Port procedures when changing ownership and flag while in Tunisia

[CookiesnTequila]

Originally Posted by Sindbad

If you are in Port Yasmine, just go to the customs office in the marina and ask them. From my experience they have been always very helpfull.

Unfortunately we are not there, but that is where the boat is, and we are working on getting someone to do just that.

Thanks

[Seaworthy Lass]

Originally Posted by Sindbad

I am not a tax expert, but did some research before we bought our boat. If the sale of an EU flagged boat takes place outside EU waters, VAT is lost.
I wonder what makes your case so special. Better get a second Professional opinion.
But actually this is only relevant, when you want to sell the boat again to somebody in the EU.

No, it is also very relevant if you leave your boat in the EU for longer than 18 months. You will be subject to VAT if you do.

[CookiesnTequila]

Originally Posted by Seaworthy Lass

No, it is also very relevant if you leave your boat in the EU for longer than 18 months. You will be subject to VAT if you do.

Correct, and since we are dual Canadian/EU citizens (with lots of family in the EU), soon to be without residence anywhere (inshallah, as they say in Tunisia), we might very well wish to become EU residents ourselves one day! Which is why we spent the time and money to engage a French maritime lawyer to answer this very specific question! We do not want to loose the VAT status!!

So, just to be sure there wasn't some sort of Canadian to French miscommunication - I just asked him again! And now I shall hold my breath until tomorrow and hope that I get the same answer I got the last time!!!

[Seaworthy Lass]

Originally Posted by CookiesnTequila

Correct, and since we are dual Canadian/EU citizens (with lots of family in the EU), soon to be without residence anywhere (inshallah, as they say in Tunisia), we might very well wish to become EU residents ourselves one day! Which is why we spent the time and money to engage a French maritime lawyer to answer this very specific question! We do not want to loose the VAT status!!

So, just to be sure there wasn't some sort of Canadian to French miscommunication - I just asked him again! And now I shall hold my breath until tomorrow and hope that I get the same answer I got the last time!!!

I would send a PM to one of our members: Goboatingnow. He has an excellent grasp of current EU regs and is likely able to point you to the relevant bit of legislation either way.

What is critical is not what legal advice you have received, but how EU laws are applied. Try arguing with an official who has impounded your boat or try suing your solicitor if the wrong advice has been given .

[Sindbad]

Originally Posted by CookiesnTequila

Correct, and since we are dual Canadian/EU citizens (with lots of family in the EU), soon to be without residence anywhere (inshallah, as they say in Tunisia), we might very well wish to become EU residents ourselves one day! Which is why we spent the time and money to engage a French maritime lawyer to answer this very specific question! We do not want to loose the VAT status!!



So, just to be sure there wasn't some sort of Canadian to French miscommunication - I just asked him again! And now I shall hold my breath until tomorrow and hope that I get the same answer I got the last time!!!

Now this is another aspect. I am German, but my residence is outside of the EU, therefore import, VAT, etc. issues I have to deal with regularly. If it is complicated, I contact the German customs and they give me always good advice. You should contact the customs at your EU country.
And another issue, but this may only apply in Germany: if a German has his residence in Germany, his boat must be registered in Germany. check with your country what are the rules, if you want to become a resident.


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[goboatingnow]

Originally Posted by Seaworthy Lass

I would send a PM to one of our members: Goboatingnow. He has an excellent grasp of current EU regs and is likely able to point you to the relevant bit of legislation either way.

What is critical is not what legal advice you have received, but how EU laws are applied. Try arguing with an official who has impounded your boat or try suing your solicitor if the wrong advice has been given .

I have PMed, the OP, and your exactly right SL, its the optics that actually matter.


Technically both the boat and the buyer are outside the EU , VAT is lost in that case. ( remember VAT isn't an asset tax, its accounted for on EVERY sale, purchase, export or import) The owner is currently availing of RGR ( returned goods relief) to avoid re-paying VAT every time he sails her back into the EU, that relief is lost of the boat is sold while outside the EU. Technically the owner should firstly reimport the boat under RGR rules, and then sell the boat to EU in a EU addressed transaction. Reflagging has no impact on VAT, but unfortunately , a bit like profiling at airports, it makes customs officials look up and check the paperwork.

In practice, well, thats as long as a piece of string.

[goboatingnow]

Originally Posted by sailersteve

Can't you just sail out to international waters make your deal and pay no tax ? To anyone !

No actually, the laws of either the buyer or seller, may have to be applied.

[goboatingnow]

Originally Posted by Sindbad

Now this is another aspect. I am German, but my residence is outside of the EU, therefore import, VAT, etc. issues I have to deal with regularly. If it is complicated, I contact the German customs and they give me always good advice. You should contact the customs at your EU country.
And another issue, but this may only apply in Germany: if a German has his residence in Germany, his boat must be registered in Germany. check with your country what are the rules, if you want to become a resident.


