boat discount if i can pay some of the sum by cash by hand

[ers61]

hi, i'm in the process of buying a boat now and one of the sellers (which is a charter company in europe) offered me discount if i can pay some of the sum by cash by hand / private account. I'm not in EU and I know that there are some TAX exemptions on the boats if sold outside the europe but I don't understand the point of having part cash. I guess I'll receive a bill less then the actual amount but my questions are:

1-Is it safe to do ? How should be the agreement ?
2-Will this have any side effects later on me later ? Like lower invoiced amount of the boat?
3-What is the financial benefit of this to the seller ? how much do they save ?

thanks.

[StuM]

Two scenarios:


1. The person you are dealing with is ripping of his employer.
2 . The company is ripping off the taxman.


Both are illegal, immoral and pose possible risks to you.

[billknny]

Originally Posted by ers61

hi, i'm in the process of buying a boat now and one of the sellers (which is a charter company in europe) offered me discount if i can pay some of the sum by cash by hand / private account. I'm not in EU and I know that there are some TAX exemptions on the boats if sold outside the europe but I don't understand the point of having part cash. I guess I'll receive a bill less then the actual amount but my questions are:

1-Is it safe to do ? How should be the agreement ?
2-Will this have any side effects later on me later ? Like lower invoiced amount of the boat?
3-What is the financial benefit of this to the seller ? how much do they save ?

thanks.

I assume when you say they want the cash transferred "by hand" they want actual physical currency to change hands. Usually, this is done to avoid paying taxes on some, or all, of the cash money transferred, or to "launder" cash from an illegal source.

I don't know what the rules are in Europe, but in the USA large cash transactions (Typically >$10,000) are not illegal, BUT they do require special reporting to control money laundering and tax evasion. Be sure you understand and comply completely with the local rules for these kinds of payments, and get full and proper receipts for any cash with the amounts accurately reported.

On a large transaction like this I'd be very suspicious of anyone asking for physical cash. They are either avoiding taxes or laundering money. If they give you a Bill of Sale listing the price as lower (or higher!) than you actually paid, then you can be sure something nefarious is going on. If your tax bill is going to be based on a Bill of Sale you know to be fraudulent, then it seems you are an active and willing participant in tax fraud. If there are no local rules on cash transfers, then it is up to you if you want to participate.

For smaller things, I am perfectly happy to pay a vender in cash for a discount, and let him handle the taxes and money as he sees fit. For buying a boat, there are so many things involved, I would want the transactions to be 100% honest.

In thinking about it, buying and selling boats would actually make a pretty good scheme for laundering money since the value of an individual boat is very hard to pin down accurately, and can vary a lot from one market to another, and for reasons not always obvious.

Here is how it might work, with all numbers just made up without any logic to them, but you get the idea:

They list the boat for $500,000. They offer you a 20% discount for "cash". You pay $400,000. They give you a Bill of Sale for $500,000. They take $100,000 in cash from some illegal source, and add it to the cash you paid, and suddenly it is "clean legal" money.

Alternatively, they list the boat for $500,000. Offer you a 20% discount for cash, and you pay $400,000. They give you a Bill of Sale for $300,000, and put $100,000 in their pocket--tax free.

Of course, they COULD make up a Bill of Sale to give you, and then another one they keep that looks totally different and have whatever fun with cash numbers works for them.

[ers61]

Originally Posted by billknny

Alternatively, they list the boat for $500,000. Offer you a 20% discount for cash, and you pay $400,000. They give you a Bill of Sale for $300,000, and put $100,000 in their pocket--tax free.

I think this must be their case unless they traffic illegal drugs with their charter boats

[Tellie]

In my business I tell customers "Just like me, everybody pays their taxes"

[tarian]

This is a tax avoidance scheme , pretty common in Europe but there are risks to both parties if caught and to import it to the US
Up to you, but you are breaking the law of that country I suspect it is in the EU and tax avoidance is a hefty crime

[BrianGJS]

Unless it is an honest and legal transaction you may always be looking over your shoulder. Reducing taxes is not illegal if done in a legal manner. Different purchases may be subject to different tax rates and could be a useful and legal way to reduce the taxes due. You may want to buy a boat and a very expensive set of dishes. LOL

[Stewie12]

Very often yachts are sold of one dollar ( or whatever currency) and other considerations on the Bill of Sale, which is the document you will use to get the boat registered in your name. So long as you have a receipt for the total amount paid, as per the sales agreement, that is all that is important.

