Paying Boat Purchase Tax again

[ausnp84]

Originally Posted by goboatingnow

Vat is accounted for on

Sale
Purchase
Export
Import

The rules are goods returning after 3 years are imports = import tax = VAT

don’t like it. Write your MP

And waste the time, ink and paper? Hardly. I can now appreciate why so many sail out of the UK and stay down in the Med, and look forward to doing the same once restrictions lift.

Hopefully the OP either does the same, or works out a way to circumvent such ridiculous and greedy rules.

N

[goboatingnow]

Originally Posted by ausnp84

And waste the time, ink and paper? Hardly. I can now appreciate why so many sail out of the UK and stay down in the Med, and look forward to doing the same once restrictions lift.



Hopefully the OP either does the same, or works out a way to circumvent such ridiculous and greedy rules.



N

The same rules apply in the Med !!

In fact U.K. boats ( ie boats currently in the U.K. ) must leave the EU before the 18 month vat clock runs out
Not forgetting that U.K. crew only have 90 days in the Schengen area now. !!

[Montanan]

Originally Posted by goboatingnow

Vat is accounted for on

Sale
Purchase
Export
Import

The rules are goods returning after 3 years are imports = import tax = VAT

don’t like it. Write your MP

( note you can of course arrange a much longer RTR grace period on agreement beforehand with customs. , hence in reality nobody gets hit with RTR on a yacht )

So spot on.

Geez this is no different than any other traded good or service. Why would a boat be provided some unique status?

These are just straight up privilege taxes, enjoy the privilege. If you don't like the tax then don't exercise the privilege of the right to engage in one of the four transactions. No one is forcing you to perform the privilege.

And it is only money and a mere fraction of the value of the good, albeit decidedly higher fraction in the UK / EU then in the States.

But then there are no sales or use taxation, or VAT type taxes on anything in Montana. We are not charged by the State for the privilege to sale, use, or purchase, albeit there may be a tariff duty imposed by the Federal government but not sales / use or VAT imposed by the US Federal government.

As to RTR, anyone who departs and does not make simple prior tax planning arrangements and then has to pay upon return, well that is just plain ignorance or stupidity and you get to pay for exercising one's privilege to be ignorant or stupid. The Revenue Agents will be glad to accept a second or third payment.

[Hygge in MS]

If you buy a used sailboat and register it in Mississippi, there is no sales tax, at all, ever. The purchase has to be from an individual and not a company or 'dealer'. Registration was around $45 for two years. If you move it to FL or other states inside of two (maybe three) years from date of purchase, they may go after the unpaid sales tax. If you buy a new boat and register it in MS, you are taxed at the current sales tax rate.

[C420sailor]

Come over to the other side of the pond and help us Yanks toss some tea in the harbor

[AndieKay]

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'm not one for advocating tax avoidance, lord knows my tax bill is bumped up by our ruling classes aversion to paying their fair share, but in this case I would simply fail to inform HMRC. I've literally never heard of anyone actually paying the VAT again after cruising. A bill of £10k> will kill many a plan to go off sailing.

By the way, this is a new directive from the Tory government. Previous UK governments never applied the rule to cruisers.

[GBR134]

The UK VAT proposal is quite barking mad. As you have 3 years to return to the UK after Brexit day it has yet to be applied. I doubt it will be!

I haven’t studied it in detail but I understood that it applied to UK VAT paid boats that were outside UK waters on Brexit day. I haven’t seen a suggestion that it would apply to yachts leaving after Brexit day.

Seems impossible to police. My boat was UK built, sold and registered in 1981. It left the UK in 2017 but has remained UK registered ever since. It is currently in Morocco stuck due to Covid entry restrictions.

At some point in the future it may return to UK waters and I’ll go to court first before I pay VAT on it again. There is no precedent with any other UK VAT paid goods being liable for a second round of VAT when returning for an extended period abroad provided you have proof of original UK VAT paid status. I suspect (hope) that this issue will be resolved.

[Joh.Ghurt]

Originally Posted by Jeannius

Yet another 'benefit' of leaving the EU. While we were in the EU Returned Goods Relief was not time dependent. If you took the boat out you could bring it back.

Your optimism is misguided. In the EU the returned goods relief was always time dependent with 3 years standard. Check the first paragraph of the Irish version. For special circumstances you can extend this period, but by default the UK and EU rules are pretty much the same.

There are enough other ways the Brits shot themselves in the foot with Brexit, no need to add untrue ones.

