US Flag Vessel in European Waters

[Birdy]

Hi everyone!

I’ve looked this topic up numerous times and I think I somewhat figure it out. But it’s quite complicated and I wouldn’t mind some more relevant input.

Here’s the situation. We have a US flagged vessel that was built in UK in 1983. She was flagged British up to 2019. All crew (cruising family) have double passports US/European.

Here’s my understanding of the law:

1) VAT: As our boat is 30+ years old we are exempt from any VAT taxes or potential fines ~ grandfathered in. (VAT was paid both in UK and in US by previous owners.)

2) Schengen - irrelevant to us as we have double passports.

3) checking in with foreign flag - Is this something we MUST do each time we change countries within the EU? Or are we exempt due to our situation?

4) Must we comply with the 18month rule? Is simply showing up with our vessel in Montenegro/Gibraltar resetting the 18 month rule?

How do we go about all this? Do we need any extra paperwork to support all this? For example, is there such a thing as paperwork that states the exemption status of our vessel due to age?

If anyone has any good links to formal government websites with info about this, I would greatly appreciate it. Our situation isn’t quite cookie cutter (as so many things on boating).

I believe I have it figured out, but it always seems like quite the hassle and I keep questioning myself.

Thank you for your input!

[Wuff]

Hello Birdy,

I admit that EU regulations can be complicated, but I think I can explain your case. But please double check, as I am neither a tax nor a legal expert.

1) You are correct - as a US citizen you are allowed to enter EU waters with your (non-EU) boat for 18 months without paying import tax. However, I'm afraid you will have to make a temporary and non-formal importation of your boat, but you can do so without paying tax. This must first be done in the country where you land.

2) All EU residents must pay tax on boats longer than 7.5 meters. If you have a British or Norwegian passport, you are of course not an EU citizen. If you also have an EU passport, I can't tell you what to do without checking. I think it is important that you are not considered an EU citizen because of your dual passport but I don'T think so.

3) The VAT paid in 2019 would have been accounted for because the UK was part of the EU at the time, but after three years outside the EU it is no longer valid anyway.

3) If you leave the EU, you can re-enter immediately and the 18-month tax-free period starts again. BUT this must be proven by clearing out and clearing in.

4) Unfortunately, the tax exemption for older boats has been vanished, so you will have to pay the relevant tax if you want to permanentely import the boat. This must be done in the country you first enter.

5) You must clear in and out each time you leave and enter Schengen. If you are traveling within the Schengen area, e.g. from Spain to Croatia, you do not have to clear in and out as long as you do not touch any other countries (e.g. the 12 nm border of Albania). Please note that you cannot clear in at every port and that this must be done within 12 hours of arrival.

6) If you have a Schengen passport, you can move freely within Schengen. Please note that Norway is also a Schengen country, although it is not part of the EU.

This link is in English. It is about temporary entry into other EU countries. It depends on where you land first. I'm not German, but for me this is a good summary

https://skipper.adac.de/en/customs-duty-vat/

I have a problem with a boat coming from the UK and lying in Italy for many years without paying taxes. I am Austrian and I bought the boat, so I have been investigating the situation for several months. That is the reason for my opinion.

Cheers Wolfgang