EU Vat paid and re-entry

[Poweller]

Hi everyone.

Were looking at buying our first yacht for a global family voyage and have run into an issue regarding vat paid.
The boat we are looking at has its vat paid here in the EU but she is currently outside the EU. We are EU residents and would continue to have the boat registered in the EU. However by the time we sail her back to Europe she will have been outside the EU for more than 3 years.
Will we have to pay vat on our return?

Where can I get this confirmed?

Thanks so much for your help as this will have a significant weighting on which boat we buy.

[TeddyDiver]

Look for and visit some far out EU territories to stop the clock.. like France overseas departments.

To know what's what considering EU https://en.wikipedia.org/wiki/Overseas_France

[Tupaia]

If you purchase a VAT paid vessel "outside" of the EU it looses it VAT paid status and as an EU resident VAT would become payable immediately on re-entry regardless of the time spent outside the EU.

[Poweller]

Thanks Tupaia,

While the boat is outside the EU we would be generating a Bill of Sale here inside the EU. Not sure if that qualifies it ?

[Tupaia]

Originally Posted by Poweller

Thanks Tupaia,

While the boat is outside the EU we would be generating a Bill of Sale here inside the EU. Not sure if that qualifies it ?

I would think not. The change of ownership on the registration and a keen customs officer on your re-entry could leave you with a VAT bill and legal action for deliberate tax avoidance.

[Zanshin]

Originally Posted by Poweller

Hi everyone.
...
The boat we are looking at has its vat paid here in the EU but she is currently outside the EU. We are EU residents and would continue to have the boat registered in the EU. However by the time we sail her back to Europe she will have been outside the EU for more than 3 years.
Will we have to pay vat on our return?
...

I've gone through this before. If the yacht is sold while physically outside of the EU then the VAT-Paid status is immediately lost. I experienced this myself, selling a UK-VAT-Paid boat outside of the EU (while the U.K. was still a part of the EU)

Regarding the VAT-Paid status, it will be lost after 3 years outside of the EU. But there are exceptions in applying this rule, it often depends upon the customs officer you encounter. Which country is your boat flagged in? If in Germany, there are many cases of this rule not being enforced.

If you sail to the Caribbean or Pacific you might get your clock reset by going to a French Department. While they are part of France, they aren't part of the EU-VAT zone so you might get lucky. The official German statement (zoll.de) is that going to those departements doesn't count to reset the 3 year clock.

[2greens1red]

I posted this on another thread a couple of months ago:

After further research, from the RYA and CA in the UK, it looks as though after 3 years the original owner has a good chance of avoiding a 2nd dose of VAT, though not a new owner.

Here's the UK Cruising Association's interpretation (updated 24jan24)

D) Returned Goods Relief - UK and EU
Goods (including yachts and their equipment) can be re-imported into the UK or the EU without payment of VAT in certain circumstances under an arrangement called Returned Goods Relief (RGR).

The conditions that apply to RGR are similar in both the UK and the EU. For RGR to be available:

(a) the vessel must not have had more than "running repairs" to it during its period of export that do not increase its value;

(b) the goods must be returned to the UK or the EU (as applicable) within 3 years or, if they are returned outside the 3 year period:

(i) on a return to the EU there are "special circumstances" to justify the waiver of the 3 year requirement; and

(ii) on a return to the UK, the normal three-year time limit will be waived by HMRC for personal effects (including yachts) which are being returned to the UK for the personal (non-commercial) use of a UK resident person, without the applicant needing to prove that the effects could not be returned within the normal time limit

(c) the person importing the goods is the person who originally exported them.

The EU requirement for "special circumstances" if a return is made outside the 3 year period is assessed on a country by country basis. By way of example, pre-Brexit the UK rules stated that the 3 year period may be waived "to account for special circumstances where HMRC considers that it would be reasonable to do so".

In order for UK RGR to be claimed on an entry to the UK, Form 1331 must be completed. If the return is made outside the 3 year time limit an application for a waiver of the 3 year time requirement must also be made to HMRC on entry to the UK (through the Yachtline reporting processes as set out in HMRC Notice 8). As stated above, as long as the UK RGR conditions are satisfied the 3 year time limit will be waived by HMRC.

[Dockhead]

Originally Posted by Tupaia

I would think not. The change of ownership on the registration and a keen customs officer on your re-entry could leave you with a VAT bill and legal action for deliberate tax avoidance.

This is correct. You will need to complete the transaction in EU waters to preserve the VAT-paid status.


Now if you are EU residents and are establishing residence outside the EU, and plan to come back with the boat, you might qualify for a VAT and duty exemption.

[Zanshin]

Originally Posted by 2greens1red

...
I posted this on another thread a couple of months ago:

After further research, from the RYA and CA in the UK, it looks as though after 3 years the original owner has a good chance of avoiding a 2nd dose of VAT, though not a new owner.
...

That is good and useful information, but it doesn't answer the OP's question. They are from the EU, and the UK is no longer part of the EU so the VAT information doesn't apply to them.

[TeddyDiver]

If you just go sailing, like RTW or what, you don't export your boat. If you move residency to another country then you might do, or would be required to..

[more]

Originally Posted by Poweller

Hi everyone.

Were looking at buying our first yacht for a global family voyage and have run into an issue regarding vat paid.
The boat we are looking at has its vat paid here in the EU but she is currently outside the EU. We are EU residents and would continue to have the boat registered in the EU. However by the time we sail her back to Europe she will have been outside the EU for more than 3 years.
Will we have to pay vat on our return?

Where can I get this confirmed?

Thanks so much for your help as this will have a significant weighting on which boat we buy.

you have bunch not vat paid boat.skip this and go on next boat. register on poland flag and when return home pay vat.or sale this boat and buy what you want

[Poweller]

This is how I would interpret it. But judging by other posts the fact that the boat is outside the EU deems it “exported’ ����*♂️.

Thanks to everyone for their replies

[2greens1red]

Originally Posted by Zanshin

That is good and useful information, but it doesn't answer the OP's question. They are from the EU, and the UK is no longer part of the EU so the VAT information doesn't apply to them.

I think if you read that RYA info again you will see it applies to both EU and UK situations?

[Zanshin]

@2greens1red - as the U.K. is no longer part of the EU and the post is regarding a post-Brexit transaction, the RYA is info is incorrect.