Who Decides How Much VAT You Pay ?

[pablothesailor]

Hi guys, ive done a search regarding EU VAT but cant find all the info i need! I would like to know If i buy a boat that does not have EU Vat paid, who decides how much i pay?? Whatever boat we buy will end up on a british flag (Unless someone here suggests a better plan?) Do you pay the % on what you bought the boat for, or is there a survey or valuation done by some type of ¨local tax man¨ in the EU country you happen to be in? Also, is the % the same in all EU countries, or do you have to pay the VAT in the country the boat is registered? As always, many thanks, Pablo.

PS, those that know me keep your fingers crossed, we may have sold the property, will know by end of next week!

[pablothesailor]

I wonder if i should perhaps give an example? If I was to buy a 2nd hand boat in Florida for lets say....$100,000, put her on a british flag and bring her to live in the EU where I would want to pay the VAT, But what I cant quite get to the bottom of......

Is the VAT on what you paid for the boat?

OR

Is there a ¨valuation¨made by some one from the Tax office of the EU country I happen to be in? That could be a disaster if they valued it way above what you paid for it!

Can you pay the VAT in any EU Country and is it the same figure percentage in all countries in the EU? Or would you have to pay the VAT in the EU country that you have registered the boat to

[goboatingnow]

The value is determined by you , but youtl have to show proof. For example a recent sale valuation would be acceptable , once the value isn't ridiculously low. Most customs officials will not know the Market value, however for well known brands they tend call the local dealer to determine

Customs also except that a yacht is a " wasting Asset". Hence if you have owned it for several years you can apply normal asset depreciation rules to the value. ( typically 20% straight line depreciation per annum.

Technically a yacht is a " means of transport" and as such VAT is paid in the country of destination In your case the UK. However this fact isn't well policed and many people have paid VAT in third countries to avail of a lower rate.


There isn't a standard VAT rate. You psy the rate pertaining in the country in question.

[svlamorocha]

Pablo

Here is my 1p worth of advice.. You can get better advice from thr RYA if you are a member..

VAT is harmonised as many other things in Europe, which means not absolutely harmonised.

If you are or will become a resident of the UK then you may want to check the UK VAT rules.. The nice bit they have is that they will let you import a boat free of VAT provided you are moving into the UK at the time you take the boat into the UK (ie similar thing to letting you bring your TV, sofa, etc free of VAT when you move into the UK from outside Europe..)... This would give you a "VAT deemed paid" document that will let you go anywhere in Europe without VAT worries at leats until the boat leaves Europe. You can also sell the boat a year or two later as if VAT had been paid..

If you take the boat from the US to anywhere in Europe (loosely defined, there are some special areas for VAT,I suggest you check the rules for the Azores, Canaries, French Caribbean islands, etc) without having paid VAT elsewhere in Europe (whcih means having been there on the boat) or obtained a "deemed paid" document then you will need to be prepared to pay VAT or be eligible for the temporary exemption for "tourists" (loosely defined) from outside Europe.. At least in the rules flag of the boat and citizenship of the owner/skipper/crew are not a key driver on this, the key is the where your residence is, inside or outside Europe.. That said, if you try to say that you do not live in Europe but your boat is registered in Part III (only for UK residents) or in part I with you as the named contact (I forgot the official name) that is supposed to live in the UK, then you have a problem.. .

In the absence if a "deemed paid" deal then you may want to select "a place to pay VAT" where the % rate is low and/or they will agree to a lower valuation, and make sure you organize things so that you can get the boat there without being forced to pay VAT on another place on the way there.. A key point there is that the boat is a means of transport, see another post that covers this.. Once you pay or get a deemed paid document then you are fine until the boat leaves the EU and comes back again..

If your choice would be to arrive in the UK directly from the US to pay VAT in the UK then you can call HMRC to ask about their valuation process. There were very helpful to me on a query like that a while ago, but unfortunately the UK VA&T rate is high and I later learned that the countries with the lower rates ( I forgot if there are any rock bottom rates left as there were in some countries) followed a different process. Back to your question, I was persuaded that there was no worry about HMRC valuing the boat at more than a realistic purchase price. I did not confiurm that the same can be said of the tax authorities of the countries that have lower % rates..

Regarding VAT enforcement, I recall being told that boats owned by corporations and/or flagged in the Channel Islands and the like are more likely to be checked..

Fair winds

Carlos

Originally Posted by pablothesailor

I wonder if i should perhaps give an example? If I was to buy a 2nd hand boat in Florida for lets say....$100,000, put her on a british flag and bring her to live in the EU where I would want to pay the VAT, But what I cant quite get to the bottom of......

Is the VAT on what you paid for the boat?

OR

Is there a ¨valuation¨made by some one from the Tax office of the EU country I happen to be in? That could be a disaster if they valued it way above what you paid for it!

Can you pay the VAT in any EU Country and is it the same figure percentage in all countries in the EU? Or would you have to pay the VAT in the EU country that you have registered the boat to

[pablothesailor]

Holy smoke........I think I am going to have to speak to my accountant about this.....was planning to spend time in Spain (I spend more time here than in UK) but put the boat on a british flag! Good Advice about the RYA, i will give them a call!