VAT, EU, British, Non Res.

[davedindubai]

Hi all,

I'd like some clarification please on just what I'm allowed to do.

Here's my specifics:
British passport
British registered vessel
Non resident from the UK with my home address as Dubai
I registered our boat in UK as at the time of purchase I lived in Dubai and planned to export the boat so did not pay VAT.

We bought a new boat in France, launched in June 2017 and spent the summer sailing Spain, Italy, France then stopped in Gibraltar and departed from there for the Canaries and then to the Caribbean. We didn't get passport stamps but the marina in Gib cleared us out. We cruised the Caribbean up to Miami where we departed by plane and the boat is currently headed for Portugal. Our delivery skipper has cleared the boat out of Miami for us.

My home address is still Dubai, however, I'm not actually sure if I'm resident there as I haven't spent 90 days there this year (I haven't spent 90 days in any one place) but I am most definitely not resident in the UK.

So the boat will arrive in Portugal without us and the delivery skipper will clear customs for us. What do we need to do when we fly from UK to the boat in Portugal in October?

We will sail for Gibraltar and plan to stop there if only for a few days and will clear in / out before sailing to Spain.

We want to spend around 16 months cruising the Med with an eye on crossing the Atlantic again Jan 2020.

My understanding from the HMRC (UK tax) website is that I can spend 18 months in the EU before I am liable for VAT hence my plan above. Is there somewhere I need to make an application for this temporary admission visa?

I also understand I can spend up to 6 months in any 1 EU country before I am liable for income tax in their country? I still have an income which mostly arises in the UK and therefore I pay UK income tax and do not want to complicate this.

Please no UK income tax advice is needed. I just need help with the EU stuff and the VAT to make sure I'm doing the right things. As a Brit, do I need to clear in / out of EU countries and do I need evidence such as a passport stamp to show where I have been?

Also, can anyone recommend me an immigration specialist, ideally based in the UK but if not then English speaking. I've tried a couple with no reply.

Thanks in advance.

[davedindubai]

I've read a million pages online and this seems to be the most helpful but any other links are most welcome:

http://www.registerayacht.com/vat-pa...ion-admission/

[atoll]

the issues you will have will be with the local customs and tax office starting from the day the boat arrives in the EU,then it will be up to you and your tax lawyer to prove your non-resident status to the local customs who will when satisfied issue you with a temporary import permit.

immigration will not be an issue as you have a uk passport,and are allowed 183 days out of 364 in the eu each year to keep that non resident status.

your accountant in the uk must be able to prove your non resident status in the uk for tax purposes,this information your tax lawyer in portugal will need to prove to the local customs.

alternatively if you have an immigration residence permit for a country outside the EU this will generally satisfy the customs,that you are a non resident in the eu,and issue a TIP.

[vonotto]

Just something that jumped out when I read it.....you said you didn't get your passport stamped. I would think if you were trying to show you were or were not a resident somewhere this would be a huge reason to make sure you DO get your passport stamped...everytime.

Just an observation/question not a critique.

[conachair]

Originally Posted by atoll

immigration will not be an issue as you have a uk passport,and are allowed 183 days out of 364 in the eu each year to keep that non resident status.

Sorry for the drift dave dubai, but that's new one. any links? Nothing on google. Are you saying for UK domiciled you can only stay in the EU for half a year to keep UK non res status? Sounds very odd...

[davedindubai]

Originally Posted by conachair

Sorry for the drift dave dubai, but that's new one. any links? Nothing on google. Are you saying for UK domiciled you can only stay in the EU for half a year to keep UK non res status? Sounds very odd...

Not at all, this will be crucial for me so very keen to see some literature on this

[davedindubai]

Originally Posted by vonotto

Just something that jumped out when I read it.....you said you didn't get your passport stamped. I would think if you were trying to show you were or were not a resident somewhere this would be a huge reason to make sure you DO get your passport stamped...everytime.

Just an observation/question not a critique.

Yes agreed. I probably should have. We did in the Caribbean and USA but I guess we are just accustomed to travelling freely around Europe. My mistake

[conachair]

Originally Posted by davedindubai

Not at all, this will be crucial for me so very keen to see some literature on this

Suspect it's a typo and meant 180 days in the UK, which as you no doubt know is just one possible part of a complex set of criteria . Re the passport stamping in every EU country - what a nightmare that would be top get done on a boat! My accountant (I'm long term non res as well) said bank statements showing cash machine/purchases should be plenty to give to the Revenue should they show some interest in your time spent in the UK. Finding immigration and getting them to stamp a UK passport while sailing would not be the easiest....

