European VAT on '83-and-Older Vessels?

[goboatingnow]

is your boat VAT paid and are you in European waters

if you are refering to me, then yes and yes and I have 28 years in inter community trading including commercial yachts. ie both VAT and non-VAt paid boats coming in from inside and outside the EU

Customs officiers can be good, bad or indifferent. In my first hand experience, people that have VAT problems where trying something dodgy.

As in your example there is no problem, if you buy your boat in Turkey, and you are a EU tax resident, the minute you sail into a EU port, VAT is due, end of story no buts. ( note that Turkey now has a Customs agreement with the EU, if you buy your boat in Turkey from a turkish dealer and you fill in all the complicated forms and get pre-approval from customs, the boat is regarded as in free circulation and VAT is not due when entering the EU, but its complicated and not for discusion here),

This is why I write this blog and have this discussion ; I have no intentions to take my boat (currently in USA) to Europe till I am 100 % clear on custom issues.

you write a blog , ??

The main reason that the issue is unclear is that most posters have no idea really what they are talking about or relate what happended to them and there experience is specific to their circumstances, which sometimes they arnt truthful about. The other is what "people have Heard" or other nonsense. Reallu unless someone is prepared to come on here and debate first hand their VAT issues, the rest is hearsay. In my first hand experience, people that have VAT issues, were trying something dodgy.


The situation regarding VAT in the EU is very very clear. In you are a not a EU tax resident ( irrespective of citizenship) and your boat is not in the EU, then you have a generous 18 months under the Temporary Importation Relief scheme in which to sail around teh EU before VAT is due. TI can be extended under local rules to 24 months and where specific country rules allow can be extended further ( usualy with lots of conditions)

Simple end of story, vist the EU anytime no problems


If you are a EU tax resident, then immediately on entering the Customs Union of the EU , VAT and customs duties are immediatley payable ( well they will give you eough time to get to a bank). You pay the VAT at the first EU port ( though Customs can agree to allow you to travel to your destination port , as "new means of transport", which your boat is, VAT is technically only paid in the country of destination, not arrival) VAT is calulated on the financial value of the boat, so depreciation is allowed, but you have to reach an agreed value with customs.

Simple.

Case 1 no_VAT for 18 months, Case 2 pay VAT immediately, thats all you need to know for the usuall straightforward cases

Again end of story -> simple.

[barnakiel]

Just a reminder - the VAT issues are same within the EU Vat region (which happens to include the Azores but somehow not the Canaries).

So if planning something VAT related PLS check the status of a particular place regardless of what EU flag you see the first thing in your first EU port.

Just saying this because I meet so many EU and otherwise sailors who are so so so very unhappy (like many ARC participants that starts from Gran Canaria) to pay VAT / tax on boat goods imported to Canary Islands from continental EU (in fact - one can at times dodge the tax by marking the parcel 'boat in transit, still a customs clearance agent is often required to receive the parcel which costs quite a lot of $EUR).

So, BEWARE!

b.

[andreavanduyn]

This is what we all need to know ; clear answers from knowledgable people who can help well willing idiots like myself in this complicated changing but very important issue.

Thanks both.

[goboatingnow]

Just a reminder - the VAT issues are same within the EU Vat region (which happens to include the Azores but somehow not the Canaries).

There are many special territories in the Customs Union of the EU that have special status, The Canaries being one. ( see Wiki for the list). If you import into the Canaries they simply will not collect the VAT, but it is then due on arrival at the non-special EU port and the clock has been running since the canaries.

Just saying this because I meet so many EU and otherwise sailors who are so so so very unhappy (like many ARC participants that starts from Gran Canaria) to pay VAT / tax on boat goods imported to Canary Islands from continental EU (in fact - one can at times dodge the tax by marking the parcel 'boat in transit, still a customs clearance agent is often required to receive the parcel which costs quite a lot of $EUR).

