EU citizens - non EU registered but VAT paid boat - Are we crazy?

[CookiesnTequila]

VAT was not a factor at all in our boat search - we are Canadians setting out on a wherever-we-end-up cruise - we didn't even know or care where we were going to start out from. That would be wherever we found our boat! It just so happened that it was VAT paid - so now we are trying to figure out how to maximise that benefit!

Originally Posted by monte

Unless you have a specific boat in mind I would be shopping for non vat paid boats. They should be 20% less expensive! but will almost all be ex charter. Or buy new and save the 20%
I would guess a 3yr old boat with VAT paid would be priced similarly to a new one ex factory

[monte]

Ok well a lot of other things should be considered as well such as
Can you register in uk without residency - I don't think so
Will you have to pay tax on return to Canada if it's Canadian flagged - probably
Will you have limited time in Canada if it's uk flagged - probably

If the cost of the boat is under 100K I probably wouldn't worry either way regarding the status, but if it's up around 300K I'd rather not burn 60k in the process for something not needed - ie VAT paid status. The.again the 18 month cruising rule applies to new boats. It's easy enough to manage to sail out of the eu from pretty much anywhere in the med in a day or two. I'm not sure if it's for used boats. I think it may just be 6 months.

[Dockhead]

Originally Posted by TeddyDiver

Let's make this a bit more complicated. Let's say you buy newish EU-VAT paid boat, from a broker in France with an invoice stating the amount VAT and then register the boat in the name of a company you have established in another EU country, like in GB. Then you can get all the VAT paid back and sail legally in the EU. Have the mapple leaf as a courtesy flag for the other one of you, in turns of course :-D
Kidding of course but possible..

Possible only if the boat is used primarily for business and the company is VAT registered. Not for pleasure use.

[CookiesnTequila]

We would have to pay tax if/when we returned to Canada regardless of where we register the boat, but we aren't planning on doing that. We're running away from the snow, ice and 5 month sailing seasons!!

It is over $300k - and the VAT has been paid by the previous owner, so it is a freebee to us. I am trying to make sure I preserve it, and trying to figure out how difficult it might be to take advantage of it as we cruise.

I'd love to hear from a few more non EU residents cruising the EU on non EU registered boats using EU passports... Seems we are a rare breed!!


[QUOTE=monte;1702045]Ok well a lot of other things should be considered as well such as
Can you register in uk without residency - I don't think so
Will you have to pay tax on return to Canada if it's Canadian flagged - probably
Will you have limited time in Canada if it's uk flagged - probably

If the cost of the boat is under 100K I probably wouldn't worry either way regarding the status, but if it's up around 300K I'd rather not burn 60k in the process for something not needed - ie VAT paid status. The.again the 18 month cruising rule applies to new boats. It's easy enough to manage to sail out of the eu from pretty much anywhere in the med in a day or two. I'm not sure if it's for used boats. I think it may just be 6 months.[/QUOTE

[valhalla360]

The real issue here is:

Does changing the flag to Canada remove the VAT paid status?

I suspect the answer is no but I'm not a lawyer specializing in EU VAT issues. The problem is if they decide you are an EU resident, VAT becomes due immediately and they get to decide what value the boat has, so they could easily bump it up by 30-40%.

Personally, I wouldn't mess with it if you can avoid it. Buy a new mainsail with a red maple leaf and you get to enjoy a performance boost while seeing the flag every time you sail.

[beneteau-500]

As a Aussie who has sailed and lived in UK greece and Italy over the past 22 yrs I do know of the the advantages of having a EU flagged yacht with vat paid and I have owned 5 yachts in this time you just don't get the hassles from officials .

Now not knowing where you are buying this yacht but if in Greece when the broker prepares the paper work for transfer of sale he will ask you what the flag of registration it will be if you state Canada then in his/lawyer will then carry out due dilagence with the Greek Hellenic Authroitys and of which there are a few departments but one of those Customs& finance will issue a Export certificate documents and once that is Done the Vat Status is lost which creates a few other probs if the yacht is on the hard then you will occur additional fees just to get yacht back in the water they are not huge fees but but time consuming .
And yes I would presume you will be hit with import vat if you returned to Canada ( I don't know your laws in regards to this )

[TeddyDiver]

Originally Posted by beneteau-500

and once that is Done the Vat Status is lost

Might be the case in Greece but every EU country has their own VAT legislation. Even so Greece doesn't have anything to say if the boat originates from other member country where the VAT has been paid.

[beneteau-500]

Originally Posted by TeddyDiver

Might be the case in Greece but every EU country has their own VAT legislation. Even so Greece doesn't have anything to say if the boat originates from other member country where the VAT has been paid.

How do know the hellenic shipping doesn't and yes each EU country has there own regulations on vat but the basic apply's too all

[CookiesnTequila]

I have legal advice that says no, it does not - once VAT is paid it stays, and it only has to be paid once. All one needs is clear evidence that it has been paid.

And because the current registration is French, it must be exported - because we are not French residents.

Originally Posted by valhalla360

The real issue here is:

Does changing the flag to Canada remove the VAT paid status?

I suspect the answer is no but I'm not a lawyer specializing in EU VAT issues. The problem is if they decide you are an EU resident, VAT becomes due immediately and they get to decide what value the boat has, so they could easily bump it up by 30-40%.

