European VAT question

[Sailorcanuck]

I'm looking at a used European manufactured boat for sale in Tortola, BVI. It was orginally puchased in Europe (England I believe) and VAT was paid. Upon asking the broker whether VAT was paid on the boat, here is his response:

"Hi Bob, well, technically yes, VAT is paid, but the laws have been changed over there now and the new laws (as of a couple of years ago) are that even if a boat has had it’s VAT paid, if the boat changes hands OUTSIDE of the EU, the VAT is due again when the boat returns! Wouldn’t you just know it that if the tax people can figure out how to collect more taxes that they will!"


Huh!.........Does anyone have helpful expertise on this issue?


Bob (Sailorcanuck)

[Rhosyn Mor]

The Broker is right, VAT is considered paid only if the vessel is brought back to the EU by the same person who took it out. On an older boat it can be grandfathered in if it was in the EU in 1992. If you do not take the boat into the EU, its not a problem, you do not have to pay the VAT.and if you take the boat back into the EU under a non EU flag, you will get 18 months before tax is due, so not a problem there. If you are a european and want to bring the boat back to the EU, you are allowed to import it as a personal possession, tax free if you have had the boat for more than a year.
hope this helps

[djeeke]

Originally Posted by Rhosyn Mor

If you are a european and want to bring the boat back to the EU, you are allowed to import it as a personal possession, tax free if you have had the boat for more than a year.
hope this helps

Is this true ?
It would mean that Bob (Sailorcanuck), being EU resident, buys the boat in Tortola, BVI today, leaves it moored there for a year and one day and can then sail it into EU waters tax free?


To me this seems too easy to be true...

[h20man]

djeeke, he has to be living outside the EU for a year, and have the boat as his personal possession. Then he is allowed to bring it (with his other possessions) home when he returns. The tax authorities may want some proof of this.

[djeeke]

I said it was too easy

But for a EU citizen intending to go cruising a longer period of time this still sounds like a good incentive !

Buy a boat outside the EU, go cruising with it outside EU waters for a year and a day and then sail in to EU waters, taxfree !

[Rhosyn Mor]

The only Caveat is that the boat must a EU manufatured vessel, its not as easy ( although technically still possible to do with a US built boat- it would have to meet RCD requirements

[anthon]

Damn, they find a way to tax on anything don't they

[Rhosyn Mor]

In the UK there is no requirement to register a vessel ( at least up to 12 meters that I know of) and should you choose to do so the registration is NOt linked to any tax payments. As long as you choose not to leave Uk waters there are incrdibly few restrictions/ payments/regulations.

[David_Old_Jersey]

Originally Posted by Sailorcanuck

"Hi Bob, well, technically yes, VAT is paid, but the laws have been changed over there now and the new laws (as of a couple of years ago) are that even if a boat has had it’s VAT paid, if the boat changes hands OUTSIDE of the EU, the VAT is due again when the boat returns!

The law is not that new, at least 10 years (and I suspect then some).

Huh!.........Does anyone have helpful expertise on this issue?

"Expertise" may be pushing it a bit But in Jersey we are outside the EU for VAT purposes, so when a VAT paid boat (ie one that was imported second hand from the UK - like mine ) is later re-sold locally it loses it's VAT Paid status. The work around is for the transaction to happen within the EU - even if between two non EU nationals. How one evidences that is another question - for which I have no recent answer

But I would go for a Marina receipt on the date of the sale documents, and in an ideal world backed up by EU addresses on the sale / purchase documents and initial registration - even if shortly later re-registered with your permanent (real ) non EU address in order to show a continuous EU chain of sale transactions.........I would of course take professional advice on this

But FWIW although in Jersey we are 15 miles away from the EU (France) and NOT in the EU for VAT purposes - their are also bits of the EU further afield and scattered around the world - I think mainly thanks to the French converting their colonies into full regions of France. Possibly even the Dutch did something similar. Certainly the Caribbean has bits of the EU in it. As well as South America.....so with the Boat in the BVI a trip to the EU does not have to mean a trip accross the Atlantic.

On this boat I would want to make sure she had not already lost her VAT paid status by previously having been bought / sold outside the EU as it's kinda like virginity - once gone, it ain't coming back

[stephan birke]

once a private person has paid VAT in any EU contry it´s good and can´t be made undone, but if your boat is newer 1985 you will have to have proof of it. older than 1985 you need to prove that the boat was in eu 1992. If this boat is build and sold in an eu country your are also ok with the CE marking witch aply for boat build in EU from 1998 and for non eu boat from 1950. In your case it looks like you need all the documentation you can get like the VAT recite, all "bill of sale", all registrations etc etc

[Talbot]

Originally Posted by stephan birke

once a private person has paid VAT in any EU contry it´s good and can´t be made undone,

This is not necessarily correct - David Old Jersey has the correct information.

If the boat transaction takes place outside the EU it loses its VAT paid status.

[sestina]

Why not sail it to one of the French islands and do the deal there? They are all technically overseas departments of France and thus in the EC.