New Schengen Visa Rules from Feb 2020

[slug]

Originally Posted by Franziska

Be careful that you get offered and guaranteed a FULL VAT refund.

Second hand goods usually get only a very very small amount refunded, if any.

You might be correct ..

.the brokers proposal and communications indicate a full vat refund ..

To me it sounds too good to be true

The brokerage is one of the biggest in Europe

The yacht was never privately registered...it’s a charter boat

I have made an additional inquiry with a VAT specialist

I await the reply

[valhalla360]

Originally Posted by carraiguna

May be a dumb question but for clarification ...
If I have dual citizenship US and EU I assume the Schengen rules do not apply. However if I am on a US Flag vessel are there other concerns about buying a boat in say Spain and staying in Mediterranean for an extended time.

You need to get your residency defined, likely by a lawyer willing to commit to the status given the full plan. I see multiple conflicting statements that would impact your status. I assume you are currently a resident of the EU as you indicate, you will "retire to" the USA. But then you say you will move back after only a couple months to live on the boat for around 6 months.

Residency not citizenship is what determines if you are eligible for temporary VAT relief.

You can stay longer than 90 out of 180 days as an EU citizen but that would support the idea that you are a resident and have to pay VAT immediately upon purchase (assuming the boat isn't already VAT paid).

[boom23]

Originally Posted by carraiguna

Thank you Greg K, Slug and Tarian for responses that give me much food for thought and some avenues to do further research.
The overall plan is to :
1. purchase a vessel in - say Spain for export (not pay VAT)
2. retire in US early this summer
3. move aboard and sail Spanish coast to France and Italy
4. by September begin journey back towards Portugal for the off season
5. return to US for Thanksgiving / Christmas
6. in Feb back to boat to cruise Med as far east as Greece
7. late summer set up for ARC 2021 to Caribbean

Based on Greg K link provided it seems the Spanish tax (12%) would not apply ?
Still unsure about Slugs comment - EU passport on US flag vessel with tax not paid - may be the biggest issue ?

I welcome any other comments or GOTCHA regarding the plan

I have similar situation. I'll explain what I know as best as I can. As always, it is best to ask an expert.

The boat and you are two different entities.

If you have an EU passport, you can stay in Europe as long as you want. But, if you stay more than 6 months in one EU country, you'll be considered a resident and may be asked to pay income/property taxes. If you don't stay in any EU country more than 6 months, you remain a resident of the country that you pay taxes.

Your boat (non-EU registered, VAT not paid) can stay in EU for up to 18 months if it is skippered by a non-EU resident (i.e skipper can be an EU citizen). If the boat reaches a non-EU port with 18 months, the 18 month clock gets reset. If not, VAT will be due and payable. If an EU resident skippers the boat, VAT is due and payable.

I hope this helps...

[boatman61]

Originally Posted by slug

Well....I’m presently negotiating with a broker in the Netherlands

2012 yacht , Dutch flagged charter boat

Vat refunded if I reflag and export out of Eu

The deal has not yet gone thru...I will post if the VAT reclaim was successful

If its a charter boat the VAT will not have been paid on it most likely..
Thats the norm with charter firms like SunSail etc.

[boatman61]

Originally Posted by Franziska

Be careful that you get offered and guaranteed a FULL VAT refund.

Second hand goods usually get only a very very small amount refunded, if any.

I have only ever bought secondhand boats (12) in Europe from the UK to Malta and never had to pay VAT.. nor on a secondhand car or a m'cycle.
Wonder if your being gamed..
Just checked and the VAT charged is on the profit made by the dealer which is not usually on the invoice.
A private sale has no VAT.

[Pete7]

Originally Posted by slug

I have made an additional inquiry with a VAT specialist

I await the reply

Good plan

Probably going to roll like this.

Whoever owns the boat now (not the broker) will have paid and claimed back the VAT on initial purchase as part of a business. It's two entries in their VAT account that cancel each other out.

On sale to an EU resident, buyer pays the total price incl VAT to the business. The business calculates the VAT on the second hand price, at their countries rate and declare it in their VAT account, then pays their Gov tax dept when the business VAT is due, annually or quarterly etc. EU buyer gets a sales receipt which includes VAT and keeps it very safe with copies.

To sell as an export (non EU resident), the vendor business has to account for the lack of VAT on the sale of a business asset (yacht), or risk the tax man coming back at a later date and saying "Oi pay up" particularly if the asset isn't seen to leave the EU immediately.

Can be done but warrants paying for professional help to check they do it correctly. Shouldn't be a problem finding a VAT accountant to check on your behalf plus the rules about changing to a foreign registration rather than leaving the EU immediately as an export. Likely only a few hundred Euros.

Pete

[Dockhead]

Originally Posted by boom23

. . .

Your boat (non-EU registered, VAT not paid) can stay in EU for up to 18 months if it is skippered by a non-EU resident (i.e skipper can be an EU citizen). If the boat reaches a non-EU port with 18 months, the 18 month clock gets reset. If not, VAT will be due and payable. If an EU resident skippers the boat, VAT is due and payable.