Personally, I wouldn't mess with it if you can avoid it. Buy a new mainsail with a red maple leaf and you get to enjoy a performance boost while seeing the flag every time you sail.

[CookiesnTequila]

That is not correct, at least as far as the two lawyers I've had advise me are concerned. Our boat is French registered now, and to remove it you get a "Deletion", which is officially an exportation. I've now had two separate lawyers confirm that changing the flag does not affect the VAT paid status. Nor does the location of the boat at the time of sale.

I'm having a hard time finding anyone that has actually had "hassles" because they have a VAT paid, non EU registered boat! Bulawayo is the only one so far that I've found in this situation, and he doesn't seem to have any troubles.

[QUOTE=beneteau-500;1702112]As a Aussie who has sailed and lived in UK greece and Italy over the past 22 yrs I do know of the the advantages of having a EU flagged yacht with vat paid and I have owned 5 yachts in this time you just don't get the hassles from officials .

Now not knowing where you are buying this yacht but if in Greece when the broker prepares the paper work for transfer of sale he will ask you what the flag of registration it will be if you state Canada then in his/lawyer will then carry out due dilagence with the Greek Hellenic Authroitys and of which there are a few departments but one of those Customs& finance will issue a Export certificate documents and once that is Done the Vat Status is lost which creates a few other probs if the yacht is on the hard then you will occur additional fees just to get yacht back in the water they are not huge fees but but time consuming .
And yes I would presume you will be hit with import vat if you returned to Canada ( I don't know your laws in regards to this )[/QUOTE

[Prairie Chicken]

Cookies, our situation has similarities, and we have considerable experience with our boats in the EU.

We are Canadian, are Canadian residents, and we do not have EU passports. We have owned & sailed Canadian registered and flagged boats in Spain for 21 years. We fly back & forth, and do not exceed the Schengen restrictions.

The VAT was not paid on our 1986 First 375. We were boarded twice by the Spanish Aduanas (Customs). In both cases the Aduanas were concerned about how long we, the people, had been in Spain, and did not raise the question of VAT at all. On the last instance (perhaps 8 years ago), the officers pointed out that we (the people) were only permitted to stay in Spain for a maximum of 6 months. (I can only assume the Aduanas officer did not know or understand Schengen.) In both cases they examined our passports thoroughly, including the stamps of entry & exits from our flights in & out of the EU, and turned us loose with a copy of their inspection report to provide to any other Aduanas officer who should happen to board us in the future, and good wishes.

However, we observed more boardings and more enforcement activity in Spain and decided we needed to pay the VAT on our boat. We were not interested in sailing her to Gib every 18 months to reset the VAT clock. We engaged expert advise in Palma and eventually a value was determined for the VAT due on our boat & we paid it. We sailed our Canadian registered boat for several years with our receipt showing VAT had been paid in Spain. We recently sold that boat to a UK resident who happily took that VAT-paid receipt as part of the ship's documentation.

Two years ago we purchased a Jeanneau 43 DS in Spain. She was German flagged and the broker obtained a deletion certificate. She is now Canadian flagged. We have clearly been advised by all parties we have spoken to that since she was purchased in the EU, by an EU citizen, and was VAT paid, she continues to carry her VAT-paid status.

I do not see you having any problem putting the Maple Leaf on your boat! I see no benefit putting a EU flag on it. The only question seems to have been your purchase actually taking place outside of the EU and if this would affect the VAT-paid status. As you have obtained expert advise on this, twice I believe you said, I would trust that advice (but keep copies of all correspondence should you ever need it).

As Canadians we tend to expect laws and regulations to be clear and enforced in a standard manner. This is not the case in many Med countries, and the individual approaches by EU countries make it even more difficult to assess.

[TeddyDiver]

Originally Posted by beneteau-500

How do know the hellenic shipping doesn't and yes each EU country has there own regulations on vat but the basic apply's too all

Don't understand what you are saing??
But the basic is that no other country can't do anything regarding VAT except the one where It's been payed during the original purchase..

[Prairie Chicken]

I'm having a hard time finding anyone that has actually had "hassles" because they have a VAT paid, non EU registered boat!

I've never heard of such a case. That said, VAT-paid, non EU boats are not the norm for in the EU.

[rivonia]

Originally Posted by beneteau-500

As a Aussie who has sailed and lived in UK greece and Italy over the past 22 yrs I do know of the the advantages of having a EU flagged yacht with vat paid and I have owned 5 yachts in this time you just don't get the hassles from officials .

Now not knowing where you are buying this yacht but if in Greece when the broker prepares the paper work for transfer of sale he will ask you what the flag of registration it will be if you state Canada then in his/lawyer will then carry out due dilagence with the Greek Hellenic Authroitys and of which there are a few departments but one of those Customs& finance will issue a Export certificate documents and once that is Done the Vat Status is lost which creates a few other probs if the yacht is on the hard then you will occur additional fees just to get yacht back in the water they are not huge fees but but time consuming .
And yes I would presume you will be hit with import vat if you returned to Canada ( I don't know your laws in regards to this )

Any yacht bought and sold in the EU which is VAT paid remains VAT paid. Simple. The VAT status is only lost if the sale takes place out of the EU simple.

[Steve Pope]

If you really need to have the Canadian flag flying, fly it from the port spreader, this will tell other folk that there are Canadians on board.