American buying a sailboat in Italy, changing Flag?

[joed]

Hi everyone,
I'm american and buying a sailboat in Italy, I do not plan on bringing her back to USA, i want to keep her in Italy full time. As say a vacation home. VAT has been paid etc. So i was wondering if i should change her flag to USCG reg.
thanks!

[Yellow bird]

If you change her flag into US flag you will loose her VAT status, so you'll can take her in the EU water only 18 months; if you'd like to keep her in Europe longer, you'd better maintain an EU flag.

[Sand crab]

I have read lots of these VAT threads and always thought a yank couldn't maintain VAT but it appears there is a way. So, where can a yank register the boat?

[joed]

Thanks, yeah i thought i read something about that but i was also told as long as you keep your original bill of sale. The VAT status stays with the boat. Since you can prove the VAT was paid. Do you know of a site to read up on this issue?
thanks
joe

[WindwardPrinces]

The VAT status has value on resale, so I'd try to keep that.

[Yellow bird]

Originally Posted by joed

........
The VAT status stays with the boat. Since you can prove the VAT was paid.
.........
joe

I try to explane why this is not true.

If you are a non-EU citizen, with a boat with a non-EU flag, when you spend your money in any EU country (ie. spare parts, refiting, maintenance, any works on boat by professional, etc.), you pay the bill "VAT included", but you can ask for the refund of VAT (as a non EU citizen), and you'll have your money (paid for VAT) back
And that is because when you change flag in a non-EU flag you loose automaticaly her VAT status.

[nwdiver]

If VAT is paid and documented you don't have to pay it again (new UK issues aside), a friend has had his EU purchased, VAT paid Canadian flagged boat in Spain for over 10 years he spends spring and fall on it. He asked day one and this was totally legal all above board. If you enter the EU with a US flagged boat you have 18 months. Maybe Italy has a different law than other parts of the EU.......

[nwdiver]

Originally Posted by Black Eagle

I try to explane why this is not true.

If you are a non-EU citizen, with a boat with a non-EU flag, when you spend your money in any EU country (ie. spare parts, refiting, maintenance, any works on boat by professional, etc.), you pay the bill "VAT included", but you can ask for the refund of VAT (as a non EU citizen), and you'll have your money (paid for VAT) back
And that is because when you change flag in a non-EU flag you loose automaticaly her VAT status.

I don't believe you lose VAT status on changing you flag, unless it's an issue with the country you want to change it to, not an issue with Canada.......then there is the other side......I stay in the EU for 19 months, pay VAT and keep my Canadian flag.........which is legal also.....the horror on the faces of the tax dudes would be worth the price......

[joed]

Thanks i understand what you are saying, Now can an american own her and keep the Italian Flag ?

[joed]

Yes that is what i understood, that if i bought her VAT paid and reflagged her USA. That i wouldn't have to adhere to the 18month rule on leaving the EU. But another question would be that if i decide to sell her would the new buyer have to pay it? damn so many if's
thanks

[hellosailor]

Perhaps one might ask, if the OP is an American citizen and does not have Italian citizenship or residential status...Can he even keep any flag on the boat besides a US flag? Or a commercial one, or one from a country that allows "loopholes" ?

[Montanan]

I suspect one is dealing largely with two subjects.

VAT and flagging.

If EU VAT has been paid on he boat then as long as it isn't BREXITED, the boat should retain VAT status.

As to flagging, in the USA it is called documenting. The boat is either flagged by a member country of the EU or non-EU flagged. If you are an American citizen then you can document the boat with the Star Spangled Banner.

There is no EU flagging of a boat, it is country specific matter and you need to evaluate the rules of being able to flag your boat in a foreign / non-USA country.

Other issues may arise if you have dual citizenship or if you have EU resident status.
If you are a resident of a country that country may avail flagging of your boat, you will need to research the country specific laws in that regard.

Next issue, as to importation, temporary or otherwise, reference and copied snipet therefrom: I would recommend that you cross verify this matter with additional sources and authorities.
http://www.dohle-yachts.com/wp-conte...on-into-EU.pdf

Temporary Importation to EU
If a yacht operates in EU waters Value Added Tax (VAT) and customs duties must be considered. These considerations can also impinge
on the choice of Flag State, the yacht’s ownership structure and the place of ownership.
The EU’s Sixth Directive on Value Added Tax was amended in 1993. This amendment states that all yachts which are
owned or used by an EU resident in EU waters must pay VAT or have proof of VAT exemption. Failure to comply with
EU regulations can have serious consequences for a yacht and its owners – this can include detention or seizure of
the yacht, or severe financial penalties.
It is therefore vital that the yacht complies with all regulations and has appropriate ownership structures in place.
Owners who are non EU residents, or a yacht which is non EU Flagged, who wish to sail their yachts in EU waters for
private purposes may temporarily bring their yacht into the EU without customs duties or VAT needing to be paid.
The boats concerned have to be placed under the 'temporary importation procedure' (TI) with Customs and the period
of use in the EU is limited in time to eighteen months. The temporary importation rules are covered under Article 562
of the Customs Code. When the time is up the boat has to leave, in official jargon this period is called 'the period of
discharge'. The re-exportation of the goods from the customs territory of the Community is the usual way of ending or
'discharging' a temporary importation procedure. If the boat does not leave before the end of that time then customs
duty and VAT become due.
A boat is temporarily imported into the EU and not into one of the constituent Member States. Thus it can move from
one Member State to another with no further customs formalities during the 18 month period allowed.
After 18 months the yacht must be exported before re-entering the EU under the same rules.
How can a yacht be placed under TI? Just crossing the frontier of the customs territory of the Community is in general
sufficient. But, the yacht may be required to use a route specified by customs and they may require the vessel to
make an oral or written customs declaration. It is possible that customs may require the provision of some kind of
security or guarantee to cover the payment of the customs duties and VAT that become due if the boat does not leave
the EU.
The legal provisions on temporary importation are found in Articles 562 and 137 to144 of the Customs Code.

[nwdiver]

Operative word in "BRING" their yacht into EU waters.......this has nothing to do with a EU VAT paid yacht that NEVER left EU waters.......now if it leaves the VAT will have to be paid after a period of time should it re-enter the EU, in this case the VAT doesn't follow the boat.....

[Sand crab]

So can an American buy an EU VAT paid boat and keep the VAT paid status?

Can he flag it in the US or does he have to pick an EU country?


Where in the EU is a good place to flag it?

[joed]

Sorry but i don't understand all the misunderstandings this is straight forward:
An american finds a sailboat for sale in Italy, the VAT has already been paid. The american wants to USCG reg her and keep her in Italy, Is this a problem ? The american comes to italy for less than 3 months. Stay's on his sailboat. Does he have to follow the 18 month rule? if he sells her does the new buyer have to pay VAT again?

Or those said american keep the Italian reg,(flag) (but with an italian mailing address)