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The last people to give you good advice, are the customs, the ECJ is full of VAT cases between EU people, companies and relevant national tax authorities, and the tax authorities regularly loose too. !!!. ( The Uk HMRS, is currently returning vast amounts of VAT on green fees to non members of golf clubs as a result of a recent ECJ judgement , for example )

You will notice that most tax authorities, will not give you a 100% determinant answer, they will merely tell you that based on what they known, x or y is the position, When you screw up, they will say, ah well , you never mentioned Z!!!!

[Sindbad]

The last people .....my goodness, you like to exagerate, don't you? Better ask people on the internet and take their advice as granted. And good luck when you are going to sue them, if something goes wrong.




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[multihullsailor6]

Whilst registration your boat in your name is one issue, I would be concerned about the European VAT issue:
- Has the current French owner paid VAT on the boat?
- If so and if the VAT status is lost because of the place where the sale took place and your nationality you might want to reposition the boat back into European waters before effecting the sale.
- If no, then you can sail in European waters for up to 18 months before VAT is due. You can sail to a non-European country before the 18 months period ends and return to Europe and the 18 months starts again. This is on the boat, not on the persons aboard, a totally different scenario exists here.

I am South African and bought my boat in Holland from an English man who lived in Germany. VAT on the boat was paid in Holland, I have a Dutch certificate to that effect which was good enough for the British and French Customs when I showed it to them including my own translation thereof.

[goboatingnow]

Originally Posted by Sindbad

The last people .....my goodness, you like to exagerate, don't you? Better ask people on the internet and take their advice as granted. And good luck when you are going to sue them, if something goes wrong.




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My personal experience is that customs officers have a very narrow range of expertise,

The " last people" is more a turn of english phrase, but I would seek out advice from taxation experts first, but ultimately you will not get any guarantees and will have to take a view yourself.

as for advice on the internet, its probably as good or bad as elsewhere. in reality you have to evaluate all advice yourself.

[Seaworthy Lass]

Originally Posted by multihullsailor6

Whilst registration your boat in your name is one issue, I would be concerned about the European VAT issue:
- Has the current French owner paid VAT on the boat?
...
- If no, then you can sail in European waters for up to 18 months before VAT is due. You can sail to a non-European country before the 18 months period ends and return to Europe and the 18 months starts again. This is on the boat, not on the persons aboard, a totally different scenario exists here.

The OP had stated he is a dual Canadian/EU citizen.

If he intends to sail in the EU as an EU citizen (and therefore without the Schengen restrictions), I may be wrong, but I don't think he has the luxury of 18 months without VAT being due.

[Sindbad]

Originally Posted by goboatingnow

My personal experience is that customs officers have a very narrow range of expertise,

.

Agreed, but I was not talking about some officer, but an online service the German custom provides. You contact them through their website or via email, they open a ticket and get back to you within a few days with excellent advice. Worked for me very well so far. And if you send your request in English, they will reply in English as well.
Just wondering if other EU countries provide a similar service.
Here is the link: Customs online - Enquiries

[CookiesnTequila]

Thank you all for your thoughts.

So here's what we've landed on - for now at least, and subject to how badly you all pick this apart!!:

1) we will have confirmation of VAT being paid
2) we will close the purchase while the boat is in Tunisia, and reflag the boat Canadian (being Canadian flagged means a lot to us)
3) when we go sailing we will be non-resident Canadian and EU citizens (dual), cruising in and out of the EU in a VAT paid boat. If a particular country doesn't recognize the VAT paid status, for whatever reason, we simply rely on the 18 month rule, which is more than enough for our purposes.
4) if 2, 3, 5, 20 years from now we actually do have an opportunity to sell the boat to an EU resident, and they don't accept our VAT paid documentation, and it actually does make a material difference in the sale price, we can always take up residency in the EU (if we hadn't already done that by then), in which case the boat will for sure get VAT paid status.

I hear and get the technical issue of where the boat is located at the time of the sale, however in reality, there is no real method for anyone to confirm where the boat was physically when the sale occurs, as unlike people, the location of a boat is not tracked, and the likelihood of that question even arising is in our opinion very slim.

Ps - We will look into the German help service - that could be helpful for other things also!

Thanks again....
Cheers
C

[CookiesnTequila]

Originally Posted by Seaworthy Lass

The OP had stated he is a dual Canadian/EU citizen.

If he intends to sail in the EU as an EU citizen (and therefore without the Schengen restrictions), I may be wrong, but I don't think he has the luxury of 18 months without VAT being due.

Is that the case for non-resident citizens? I might be wrong, but I thought taxes are only due if you are a resident. Our guess is that we are going to present enough confusion to any customs official that even thinks of challenging us, that they won't!!!

What we have also not done yet, but need to do, is choose a place of residence. But that is for another day and another thread!!