EU Importation and VAT

[jpemb7]

There are extended visas in some countries, but again they only apply to that country.

Thanks again. When the time comes I might be able to investigate this as an option.

[boatman61]

Originally Posted by David_Old_Jersey

For bonafide Non EU persons (or Companies) New (ex VAT) Boats do get exported (physically) to non EU places like Jersey - which in practice does seem to satisfy manufacturers / sellers that they will not later get a VAT bill - a genuine concern for the vendor. Whilst adding a Jersey Flag alone doesn't count as an "export", it does add to the picture of a boat that is being exported (as well as simply being as good a place as any to register for low cost and minimal regulations - i.e. no need to have a guide to using the head on a Jersey reg boat).

Whilst the above does not of course "magically" allow a boat to then live permanently within the EU VAT free, for those looking to head further abroad for extended periods it can provide a stepping stone..........you always have the option of later returning and paying the VAT, albeit at that point on a s/h vessel.

Good timing on this thread , am meant to be updating / putting together some general guidance notes / an idiots guide (note: not "advice" ) for a firm over here who does corporate boat registrations (as a small part of their business)......but VAT not really my thing - kinda like watching paint dry, but without the excitement .........but was thinking of maybe then also putting something up on the web, given this does seem to crop up now and again........time will tell


Phil, I clicked on your links (and images - nice Tiki ) - but couldn't find any Corribee pictures you got anything online?.....still miss my old Corribee

Hi David, thanks... Kali was a great boat, sold her to a guy who took her to Ibiza... he only had her for one season in San Antonio before it was wrecked by someone on an out of control jetbike.... great shame
Naiad my Corribee is in an Album with same name on site... they're a nice boat but a little to tender for my liking...lol
Phil

[HBird]

Originally Posted by boatman61

Bugga..... Life aint fun anymore since we joined the EU.... all these Directives n Taxes..... hahahahaha
Life time Tory changing to Independent Party next Election....lol
Phil

Hello
We are non EU citizens with a non EU boat and we would like to spend sometime in the EU. I understand the boat can stay 18 months without being subject of paying VAT but how about us? Can we only stay 90 days even with a marina contract? What about applying for residence? in this case will we be subject to pay the VAT for the boat?
Please if anyone can help me with this subject I will appreciate it.

[Katiusha]

Originally Posted by boatman61

Bugga..... Life aint fun anymore since we joined the EU.... all these Directives n Taxes..... hahahahaha
Life time Tory changing to Independent Party next Election....lol
Phil

There is also an incorporation path, where you create an offshore company that owns the boat. In that case when you enter EU you'll be an EU citizen captaining a non-EU owned boat ( I would think similar to your deliveries). But then you'll have to bear the costs of keeping the company. Out of Red Ensign cat 1, the BVI or Bermuda might be the cheapest. Or you could go for any other offshore. Out of recently started ones, I hear St Kits and Nevis is starting to encourage foreign company/boat registrations.

[HBird]

Thank you Katiusha ! that is exactly our case. Our boat is registered in USA but we are non americans nor EU citizens. It means if we apply for recidency for staying longer in the EU, the boat will not be subject of paying VAT?

[goboatingnow]

Originally Posted by Katiusha

There is also an incorporation path, where you create an offshore company that owns the boat. In that case when you enter EU you'll be an EU citizen captaining a non-EU owned boat ( I would think similar to your deliveries). But then you'll have to bear the costs of keeping the company. Out of Red Ensign cat 1, the BVI or Bermuda might be the cheapest. Or you could go for any other offshore. Out of recently started ones, I hear St Kits and Nevis is starting to encourage foreign company/boat registrations.

The VAT law uses the term "beneficial Owner". If you wrap a boat in a company you better not own the company as this has and is being interpreted by VAT officials as meaning you are the owner of the boat. If you are a EU resident and the beneficial owner then vat is due. Furthermore you will have to convince VAT aithorities that the boat is engaged in commeral l charter and you are merely delivery it for the owner.please read the text of the TIR VAT exemption. Of course your commercial yacht will meet that companies requirements for charter yachts as well.

In practice a EU citizen in charge of a obvious leisure vessel, say with family along is going to get caught for dodging VAT. I if we ( EU tax residents) could wrap up boats in foreign companies to escape VaT there wouldn't be a EU flag registered in the whole of Europe. The laws are written to prevent this . It's VAT evasion to try and sidestep it.

Dave

[goboatingnow]

Originally Posted by HBird

Thank you Katiusha ! that is exactly our case. Our boat is registered in USA but we are non americans nor EU citizens. It means if we apply for recidency for staying longer in the EU, the boat will not be subject of paying VAT?

If you apply for residency ( and I'd need to know what type of residency permit you are seeking ) then in some cases you may be able to take advantage of TOR ( transfer of residence). This allows you to import your personal possessions ( once) without having to pay VAT or import taxes. However you do have to meet the various criteria for transfer of residence

Furthermore , upon gaining residence status, you will have to abide by the national rules governing boat registration. So you are not unlikely to be able to retain the US registered boat. You would have to register as in effect a national of the country you have residence in.

If you do not quality for TOR. ( your residence is temporary or you fall outside the rules) as soon as you become tax residences ( 182-186 days residence) you then will be subject to EU VAT law requiring you to import the vessel and pay VAT.