Yacht in Transit has no offical meaning or tax status. Its an old situation that predates VAT and harmonised EU rules. There is no duty free between EU states anymore so Yacht in Transist is invalid. However it never hurts to mark it so as some customs agents predate VAT as well.!!!. I;ve had lots of cases when vat WASNT charged when it actually should have been and I went away chuckling and drank the VAT

Shipments to the canaries should not include VAT, ie they should be bought by anyone in the canaries VAT free, However many companies, because of fear of of their countries VAT regs, often will not deduct the VAT. This is because the VAT registered seller remains always responsible for VAT, not the buyer. MOst EU countries revenue services tell their traders "if in doubt charge VAT" and that what most do. Thats why it can be difficul to get the VAT dropped on shipments to the canaries, even though its the law.

Yes I did the ARC and yes we had to bring lots of repair gear, and yes the canaries can be a headache, much better then it was a few years ago though because now you have fedex, DHL etc and they have smoothed things out

[boatman61]

Xpets... OK been there done that.... VAT is applicable on ANY boat bought abroad and imported to Europe if the intention is to keep it there permanently.
This applies to all foreign built boats.
If the boat was built in an EU State and has been in 'foreign waters' for more than two years it once again falls liable for VAT.... unless it has a valid exemption certificate issued by the Customs of its Home Country.
The wise thing to do is pay the VAT in the Azores where it is 15%... lower than most other places... Madeira is 6% and the Canaries 10% but you have to prove residency to qualify.
A further new law that was brought in a couple of years back is if it is your intention to re-sell the boat once imported it is a criminal offense to sell it without a valid CE certificate... this can cost at least 10,000 to 15,000 pounds in the UK as the boat has to be lifted and surveyed by a certified CE surveyor and all findings and recommendations MUST be complied with... in other words she has to meets the same regs as a 2010 production boat.
If its your intention to keep the boat no problem... till you decide to sell..
If you want to avoid VAT payment be a live aboard with no property ashore... if its your home your exempt.
Alternatively all foreign vessels have 18mths in European waters before becoming liable for VAT, flag her somewhere like Anguilla before sailing to Europe... go for a sail before the time due and spend a couple of months in a non EU country... perfect if your based in the Med.... winter in Tunisia... job done.
The old days of buying cheap abroad and selling high in Europe are over... they wised up.... but as I said above there are still loop holes if OWNING the boat is your intention....
Hope your a bit wiser...
Phil

[MoonlightShadow]

Or could you maybe import to The Channel Islands or some such place and just "visit" the rest of Europe? David would know more about that.

Another issue is CE Marking and testing depending upon the age of the boat.

[barnakiel]

Well, it is not just the VAT. The VAT applies, or not, once you re-register.

If your boat is US flagged (which is my guess) then once you take her in she will be on TI (Temporary Import) so the VAT does not apply at this stage. Once you re-register from the US to a EU-state then the TI stops to work for you but some nasty things come into picture - like the VAT / non-VAT question.

The VAT / pre-VAT relates to boats build in the EU and present in the EU on a specific date. So, if you take a pre-Vat boat in, you will stand a chance of avoiding the VAT only if the boat is pre-Xyear, was built in the EU and was present in the EU on a specific date. The X-year moves as different countries joined the treaty / Union at different years.

b.

[boatman61]

Moonlight... nope that wont work... need to be resident in the Channel Isles.
As for CE marking age is irrelevant if your importing and plan to sell sometime.
it has to meet and pass EU Safety requirements.... or follow my only recourse when I ended up having to sell Moondance my Hunter 37 as a "Project Boat" at cost to avoid any come backs.
Basically its a means of supporting the EU boat industry by making it un-viable to buy abroad.
More (post 2000) modern boats built in the States by Beneteau and other EU company's now comply and are CE marked

[goboatingnow]

