep it within the EU? Will I have them asking me for tax because I have the EU passport?

Anyone had any experience with this? I suppose the issues I could have would be similar to a Brit having a Guernsey/Jersey etc.. registered boat?

Would having the boat owned by a non-EU resident or a non-EU company make any difference?

Another option I guess would be to set-up an EU "charter" company to own and register the boat in the EU and then I "buy" the boat and register the yacht in Australia when I am ready to leave.

Has anyone got any thoughts and experience of this or any other suggestions?
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Old 20-09-2009, 10:13   #2
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Since rules are supposed to be uniform throughout the EU and I don't read Swedish...here are the UK rules.

HM Revenue & Customs
Usually you can buy and export without tax but the UK rule is that you have to get out quickly.

Quote:
an EC resident (or emigrant) who intends to take the boat under its own power outside the EC within 2 months of the date of delivery. The boat must be kept outside the VAT territory of the EC for a continuous period of at least 12 months. VAT will normally be payable if the boat is re?imported into the EC
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Old 20-09-2009, 10:28   #3
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Thanks, I guess it should be pretty much the same for Sweden, so that simplifies things... I have to look at the EU company or pay up
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Old 20-09-2009, 10:41   #4
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Hoppy, register down under and leave quick outside EU for a couple of days and then come back to start the 18 months clock. What's near Sweden and outside EU nowadays, Norway?

cheers,
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Old 20-09-2009, 10:48   #5
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Hoppy, register down under and leave quick outside EU for a couple of days and then come back to start the 18 months clock. What's near Sweden and outside EU nowadays, Norway?

cheers,
Nick.
Actually I was thinking Turkey or Croatia as I have been planning on Greece as where I keep the yacht. Except moondancers quote from the UK tax office says the boat has to stay out of the EU for 12 months.
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Old 20-09-2009, 11:31   #6
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Hoppy,

Your situation is different. The boats you see didn't pay VAT so they are there on an 18-month deal already. You are not exporting the boat. That "2-month before leaving and stay away a year" thing is for a new EU built yacht for export. The yachts you are looking at are just visiting.

You must check if they didn't over-stay of course. Also, maybe many that you see aren't really in the EU tax-wise, like Gibraltar and other exceptions.

It's best to talk with the broker about this: they are experienced with this.

cheers,
Nick.
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Old 20-09-2009, 11:39   #7
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Actually most of the yachts I am looking at are EU flagged. Either owned by real charter companies or other companies that can justify the yacht and not pay tax on them. Some yachts are in Croatia or Turkey which is not the EU and may be treated differently again.
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Old 20-09-2009, 12:06   #8
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1. Buy a EU-vat paid boat, or
2. buy a EU-vat exempt boat (older than the VAT, or a home-built),
3. buy a boat outside the EU,
3. sail her out, sail her in, to avoid the VAT,

Buyer beware - depending on your passport / residency status (also the s.c. 'tax residency', which is a separate thing) and the boat's registration place some special non-VAT (but painful) taxes may apply - this varies from country tp country within the EU.

Buying a pre-VAT boat is a good option - if you like any of the older boats and if you find a clean, sound sample. Still beware of the other taxes though.

There is a nice discussion of some of the aspects at Noonsite.

b.
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Old 20-09-2009, 13:24   #9
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OP, theres a lot of nonsense here, Firstly since you are working in Sweden you are an EU tax residesnt, You are not entitled to VAT rebates. There is a scheme which is EU wide to allow you to export (very short time) a non-VAT paid boat, however the UK is one of the few countries that has formalised this scheme, MOst countries ( and more correctly the selling dealers) require you to pay the VAT and then reclaim the VAT when you show proof of export ( usually by showing proof of import into another country. THis is because they ( as the seller) are liable if you dont actually export the boat and they could get hit for the VAT.

If you register a company ( and hence VAT register it) you will need that company to be established in a different country then you are buying the boat, otherwise the buying company will pay the VAT.

Quote:
The boats you see didn't pay VAT so they are there on an 18-month deal already.
No Jedi, thats nonsense, it is perfectly legimate to have EU non-VAT paid boats. They could be commercial, charter, training schools, or simply wrapped up in a corporate identidy ( legimate or otherwise). It you have a VAT number its easy to buy a "new" BOAT vat free in the EU. However you can fall foul of corporate goverance rules etc.

