The rules are very clear and a boat belonging to a EU citizen, or flying the flag of a EU country, must be VAT paid if it enters the EU. This means that both in home waters and when sailing between any EU countries, such boats should carry evidence of VAT payment.
Boats being used in the EU should have VAT-paid status unless they are just visiting under temporary admission status, in which case a formal application and issuance of a Temporary Importation (TI) Certificate should be obtained. The original VAT invoice, from when the boat was either first bought within the EU or when it was imported from outside the EU, is usually sufficient evidence. A boat that is VAT-paid but is sold
outside the EU loses its VAT-paid status and therefore VAT must be paid if the boat is brought back into the EU.
The above applies to all boats built or brought into the EU since 1 January 1985, or on the joining dates of States that have become EU Members since then. Boats already in EU Member
States and territories on 1 January 1985 pre-date the requirement.
The evidence of VAT-paid status will generally be an invoice, showing the VAT element and a VAT number, or similar document, such as a completion statement.
between companies should show the VAT element on the invoice. Some EU states (notably Holland) ask for the original invoice, but otherwise a certified copy kept on board should be adequate. Keep the original and a couple of certified copies safely elsewhere. It is vital to pass this information on when the boat is sold, as it may be requested by Customs
officers in either the UK or elsewhere in the EU.
In the case of home-builds and further fit-outs, copies of all the major invoices should be kept and passed to subsequent owners to show VAT-paid status. Customs
Notice 8 sets out further details.
Please note that the Revenue agencies do not have copies of individual VAT invoices from boat builders, dealers or other boat sales and servicing transactions [e.g. refittings].