Originally Posted by boatman61

Xpets... OK been there done that.... VAT is applicable on ANY boat bought abroad and imported to Europe if the intention is to keep it there permanently.
This applies to all foreign built boats.
If the boat was built in an EU State and has been in 'foreign waters' for more than two years it once again falls liable for VAT.... unless it has a valid exemption certificate issued by the Customs of its Home Country.

nonsense, Returned goods Relief, which is the proper name for what you are talking about is by conventional available for three years, and is easily extendable alomost indefinity, once there is a valid reason, the exporter MUST be the re-importer ie ownership cannot be changed while outside the EU, and the boat cant be substantially changed or "improved" and there is no "excemption certificate", before you export , ie sail away, you can fill out a ATA carnet and have it stamped this is all it takes.

The wise thing to do is pay the VAT in the Azores where it is 15%... lower than most other places... Madeira is 6% and the Canaries 10% but you have to prove residency to qualify.

the BS continues, by law VAT on "new means of transport" is paid in the country of "destination". for an EU citizen this normally means their home country. You "may" be able to convince say the German VAT people that you live or keep the boat in the Azores or that you have a "ecomonic presence" there. Or you may not. if not you will pay VAT again in your home country.

BTW by EU law VAT cannot be below 15% except for items that were negioated by that countries accesion treaty into the EU, usually things like food, books etc have special low rates NOT BOATS. Madeira has a special VAT rate approx 30% below portugals, MADERIA now has a 14% VAT rate.

The Canaries is not within the VAT area of the EU hence VAT does apply ( where did you get 10%), There is a local tax IGIC of 4.5 % and this has nothing to do with residency. if you leave you boat in the canarys you pay no further taxes (unless you have spainish tax residency) but if you move the boat to the EU proper you will have to pay VAT immediately.

A further new law that was brought in a couple of years back is if it is your intention to re-sell the boat once imported it is a criminal offense to sell it without a valid CE certificate... this can cost at least 10,000 to 15,000 pounds in the UK as the boat has to be lifted and surveyed by a certified CE surveyor and all findings and recommendations MUST be complied with... in other words she has to meets the same regs as a 2010 production boat.
If its your intention to keep the boat no problem... till you decide to sell..

more mis-information. You are required to obtain CE certification ON IMPORT. (ie when the goods are placed in the EU market for the first time, and the act of importation is such a placement), it applies to all boats IRRESPECTIVE of age. There is a concession that if you build the boat yourself you do not need CE certification as long as you keep it for 5 years. Note that build it yourself means exactly that, you cant contract out the hull or have professionals build parts of it. if so they must CE cert the bit they do. Note that CE certification is not primarily about safety, more about a consistent and documented build quality system. the importer remains liable forever for CE liability and penalties, selling the boat does not pass on the liability

If you want to avoid VAT payment be a live aboard with no property ashore... if its your home your exempt.

absolute nonsense, firstly zero vat rated on residential "ships" is purely a UK and Ireland issue as a result of their accession treaty. The UK customs and excise did loose a case some time ago, but each case will be dealt with on its merits, citeria are applied very very tightly and the boat must have no element of "pleasure" use associated with it. Its not an automatic entitlement.

Alternatively all foreign vessels have 18mths in European waters before becoming liable for VAT, flag her somewhere like Anguilla before sailing to Europe... go for a sail before the time due and spend a couple of months in a non EU country... perfect if your based in the Med.... winter in Tunisia... job done.

the OP is an EU citizen , temporary importation rules DO NOT apply to EU citizens(or more correctly EU tax residents) irrespective of the "FLAG" of the vessel.Customs takes the beneficial owner of the vessel into account not its meaningless flag. TI for non EU tax residents is 18 months extendable to 24 with further extensions a function of local customs regs ( see bonding). remember that non EU citizens or those not on long term work or study visas cannot stay in the EU area ( schlengen area) for more then 90 days in any 180 ie 90 days in the whole of the EU collectively excluding the UK & Ireland. The boat canstay for 18 months you can only stay for 90 days ( as a general rule).