Unless you are buying a new boat and legitemately removing it from the EU the only other way to avoid paying VAT is wrapping it up in a VAT registered company ( and weather you fall foul of corporate goverance rules , is you own lookout.). To avoid having to pay the VAT and reclaim , the buying company and the selliing company need to be VAT registered and in different EU countries.

It can be done but it aint simple.
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Old 20-09-2009, 13:47   #10
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The "18 month deal" is not available for EU tax residents. And you can't get around it, as far as I know, by registering it in a non-EU company.

I think you are allowed to bring your personal boat into the EU without paying VAT if it's used and you were living abroad when you brought it. But that's not your case.

I think if you buy a non-VAT paid boat you're going to have to pay the VAT. Or just buy a VAT-paid boat in the first place -- 90% of them are VAT paid anyway, and there's not abig price difference in my experience.
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Old 20-09-2009, 14:05   #11
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Thanks...

I suspected my tax residence here would limit my options but it does not hurt to fish around.

I will speak to my accountant to see what he says about setting up a company for this. I know that Sweden is quite strict on charter companies expecting something like 14 weeks minimum charter per year.

I'm sure I could get friends and family to "charter" it for enough weeks to be legal and as I will probably keep it in Greece, where I understand that the charter is Vat free, then I would only get taxed on the profit. Even if I have to pay vat on the charter and profits, it is probably still a better deal for me than paying vat up front.

Or I just find a boat that is already Vat paid and take it the simple way. I have noticed that vat paid boats don't seem to cost much more, just not very common.

I have until spring at least before I can do anything anyway.
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Old 20-09-2009, 14:10   #12
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VAT disappears out of secondhand boats value anyway, effectively it depreciates out of the original value.
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Old 28-09-2009, 21:09   #13
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Thanks...

I suspected my tax residence here would limit my options but it does not hurt to fish around.

I will speak to my accountant to see what he says about setting up a company for this. I know that Sweden is quite strict on charter companies expecting something like 14 weeks minimum charter per year.

I'm sure I could get friends and family to "charter" it for enough weeks to be legal and as I will probably keep it in Greece, where I understand that the charter is Vat free, then I would only get taxed on the profit. Even if I have to pay vat on the charter and profits, it is probably still a better deal for me than paying vat up front.

Or I just find a boat that is already Vat paid and take it the simple way. I have noticed that vat paid boats don't seem to cost much more, just not very common.

I have until spring at least before I can do anything anyway.
That must be a multi million Euro yacht or the company overhead plus tax accountant will eat up all you saved on not paid VAT.

I am Austrian, my yacht is built in the Philippines and registered in Austria (A is EU-member). There was no VAT paid, once and if I will reach EU waters I am due to pay VAT, VAT is paid where the yacht is kept, meaning to say, I can select the country with the least VAT.

If you find a yacht without VAT paid in EU waters, get it out of EU waters and make your deed of sale THERE. If the seller is willing to help you.

The 18 months grace period is for visitors, not for EU residents (regardless of citizenship). As resident and/or citizen you are not entitled to "consume" it without VAT paid. MAlta or Cyprus has a VAT-avoiding scheme whenever you register with them, again, only makes sense for the really big guys, needs a registered company there.

If you have ANY intention to bring the vessel once back in EU waters, make sure you have the proper CE declaration for the vessel and, if it is a recent built, for the engines too (new pollution regulation). A CE survey is usually far to expensive for a used yacht unless she is very special build.

Check Australian sites for similar legal traps that might cost you money or make registration impossible.
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Old 29-09-2009, 02:53   #14
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It sounds like passing the river to get water, this buying a boat on another continent or country. I have checked with people buyng in us to ship to eu, most of them have come out in the red.
And if you make a superdeal the taxman may say you have a fake bill of sale. I think theres plenty for sale in most places that I think thats the better way to go.
If I where to import a boat from usa, I 1st have to pay duty and freight, on that sum I would have to pay 25% salestax.
And dont ask me about CE certification and other I have no clue.
I think most will bite themselves in the rear trying to save a nickel./Harry
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Old 29-09-2009, 02:59   #15
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Example theres a Hallberg Rassy i n California Listed at 25000 Us dolla. They sell for 70-85000 usdolla here.
I dont see the savings having all costs around it. 20000 to ship here.
45000. New engine needs installed another 20000.
65000. plus duty and salestax.
Im already off in that deal. / Harry
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