[Joh.Ghurt]

Originally Posted by GBR134

The UK VAT proposal is quite barking mad. As you have 3 years to return to the UK after Brexit day it has yet to be applied. I doubt it will be!

It makes a lot of sense from a logical point of view. While the UK was part of the EU, any boat in EU waters was part of the UK VAT zone. Only with Brexit-day, the boats left the UK-VAT zone, not by themselves moving but more by the proverbial rug being pulled from under them. Now for the UK, the clock starts ticking.

The interesting points under discussion is at which date the ticking starts (December 31st 2020 or January 31st 2020)

It seems the reasonable choice for Brits is to return to the UK at least once in the next 2 years to prevent losing UK-VAT paid status. As it is today, the EU-VAT status isn't transferable unless there UK and the EU come to an accord.

Leaving EU waters in the Mediterranean isn't that hard for a cruiser for one day to reset the temporary importation. I the Western part, Gibraltar, Melilla and Morocco are close by, in the Eastern part Turkey is worth a trip and in the Adriatic Montenegro, Albania or Bosnia will do.

[CaptainRivet]

Well the procedure and rules for 3 years Periode in EU water is the following:
A) Eu VAT paid
B) Customs officer asks if boat was in EU waters in the last 3 years, your answer is yes
C) Customer Officer accepts this, your done. He doesn‘t accept it and asks for proof.
D) wrong answer is „I don‘t have to proof anything“...yes you are right the tax officer has to proof this but easy for him to declare you were out during 3 years...forget this route, you loose and pay a big bill...
E) instead smile and you present a bill 2 or 2,5 years old that proofs you were on one day in EU waters...very „handy“ is a Harbour bill or a hand written bill from a Greek traverna stating bill includes staying on the traverna‘s pontoon over night with your boat „name“ and registration number...or switch your AIS on, go to marinetraffic and print out the page with your location. Always put it this one „bill“ to your insurance paper when going for doing paper work on land...done
F) rules states you have to proof you were in EU Waters during 3 years, to proof one day during this 3 years is fully enough...don‘t do the mistake and bring your old logbook....also don‘t do the mistake and talk too much and if custom officer ask where you have been during this 3 years tell him „it’s so much that I can remember details“...if he continues just tell him „sorry madame/sir don’t wanna be rude but this is private and I had proof you I was in EU waters during last 3 years with my boat“. The less they know the better, but always be super friendly!
G) if you circumnavigate there is always an Eu territory somewhere to get into 3 years Periode, plan it into your route :-) or if you cannot have a buddy boat that organises you a bill for a part from the local ship chandler on this island...and keep that.

Trap/fools:
1) fool/trap No1: the EU waters you are in must belong to the EU custom zone...eg Canary Islands or eg St. Martin is EU but NOT EU tax zone! Means you are out of EU waters taxwise :-( so doesn‘t count as in Eu waters...
2) AIS sending default mode is switched off! Only switch it on when you are in EU waters or security really requires it eg street of Gibraltar....otherwise big brother is watching you constantly and can proof anything with a quick look in marinetraffic. That your friends, relatives and a 4 th pair of eyes during passage on land can follow you you can use eg the fully private tracking in your iridium go, eg advance tracking which still works when you put your iridium subscription on hold and just pay 9 Euro a month for that. My buddy boats get that too and my identifier so they know where I am...
3) returning into EU waters I suggest your logbook contains only last year backwards (means quite close to EU waters, all others send home via Mail or into trash) just in case custom looks for drugs and just has a quick look in your book and see you weren’t in EU water the last 3 years...same with maintenance bills, just last year on board....if your maintenance log has the location stated, erase just the location...it doesn‘t matter where it was done, it’s done and off your list till next scheduled time or incident.
4) make sure your waterline fits when you entering EU waters, a strong indicator that boat is loaded up short time ago with something eg drugs from customs view and you are on the list for further investigation....or you have a quick proofable explanation why you are loaded up with what and why waterline doesn‘t fit now when the custom officer approaches you. Communicate this proactively!

If you follow this and don‘t own a multimillion dollar megayacht (where a lot more money can be collected and further investigations is likely) then all is fine in practice regarding VAT.
The average cruiser with his 50 till 300k cruising boat or cat is not that interesting and low money for a lot paperwork except your cross some red flags, piss them off or deliver strongindication you could be a tax case....

[Joh.Ghurt]

Originally Posted by CaptainRivet

G) if you circumnavigate there is always an Eu territory somewhere to get into 3 years Periode, plan it into your route :-) or if you cannot have a buddy boat that organises you a bill for a part from the local ship chandler on this island...and keep that.