The old days of buying cheap abroad and selling high in Europe are over... they wised up.... but as I said above there are still loop holes if OWNING the boat is your intention....

certainly not with your knowledge!!.

[goboatingnow]

Originally Posted by barnakiel

Well, it is not just the VAT. The VAT applies, or not, once you re-register.

If your boat is US flagged (which is my guess) then once you take her in she will be on TI (Temporary Import) so the VAT does not apply at this stage. Once you re-register from the US to a EU-state then the TI stops to work for you but some nasty things come into picture - like the VAT / non-VAT question.

The VAT / pre-VAT relates to boats build in the EU and present in the EU on a specific date. So, if you take a pre-Vat boat in, you will stand a chance of avoiding the VAT only if the boat is pre-Xyear, was built in the EU and was present in the EU on a specific date. The X-year moves as different countries joined the treaty / Union at different years.

b.

The flag state of the boat is not what triggers the end of TI, flag is not considered by customs for pleasure boats, they consider the status of the beneficial owner. A US tax residence can bring a say UK flagged boat into the EU and righly claim TI priviledges.

[goboatingnow]

Originally Posted by boatman61

Moonlight... nope that wont work... need to be resident in the Channel Isles.
As for CE marking age is irrelevant if your importing and plan to sell sometime.
it has to meet and pass EU Safety requirements.... or follow my only recourse when I ended up having to sell Moondance my Hunter 37 as a "Project Boat" at cost to avoid any come backs.
Basically its a means of supporting the EU boat industry by making it un-viable to buy abroad.
More (post 2000) modern boats built in the States by Beneteau and other EU company's now comply and are CE marked

sorry to inform you boatman, if you imported your hunter without CE certification, you remain liable for this fault for the all time. subsequent owners/or the relevant legal authorities could sue you at any time into the future. the penalties are fines upto 200000 or 5 years in jail. you cant "pass" on CE liability.

[barnakiel]

Originally Posted by goboatingnow

The flag state of the boat is not what triggers the end of TI, flag is not considered by customs for pleasure boats, they consider the status of the beneficial owner. A US tax residence can bring a say UK flagged boat into the EU and righly claim TI priviledges.

Well, this I did not know. What is the legal source of this rule? Where can we read on this aspect? THX

barnie

[goboatingnow]

this was explained to me by a customs official, in that while the main legislation states the vessel must be registered outside the EU ( or not registered at all). There is also a further article that allows the TI new means of transport to be temporarily registered as long as its clearly destined to be re-exported following the period of discharge.

hence as it was explained to me, if a non eu person need to register it in the EU for the TI period because that was a requirement ( for example an insurance , competition or financial requirement, that is allowed as long as the custom official is satisifed that the vessel will be exported.
of course the main condition is the owner is non EU tax resident.

obviously like all eu directives its the customs man on the spot that decides

[goboatingnow]

sorry my english in the first post was sloppy, it can be registered after bringing it in. not before. In practice few private boats are eu registered without showing VAT paid status, so its doesnt arise anyway

[boatman61]

I know that but so did the buyer and he was aware of the situation as I had explained it to him and had it confirmed by a Broker i knew, he went in happily with his eyes open. He planned to spend the next couple of years custom fitting the boat on shore till the kids were in college before he and his wife started cruising and getting the CE was costed into his plans so all commitments to the authorities were met in the long run.... and lets face it, how often does a 1984 37ft blue water boat become available in the UK for less than 15k.
I could not afford to CE it, I had not known it was coming in and arrived in the UK the day it came in to force.....24 hrs earlier and all would have been well.... it would not have applied.
On the whole I thought we were both pretty lucky to find each other at the time..... I have since wished I'd kept her and found a way to resolve the problem coz she was a great boat that had seen me safely through some heavy conditions....but at the time panic set in and I decided it was best to cut my losses....
**** happens....One is often wise.... after the fact