Paying Boat Purchase Tax again

[sepharad]

Originally Posted by jen1722terry

Gees, I never thought of this issue.

I wonder if it applies to Canada?

We're Yanks from NH who brought our boat to our other home in Nova Scotia in '14 and returned it to the US in '16. While in Canada, we paid the import tax and kept the records. Our understanding was that we are now free to take the boat back and forth to Canada whenever we choose.

Now, with covid and all, it's been nearly 5 years since the boat was in Canada.
If we're allowed to sail to Canada this year, do we have to pay the tax again?

I better get on the phone to Canadian customs.



17 days to dump.

Cheers

Each country is different. Canada is commonwealth and not EU so will be completely different. Definitely check on it. You might make a post and see what our Canadian brethren and sistren say. I suspect it is far less bureaucratic than the EU.

[sv_pelagia]

"Commonwealth" is irrelevant (for Canada taxation).

In Canada, we pay a 1-time tax when we purchase a boat (GST or GST&PST or HST, totalling 5-15%, depending on your province.) If you leave Canada and return years later, you don't pay it again.

[Pete7]

Originally Posted by sepharad

Now that the UK has Brexited, every European coast guard will be gunning for them when they are in EU waters. You need to have proof of location and VAT paid at all times..

The EU will have no interest in a UK yacht that is just visiting.

[Joh.Ghurt]

Originally Posted by Brewgyver

??? And how would that possibly work? Ever hear of a Hull ID number?

Not all ships have an hull id number. How I know? Mine doesn't. As soon as you get into individual builds or small series some 30+ years old, you might not have one. My engine at least has an engine number, because it's marinised car engine. Only because most series boats have it doesn't mean it's universal.

[Gadagirl]

In the US each state has their different tax rates and caps on sales tax. But opposite of the 1% personal property tax that was reported statewide for California, my state, Virginia, it depends on which county the boat is registered as to how much yearly pesonol property tax that you owe. Several counties along the Potomac and Chesapeake don't charge personal property tax on boats. Because they want to encourage the land based business that supports them. Others do charge. So it depends on where you keep the boat if there are additional personal taxes levied on your your boats worth. So a person wanting to minimize their expenses need to seriouly consider where they plan to keep their boat not only by state, but also by county.

[C420sailor]

Virginia does have annual personal property tax, but you save so much more in other areas (income tax, real estate tax, etc) that you end up way ahead of states like NY, CA, etc.

I don’t have my boat in VA, but I have my airplane there (long story). I paid 2% of book value when I bought it for sales tax. Every year I pay $5 registration and about $55/yr in ‘personal property tax’. Cheap!

[Gadagirl]

Originally Posted by C420sailor

Virginia does have annual personal property tax,

Again, it depends on what county your personal property resides. There is 0% personal property tax on boats that reside in Prince William, Stafford, Westmoreland, counties. And in Hampton and I believe Newport News and Virginia beach, and Urbana. And probably more that I'm unaware of.

There is personal property tax on cars universally throughout the state. I'm not aware of any county that exempts personal property on cars. I have no idea on personal property tax on private planes.

I know people that kept their boats in countries away from the county where they lived, for the purpose of avoiding the personal property tax on their boat.

[David B]

Originally Posted by Creedence

20% is unimaginable (to say nothing about the idea of paying that TWICE after a 3-year trip) the thought of it makes me want to go dump some tea in Boston Harbor.

And in the EU (read most of the Med these days) it can be up to 25%!

Another reason why thousands of boat owners over there don't pay it.

[David B]

Originally Posted by C420sailor

That’s insane.

Agreed - especially when it can be as high as 25%!
Many refuse to pay it - understandably!

[David B]

Originally Posted by RogerLloyd

In the UK if I take my boat out of the country for more than 3 years, I have to pay VAT (Value Added Tax) [like purchase tax] again when I return to the UK. If I sail away for more than 3 years again, I get charged another lot of VAT.

(The EU has this sort of system, but then the waters of the EU are a bit more extensive than the comfortable sailing waters of the UK. So this multiple VAT situation is less onerous for EU residents.)

Does America have the same sort of system for paying multiple VATs ?

There are so many thousands of boat-owners that just don't pay the tax - preferring to leave the country (easy in the EU/Med) for a few days, months etc.
We have been considering paying as the value of our boat slowly falls, and therefore the VAT decreases accordingly, but as an example, we sailed to Montenegro in 2019, and due to the China virus, will not be able to return until 2023. so if we had paid, then we would be stuck without even leaving the Med!.

VAT is one thing - we all have to pay our way. but to charge the tax again! We have decided not to for that reason alone.

[Lepke]

In the US, we had a revolution over taxes. Maybe you need one, too.

[Anders]

Originally Posted by RogerLloyd

In the UK if I take my boat out of the country for more than 3 years, I have to pay VAT (Value Added Tax) [like purchase tax] again when I return to the UK. If I sail away for more than 3 years again, I get charged another lot of VAT.

(The EU has this sort of system, but then the waters of the EU are a bit more extensive than the comfortable sailing waters of the UK. So this multiple VAT situation is less onerous for EU residents.)

Does America have the same sort of system for paying multiple VATs ?

I have never heard of anyone actually having to pay VAT after returning for more than 3 years. Do you know of any case where that has happened?

[more]

Originally Posted by David B

We have been considering paying as the value of our boat slowly falls, and therefore the VAT decreases accordingly, but as an example, we sailed to Montenegro in 2019, and due to the China virus, will not be able to return until 2023. so if we had paid, then we would be stuck without even leaving the Med!.

VAT is one thing - we all have to pay our way. but to charge the tax again! We have decided not to for that reason alone.

On end I pay tax on my boat Bavaria 38 2004 when before 5 year engine volvo Penta d2-55 clutch fail. i disconnect MDI black box. pay survey,he writes boat valid 25000€ taxman say 30000€ i say ok and pay 7500€
now market price for this boat is with vat around 65-70000 €
Before boat be registered on the company and I return vat. But this is a pain in the ass. You are not totally free to use boat and a taxman after crisis 2008 watches on a company boat like a hawk,

[Joh.Ghurt]

More,

you're not alone doing it this way. Simplistic people believing there's only one way to interpret the rules are the ones getting caught.

[goboatingnow]

Most of what’s written here about EU vat is nonsense

The proper term is returned goods relief. You are automatically entitled to return the goods ( any goods ) back into the EU within three years without import vat being assessed.

This is provided no change of ownership has occurred outside the EU or significant increase in the value of the goods has occurred

Importantly , by agreement with customs in advance you can extend the return period considerably.

This thread is scaremongering as in praxtice its impossible for customs to determine how long a given EU boat has been out of the EU, as there is no specific boat exit or entrance process in the EU per se. Equally customs simply don’t care.

Comparing different countries taxes by “ cherry picking “ particular ones is rather useless.

I pay €100 a year in property tax let’s compare various property taxes in the US

Then let’s compare the cost of sending the offspring to a good university. !!

Etc etc.

Vat by the way is not a sales tax. It’s more correctly a transaction tax. It’s accountable every time goods are sold purchased , exported or imported.