If you are seriously considering a residence visa ( and assuming you qualify ) you need good tax advice on high value personal possessions. ( also peruse the double taxation agreements between your new host country and your original tax residence. You can often be tax resident of two countries at once.

Also bear in mind that most temporary residence visas of one EU country does mot allow you any more then the combined 90 days in other schengen countries. You are still treated as a foreign tourist once you leave your new host country. There is no EU wide residence visa. For that you must become a citizen.

Dave

[HBird]

Thanks Dave. Your explanation is clear. I wonder how non EU sailors manage to sail in the EU with all this laws...

[David_Old_Jersey]

Originally Posted by goboatingnow

In practice a EU citizen in charge of a obvious leisure vessel, say with family along is going to get caught for dodging VAT. I if we ( EU tax residents) could wrap up boats in foreign companies to escape VaT there wouldn't be a EU flag registered in the whole of Europe. The laws are written to prevent this . It's VAT evasion to try and sidestep it.

Dave

That worked in the "good old days". Two things buggered that up, a) the plebs doing it as well as our lords and masters (with tax it is a numbers game) and b) computers making it easy for Customs / Govt to get their sh#t together.

The Offshore company and yacht reqistration route still has benefits (for some) - but evading EU VAT is not (no longer ) one of them.

[goboatingnow]

Originally Posted by HBird

Thanks Dave. Your explanation is clear. I wonder how non EU sailors manage to sail in the EU with all this laws...

Theres absolutely no issue for non-EU sailors, They get 18 months , no questions asked, no license , just arrive. Thats 18 months for the boat before VAT is dues, the crews unfortunately only get 90 days.

dave

[goboatingnow]

Originally Posted by David_Old_Jersey

That worked in the "good old days". Two things buggered that up, a) the plebs doing it as well as our lords and masters (with tax it is a numbers game) and b) computers making it easy for Customs / Govt to get their sh#t together.

The Offshore company and yacht reqistration route still has benefits (for some) - but evading EU VAT is not (no longer ) one of them.

Correct, there were and are many non-VAT boats sitting quietly in back waster marinas all over Europe. However in recent years the penalties are high and the authorities more vigilant. Remember harmonisation of Vat laws only came in with the Single European ACT. ( which the Uk signed without a murmur).

dave

[HBird]

Originally Posted by goboatingnow

Theres absolutely no issue for non-EU sailors, They get 18 months , no questions asked, no license , just arrive. Thats 18 months for the boat before VAT is dues, the crews unfortunately only get 90 days.

dave

yes the problem is us, we wanted to live onboard but we only have the 90 days and then we have to flight back home and wait another 90 days ...we will change our sailing plans definitely.
Thanks

[Katiusha]

Originally Posted by goboatingnow

The VAT law uses the term "beneficial Owner". If you wrap a boat in a company you better not own the company as this has and is being interpreted by VAT officials as meaning you are the owner of the boat. If you are a EU resident and the beneficial owner then vat is due. Furthermore you will have to convince VAT aithorities that the boat is engaged in commeral l charter and you are merely delivery it for the owner.please read the text of the TIR VAT exemption. Of course your commercial yacht will meet that companies requirements for charter yachts as well.

In practice a EU citizen in charge of a obvious leisure vessel, say with family along is going to get caught for dodging VAT. I if we ( EU tax residents) could wrap up boats in foreign companies to escape VaT there wouldn't be a EU flag registered in the whole of Europe. The laws are written to prevent this . It's VAT evasion to try and sidestep it.

Dave

Thanks for the explanation. I didn't know. Two more questions:

But there are offshore countries that don't make company owners information public. What is done in those cases?

And why does the yacht must be qualified as commercial?

[goboatingnow]

Originally Posted by Katiusha

Thanks for the explanation. I didn't know. Two more questions:

But there are offshore countries that don't make company owners information public. What is done in those cases?

And why does the yacht must be qualified as commercial?

Yes of course, many countries have such practices that do not disclose the owners. That of course is not the problem, the problem is convincing customs you are not the owner. ( remember guilty until proven innocent). Then add the obvious suspicion if you answered " I can't tell you " , its secret!!!.

As to you second question,

A company and I am generalising here, must be a legimate concern. Its must be seen to be "trading". Hobby companies generally cannot exist as they fall foul of various corporate governance laws. In europe , for large yachts , which are generally built to commercial standards and partake in some charter activity to justify their VAT free status etc are fine. For smaller boats this simply doesn't stand inspection. The depreciation alone causes the P&L to be loss making as there isn't any corresponding income. Then there is the general issue of Benefit in kind for the use of a corporate asset. ( Not to mention the whole issue of getting the sale proceeds out of the company without income tax. ( yes it can done but its complicated).

Hence VAT officials, firstly will seek the beneficial owner and secondly can in effect adjudicate that what you are doing falls foul of EU company law. ( note this only really applies to EU tax residents. Hence practice has been to ensure the yacht meets whatever commercial coding is necessary in the flag state to "justify" the corporate wrapping.

Ask yourself this, what legitimate reason could there be to wrap a purely leisure vessel in a corporate structure.

Dave

[goboatingnow]

Originally Posted by HBird

yes the problem is us, we wanted to live onboard but we only have the 90 days and then we have to flight back home and wait another 90 days ...we will change our sailing plans definitely.
Thanks

you can of course overstay, many do. traditionally it has not been a problem, it is however becoming more of a problem as economic conditions have meant a tightening up of overstays.

Dave