I hope this helps...

Not just skippers -- if the boat is being used in any way by EU residents. See the RYA advice on this, which is quite comprehensive.

[slug]

Originally Posted by Pete7

Good plan

Probably going to roll like this.

Whoever owns the boat now (not the broker) will have paid and claimed back the VAT on initial purchase as part of a business. It's two entries in their VAT account that cancel each other out.

On sale to an EU resident, buyer pays the total price incl VAT to the business. The business calculates the VAT on the second hand price, at their countries rate and declare it in their VAT account, then pays their Gov tax dept when the business VAT is due, annually or quarterly etc. EU buyer gets a sales receipt which includes VAT and keeps it very safe with copies.

To sell as an export (non EU resident), the vendor business has to account for the lack of VAT on the sale of a business asset (yacht), or risk the tax man coming back at a later date and saying "Oi pay up" particularly if the asset isn't seen to leave the EU immediately.

Can be done but warrants paying for professional help to check they do it correctly. Shouldn't be a problem finding a VAT accountant to check on your behalf plus the rules about changing to a foreign registration rather than leaving the EU immediately as an export. Likely only a few hundred Euros.

Pete

As I understand...via the broker ... the vat reclaim procedure works like this

I purchase the boat..full price, including vat

I reflag the boat, non Eu

I unroll the Genoa , make speed to the Canaries.

When I check out of the Canaries , next port Caribbean , I file this ....departure from the EU paperwork... with the authorities in the Netherlands.

The paid VAT is then credited to my account

[Pete7]

Yes that should work, might be worth having a Dutch VAT accountant file it for you and be involved in the whole process from the start.

I have done it myself, but it was low value items like diving equipment so no great shakes if it went pear shaped. Actually I claimed the VAT back from the vendor with a 'signed by' customs declaration form showing that it had been exported. The vendor then used the customs declaration to support his VAT account to show how an asset was sold and exported, so no VAT due to the tax man. Took months to get a cheque to send home to then be banked. This was a UK process for low value items to simply the process for the tax man. All they wanted was a certificate supporting the VAT account that was stamped and signed. Might be more tricky with a high value item like a yacht. Customs and Revenue will be on the look out for tax dodges and a yacht an obvious item that draws their attention.

Depending on the timing you could unroll the Genoa and head for England as an option.

Pete

[Dockhead]

Non-Euro cruisers in Europe should also take notice of the ETIAS/EES system which will come into effect perhaps at the end of this year.


From the time this system comes into effect, we will no longer be able to fly under the radar, counting on border guards being too lazy too count up our Schengen days through the stamps on our passports. You will not allowed to enter in the first place without an ETIAS, which is a kind of electronic visa, which registers you into the EES central database. There will no longer be any passport stamps; any Schengen zone border card can see with the click of a mouse exactly how long you've been in the Schengen zone and when.



What this does to the bilateral agreement regimes I have no idea, but if you look at for example the Danish immigration services page there seems to be no more mention of them.



The 5 year visa mentioned in the OP will be no help at all -- that merely gives you the right to be in Schengen 90 out of 180 just like we've always been able to do without any kind of visa.



It seems to that things are going to get a lot tougher. I have a four-year residence permit myself, so this won't affect me, but I am concerned for the rest of you.


Brits should also take notice -- at the moment, the Eurocrats are preparing to apply this system to you as well.

[Pete7]

Originally Posted by Dockhead

Brits should also take notice -- at the moment, the Eurocrats are preparing to apply this system to you as well.

Plans of retiring and slowly wandering aimlessly around Europe drinking wine and eating French cheese on crusty bread are slowly diminishing

[boatman61]

Originally Posted by Pete7

Plans of retiring and slowly wandering aimlessly around Europe drinking wine and eating French cheese on crusty bread are slowly diminishing

Cheer up mate.. the good days will return..

[B23iL23]

Originally Posted by Pete7

Plans of retiring and slowly wandering aimlessly around Europe drinking wine and eating French cheese on crusty bread are slowly diminishing

Hey there's always Brighton and the pier. Substitute soggy fish and chips and warm beer. Just close your eyes and you could be anywhere.

[Pete7]

Originally Posted by B23iL23

Hey there's always Brighton and the pier. Substitute soggy fish and chips and warm beer. Just close your eyes and you could be anywhere.

Plan B was to go norf, if the Scots haven't declared independence before hand

Originally Posted by boatman61

Cheer up mate.. the good days will return..

Will the EU let us back in again if we ask nicely

[Dockhead]

Originally Posted by Pete7

Plans of retiring and slowly wandering aimlessly around Europe drinking wine and eating French cheese on crusty bread are slowly diminishing

There's bound to be a deal which will allow that. The Euros have a couple million of their own in the UK whom they don't want subjected to onerous conditions. Have faith.