Careful, if you circumnavigate the western most places in the EU-VAT zone are the Azores and Madeira. Everything else outside continental Europe isn't EU-VAT zone. This is specially annoying for the the French overseas departments. Martinique, La Réunion, Guadeloupe are all part of the customs zone, but not the VAT zone. Same goes for the Canaries. The Dutch territories in the Caribbean aren't part of the EU, just like Greenland isn't.

I'd be interested in anyone having actual experience with getting an extension from the local taxman for returned goods relief before leaving. How easy is this in reality?

[CaptainRivet]

Originally Posted by Joh.Ghurt

Careful, if you circumnavigate the western most places in the EU-VAT zone are the Azores and Madeira. Everything else outside continental Europe isn't EU-VAT zone. This is specially annoying for the the French overseas departments. Martinique, La Réunion, Guadeloupe are all part of the customs zone, but not the VAT zone. Same goes for the Canaries. The Dutch territories in the Caribbean aren't part of the EU, just like Greenland isn't.

I'd be interested in anyone having actual experience with getting an extension from the local taxman for returned goods relief before leaving. How easy is this in reality?

Where do you get the information there is a EU custom zone and EU VAT zone?
You are in EU custom zone, then you pay VAT or you are out and you don't.
Canaries is definitly out of EU custom zone but part of EU union.
same applies to Martinique, La Réunion, Guadeloupe are out of EU customs zone...


if you are from the UK , be happy you can now ask for VAT excemption for 18month and then 1 day before it expieres leave and a day later come back for another 18month and no hassle with VAT. I am german but swiss residency. Cat is VAT paid and german flag, when I come back from my circum it will be Delaware and I ask for excemption too...if i am back...
or I stay close to EU water and fake a solution...only possible if your AIS was on receiving only....
know many EU boats which were 5 year or more out of EU and came back to EU without any hassle and VAT questions...
just be calm, stay under the radar and don't show customs any hint like above described you are good with your 100k cruiser...

which small greek island marina keeps their record for 3 years..ähm sorry which record :-)

[Montanan]

Originally Posted by CaptainRivet

[B][SIZE="4"]Where do you get the information there is a EU custom zone and EU VAT zone?

You are in EU custom zone, then you pay VAT or you are out and you don't.

Incorrect.

Canaries is definitly out of EU custom zone but part of EU union. The Canaries are part of the EU Customs zone but not the EU VAT zone
same applies to Martinique, La Réunion, Guadeloupe are out of EU customs zone...
Incorrect again, Martinique, Reunion, Guadeloupe, Saint-Martin, French Guiana, Mayotte are all part of the EU Customs zone but not the EU VAT zone.

if you are from the UK , be happy you can now ask for VAT excemption for 18month and then 1 day before it expieres leave and a day later come back for another 18month and no hassle with VAT. I am german but swiss residency. Cat is VAT paid and german flag, when I come back from my circum it will be Delaware and I ask for excemption too...if i am back...
or I stay close to EU water and fake a solution...only possible if your AIS was on receiving only....
know many EU boats which were 5 year or more out of EU and came back to EU without any hassle and VAT questions...which small greek island marina keeps their record for 3 years..ähm sorry which record :-)

Reference link:

Territorial status of EU countries and certain territories

https://ec.europa.eu/taxation_custom...territories_en

[CaptainRivet]

Originally Posted by Montanan

Reference link:

Territorial status of EU countries and certain territories

https://ec.europa.eu/taxation_custom...territories_en

ok thank you.
thats new to me that you are in EU custom zone and there is an additional VAT zone...sucks big time.
So I will find a solution where my MMSI shows regularly up in EU waters...well so be it and regularly visiting Madera and Azores...

[Joh.Ghurt]

Originally Posted by CaptainRivet

Where do you get the information there is a EU custom zone and EU VAT zone?

Here's the official description from the EU itself: https://ec.europa.eu/taxation_custom...territories_en

Originally Posted by CaptainRivet

You are in EU custom zone, then you pay VAT or you are out and you don't.

Canaries is definitly out of EU custom zone but part of EU union.
same applies to Martinique, La Réunion, Guadeloupe are out of EU customs zone...

This assumption is good enough in general, but when dealing with fringe cases, the details might make a difference. The Canaries are such a case (Custom zone but not VAT-zone), Monaco is another one in the opposite direction (not part of the EU but part of the EU-VAT zone for import/export).