Originally Posted by Alenka
Think you can be forgiven Guy as you are not from these parts
VAT is the European sales tax added to just about everything you buy, but unlike the USA
the price shown in EU shops is generally inclusive of VAT - its not added on at the till.
If you are a non european union citizen you can bring and cruise
your boat in EU water
for about 18 months and do not have to pay any VAT (around 20-23% of the boats value) and/or import
duty. The rules get fuzzy as some countries impose time limits more stringently than others but there are bolt holes such as Gibralter, Turkey
, Albania, Channel Islands that are outside the EU where you can go to stop the clock ticking.
If you tried to sell your boat to an EU citizen then the buyer would have to pay VAT on the deal, but this is where it gets very complex for all sorts of reasons. However in your context it is also a mute point as it is illegal to sell a boat which does not have a certificate of EU conformity. American boat builders, such as Hunter
Legend, generally certify the boats they sell into Europe but not the near identical boats produced for their home market.
The Greek cruising tax, if ratified, would apply to your visit into Greek waters. In the past this was a token gesture but the new charges are pretty steep and seen by many of us as the thin end of the wedge.
Croatia joined the EU this year but still wants to charge non Croatian flagged vessels for cruising its waters. Technically it is illegal to charge citizens from another member
country but it was still going on this summer.
The situation in Greece and Croatia should be of concern to everyone, because if the Greeks and Croatians do it then other countries will probably follow suit and this will mean every time you pass from one country into another you will pay.
In certain areas of Spain
the authorities are already checking out visiting liveaboards that stay in their waters for more than 6 months at a time and hitting them with a form of wealth tax!
I would quite frankly ask those RYA lawyers to give you back your money
Let's dispel some myths
( a) VAT is a transaction tax , which must be accounted for on all imports , exports , sales and purchase
. It's not a sales tax per say , nor is it an asset tax as you can pay it repeatedly on transactions associated with an asset.
As a non EU tax resident ( nothing to do with citizenship ) you have " exactly " , not " about" , 18 months relief from VAT on an private vessel, the clock technically starts at the 12 mile point. , but in practice from the first point of call in the EU. There is no paperwork associated with process nor do you apply in advance. You merely keep records to show compliance. It's know as TIR ( temporary import relief )
No EU country can change those time limits , and the rules DO NOT get fuzzy , more likely some customs
agent simply doesn't understand them. After 18 months. continuous presence inside The Customs
Union of the EU, you must import the boat and pay vat,local taxes etc. enforcement is generally very lax on TIR compliance
Note that all you have to do to reset the vat clock is to leave the customs union , the minimum time away is not specified but typically proof you went outside the customs union is sufficient , ( marina receipt , passport stamp , fuel
bill , etc)
Note the Channel Islands are NOT outside the customs union of the EU. Gibraltar
is in the territory of the EU , but IS outside of be custom union. A fact Spanish customs tend to argue about !
Croatia has effectively up till the end of 2013 to regularise its tax codes. They will not be able to impose differential taxes on EU boats next year. They will continue to tax non EU boats.
In Spain despite what is claimed above, the circulation tax is only applied to tax residents of Spain , there are several conditions that can make you tax resident , but the simple one is being there for 183 days out of a calendar year. In which case they impose a local tax exactly as they impose it on the locals. Note it is not a wealth tax , it's to do with the pollution rating of your engine
( which was a way to round the EU restrictions ) Ireland
for example has something very similar on cars. Such taxes are not unusual in the EU.
Note it does not apply if you are not a tax resident.
The Greek parliament has already passed the legislation in regards the tax , it's merely awaits signing into law. I see no reason why it will not be. At €10/metre per month( above 12 m) it's hardly going to break the bank for most cruising visitors. Below 12m it's less then €50 euros a month. , seriously is this an issue , I mean diesel
is nearly €2/litre in marinas!!
The Croatian tax is a small cruising fee , there is no evidence it is being considered elsewhere in the EU, and it will not apply to EU boats next year. ( unless the Croats apply it to domestic boats )
Note a boat in the EU under TIR may not be sold
unless first imported. , hence it's the seller that technically pays the vat. ( and any buyer should ensure its done that way as it takes advantage of financial depreciation rather then market value pricing ) on this case VAT is not complex.
Compliance with the RCD , ie the CE mark , can now be done after importation , using post construction certification
, which allows US or non CE boats to get a certificate.
If you come access non VAT UK registered boats for sale
outside the UK, You need to carefully understand where the VAT liability resides before proceeding with a purchase
. You cannot discharge a vat liability in one EU country in another EU country.
Vat is simply not an issue for the non tax resident visitor.
That should do it for now