[atoll]

Originally Posted by conachair

Sorry for the drift dave dubai, but that's new one. any links? Nothing on google. Are you saying for UK domiciled you can only stay in the EU for half a year to keep UK non res status? Sounds very odd...

yes and no!
to be non- resident in the uk and not pay tax on your foreign income it is only 90 days a year you can be resident in the uk this is for people with work contracts overseas.

in the eu you can be a resident for only 6 months out of 12,otherwise you are seen as being a full time resident and then become liable to pay income tax in that eu country ,if you are not paying tax in another eu country.

the rules are more aimed at people who live on the land in property that they own locally and have retired,where they can also benefit from paying a lower rate of income tax in the country of residence,rather than then in uk for example,but to do this you must be resident for more than.183 days of the year in the eu country of residence to qualify.

however since dave pays income tax in the uk on income earned there ie inside the EU this rule is probably not applicable to him,but might effect his not paying tax on income earned outside the EU if he is resident in any one eu country for more than 6 months.

the yacht is a seperate issue entirely and is liable for vat immediatly on return to the eu,unless he can prove that he is not an eu resident or not liable to pay tax in the eu and /or uk.

he can avoid paying tax on the boat and be elidgable for a temporary import permit for 6 months,renewable upto 18 months.
(1)if he has a non eu passport
(2)if he has a residence permit for a country outside of the eu.
(3)if he can prove for tax purposes that he is not liable to pay tax on his overseas income or possesions,due to being non- resident.

his first challenge will be to get issued the TIP for the boat on arrival in the eu,for the initial 6 months,after that it is just a case of renewing it,or applying for a new one after leaving eu waters for ~24 hours,which resets the clock

[conachair]

Originally Posted by atoll

yes and no!
to be non- resident in the uk and not pay tax on your foreign income it is only 90 days a year you can be resident in the uk this is for people with work contracts overseas.

in the eu you can be a resident for only 6 months out of 12,otherwise you are seen as being a full time resident and then become liable to pay income tax in that eu country ,if you are not paying tax in another eu country.

OK, nothing to do with in the EU as a whole, just individual countries.
Having done non res more than once it is actually a lot more complex than simple days in the country. If they think you are trying it on they might well come after you - should anyone else come across this thread.

Enough drift - back to the boat

[atoll]

Originally Posted by conachair

OK, nothing to do with in the EU as a whole, just individual countries.
Having done non res more than once it is actually a lot more complex than simple days in the country. If they think you are trying it on they might well come after you - should anyone else come across this thread.

Enough drift - back to the boat

here is the uk non res test,which if you can pass will satisfy other eu member states, if you have proof from the uk tax office you are currently eligable and do not pay tax

https://www.expertsforexpats.com/exp...esidence-test/

[davedindubai]

OK, super helpful so far, thank you.

With regard to the 90 day rule, I'm good. I think so far this year I've done 28 days in the UK and it's very easy to prove where I've been as I've a tonne of Caribbean stamps in my passport.

I will not spend more than 6 months in any one EU country (we tend to move on after a week or so although i'd like to slow this down now).

That link is awesome thank you Atoll!

[atoll]

Originally Posted by davedindubai

OK, super helpful so far, thank you.

With regard to the 90 day rule, I'm good. I think so far this year I've done 28 days in the UK and it's very easy to prove where I've been as I've a tonne of Caribbean stamps in my passport.

I will not spend more than 6 months in any one EU country (we tend to move on after a week or so although i'd like to slow this down now).

That link is awesome thank you Atoll!

just make sure when the cat arrives in portugal proper(probably no issues in the azores if not staying) that you apply for the first 6 month TIP permit.

a letter from the uk tax office should suffice as proof of non res status.
or if you have a dubai/emirates resident permit in your passport or paperwork to support this.

you may need to get a certified copy if you can't be there in person.
it might also be useful to use a customs clearing agent.

remember the ounus is on you to prove to the customs with supporting documents that you are a bonafide official non resident of the eu and uk, and a bonifide resident of a country outside the eu.

just entry and exit stamps in your passport are not proof of non residence as far as the customs are concerned when it comes to vat exemption on your boat..if you fail to do this then quite likely they will seize the boat untill vat has been paid in full or you can prove you are eligable for an exemption or TIP.

i've been through the whole process,and boy do they like nice shiny luxuary items that potentially could pay their paychecks!

[kas_1611]

Sadly residence does not come into this.

You are an EU citizen bringing your boat into EU waters so are liable for Import Duties and VAT at the point of entry. No escaping it.

Doesn't matter if you register the boat in Marshall Islands, Caymans or any other tax haven or if you are only going to be in EU waters for 16 minutes let alone 16 months.

I faced the same issue with our non VAT paid boat when Croatia joined the EU. Trust me there is no way around an EU citizen having to pay VAT on their boat as soon as they clear into an EU state for the first time.

[atoll]

Originally Posted by kas_1611

Sadly residence does not come into this.

You are an EU citizen bringing your boat into EU waters so are liable for Import Duties and VAT at the point of entry. No escaping it.

Doesn't matter if you register the boat in Marshall Islands, Caymans or any other tax haven or if you are only going to be in EU waters for 16 minutes let alone 16 months.

I faced the same issue with our non VAT paid boat when Croatia joined the EU. Trust me there is no way around an EU citizen having to pay VAT on their boat as soon as they clear into an EU state for the first time.

my experince has proven otherwise,as a uk citizen holding permernant residence in south africa, my uk registered yacht was treated like any other foreign visiting yacht and issued with a TIP on arrival in cyprus once i had shown the customs my SA residence certificate proving non-residence in the EU.

i have done this twice with 2 different yachts entering the EU