[roland stockham]

In most EU countries there are strict limits on cash transaction to prevent money laundering. This particularly applies to forigen currencies. I doubt you would be able
to draw enough cash in a european bank and bringing it through customs is smuggling and likely to land you in jail, possibly with the money confiscated.

This is also a common scam, next they will ask you to pay some of the money up front "to cover transaction fees" or some such. It will only be a small percentage but that will be in cash and as you are getting such a good deal by paying cash you will be tempted. The scammer then vanishes and the charter company that owns the boat has never heard of them. Not to say this is the case but be vary wary of untracable deals.

[GetawayMirage24]

There’s also the question of personal safety and the chance of being robbed of that large amount of cash you would be carrying, especially when you are in another country. All you need is for someone involved in or aware of the nature of the transaction to tip off the wrong individuals, and you find yourself inconveniently relieved of your cash!

[Island Time O25]

If you're buying a boat with a listed price of at least 100,000Euro or more (haven't seen too many ex-charter boats for much less than that) then you should be able to afford for a few hundred Euros a detailed consultation with a tax attorney at either the point of sale or your own country. And not to rely on the "free" advice of anonymous CF members from all over the world.

Unless this was just a troll post.

[blubaju]

Originally Posted by ers61

hi, i'm in the process of buying a boat now and one of the sellers (which is a charter company in europe) offered me discount if i can pay some of the sum by cash by hand / private account. I'm not in EU and I know that there are some TAX exemptions on the boats if sold outside the europe but I don't understand the point of having part cash. I guess I'll receive a bill less then the actual amount but my questions are:

1-Is it safe to do ? How should be the agreement ?
2-Will this have any side effects later on me later ? Like lower invoiced amount of the boat?
3-What is the financial benefit of this to the seller ? how much do they save ?

thanks.

If this is really a EU registered charter company, they most likely did not pay tax (VAT) as it is operating investment. If they sell this yacht outside EU (even a EU-citizen permanent resident outside), it is considered export and taxfree. Your obligation to care for your local home-tax.

In your position no care for VAT. But be careful on the correct procedure.

Other topic is the sellers income tax, as owned by a company, any additional money flocking in will raise income tax, depending on overall wealth, this might reach 55%, but 0% if they had a bad year or large investment, they will not tell you.

As they want part in cash under the hand they want black money, as somebody wrote above, an employee cheating his boss or a boss cheating Dept of Finance. As for export there is no VAT due, somebody wants to cheat you on that.

Above is general EU regulation, local exemptions regarding "luxury tax" do exist.

[Augi]

Originally Posted by ers61

hi, i'm in the process of buying a boat now and one of the sellers (which is a charter company in europe) offered me discount if i can pay some of the sum by cash by hand / private account. I'm not in EU and I know that there are some TAX exemptions on the boats if sold outside the europe but I don't understand the point of having part cash. I guess I'll receive a bill less then the actual amount but my questions are:

1-Is it safe to do ? How should be the agreement ?
2-Will this have any side effects later on me later ? Like lower invoiced amount of the boat?
3-What is the financial benefit of this to the seller ? how much do they save ?

thanks.

I wouldn't buy a boat from some one that you can be 99.99% sure is not honest. I also don't hire anyone to work for me that is cheating on their spouse(without he / her knowing), or is cheating on their taxes.

[slug]

Originally Posted by ers61

hi, i'm in the process of buying a boat now and one of the sellers (which is a charter company in europe) offered me discount if i can pay some of the sum by cash by hand / private account. I'm not in EU and I know that there are some TAX exemptions on the boats if sold outside the europe but I don't understand the point of having part cash. I guess I'll receive a bill less then the actual amount but my questions are:

1-Is it safe to do ? How should be the agreement ?
2-Will this have any side effects later on me later ? Like lower invoiced amount of the boat?
3-What is the financial benefit of this to the seller ? how much do they save ?

thanks.

Sounds like the broker would like to take his commission in cash

Don’t play the cash game

All EU countries are on the lookout for black cash payments

Cash brings you no benefit

Don’t do it

[john61ct]

Originally Posted by Augi

I also don't hire anyone to work for me that is cheating on their spouse(without he / her knowing)

Knowledge is not so much the morally deciding factor there, consent is. And with consent it's no longer "cheating".

In many cultures a spouse may well be de facto consenting, but would be very much opposed to anyone knowing that.

Seems like too messy an area to bring into business dealings beyond a general "I don't hire liars and cheats".