Avoiding VAT in Europe

[denverd0n]

Originally Posted by Lizzy Belle

Same goes for the US - pretty sure I'd have to pay for importing a boat, if I had any plans to do so?

Yes, you would. The only difference being that the tax will be based on the value of the boat when you import it, and not on whatever you paid when you originally bought it.

[reed1v]

Originally Posted by denverd0n

Yes, you would. The only difference being that the tax will be based on the value of the boat when you import it, and not on whatever you paid when you originally bought it.

Depends on the state. Californicate laws allow you to take delivery off shore and then you avoid sales taxes. Take possession in the state and your socked with a virtual VAT tax. Some states just do not care. And reality is that a lot of folks just do not declare a foreign purchased boat. They bring it in, document it, insure it, and that is that.

[helise]

Originally Posted by sailing_gal

I am considering moving myself and my boat to Spain from the US. I am thinking that it is possible I may decide to become a Spanish resident but would like to avoid VAT tax on my boat. I understand that I could retitle the boat into a Corporation, but I prefer not to do that. I would like to transfer the title to a US Living Trust, and am wondering if that would get me the same desirable results. Also, I am concerned what that would do to my insurance rates and the mortgage on the boat. Would I have to refinance it? Has anyone done that?

No way to avoid VAT, if you register your yacht in EU and they are not stupid! Register your yacht under Langkawi International Yacht Registry (LIYR), tax free! . The safe way to entering EU and ask for a cruise permit you will get 18 months (for the boat) you might only get 3 months for yourself and you have to go and come a couple of times as you 3 month expires. Then go outside EU with the boat at end of 18 months stay out and come in with a new cruise permits of 18 months.

Remember, Tax Fraud is a crime...Good luck!

[K_V_B]

Originally Posted by helise

No way to avoid VAT, if you register your yacht in EU and they are not stupid! Register your yacht under Langkawi International Yacht Registry (LIYR), tax free! (www.facebook.com/LangkawiRegistry or Info.Marine@rocketmail.com). The safe way to entering EU and ask for a cruise permit you will get 18 months (for the boat) you might only get 3 months for yourself and you have to go and come a couple of times as you 3 month expires. Then go outside EU with the boat at end of 18 months stay out and come in with a new cruise permits of 18 months.

Remember, Tax Fraud is a crime...Good luck!

Can you explain to me why I should entrust something important as your yacht registration to a company who's idea of a homeage is a facebook page?

Secondlay, you can't take advantage of temporary importation when you are a EU resident. Remember that the OP intends to take up residency in Europe. That means he doesn't qualify for Temporary Importation Relief, and this regardless of where the boat is registered.
It does mean that the OP might be able to take advantage of Transfer of Residence Relief.

[Drifty]

I really think you should pray that EU tax authorities are not monitoring this sight

[George DuBose]

I am a US citizen with a unexpiring visa for Germany. My boat is in the Netherlands.

It's not as big a deal as some people assume. I submitted a low bill of sale for an old boat. No questions. Paid VAT on that low price.

Shopped around for a firm (wide range of quotes) to make a PCA survey and found a reasonable price from one outfit and when the inspector finished with the boat, he said that there were so few "defects" that needed rectifying that the firm dropped the price another 1000 euros. I paid 2200 euros for the PCA, the boat is now completely CE marked, VAT paid and I can still fly the Stars and Stripes. My boat is USCG documented, so state registration in the US doesn't apply and I am not forced to change the flag.

I do have to check in and out of European countries as I have a US passport, wouldn't matter what flag the boat is flying.

A European "resident" with a resident visa has 30 days to pay the VAT and start the PCA procedure.

If one can PROVE that the vessel was in any European country or colony prior to 1998, then all the above doesn't apply.

[sailing_gal]

I am not interested in doing anything illegal, I am not willing to risk my boat! However, like US Tax Law- where I earn my livelihood helping entities find ways of decreasing their tax liabilities- LEGALLY, there are often legal loopholes- that is what I am looking for. I see that there are different VAT rates for different EU members, so, I am just looking to save money the best I can.

[K_V_B]

Originally Posted by sailing_gal

I am not interested in doing anything illegal, I am not willing to risk my boat! However, like US Tax Law- where I earn my livelihood helping entities find ways of decreasing their tax liabilities- LEGALLY, there are often legal loopholes- that is what I am looking for. I see that there are different VAT rates for different EU members, so, I am just looking to save money the best I can.

Look if there is a way you can benefit from transfer of residence relief. See the link I posted earlier.

[sailing_gal]

KVB's posting is very interesting. I have read the article he attached. So, perhaps, since I paid sales tax on the boat when I purchased it in the U.S., it is possible I may not owe VAT on it when bringing it into the EU. I must look into specifically what they mean by "tax paid" in that section of the document.

Thank you!

[Kenomac]

Originally Posted by sailing_gal

KVB's posting is very interesting. I have read the article he attached. So, perhaps, since I paid sales tax on the boat when I purchased it in the U.S., it is possible I may not owe VAT on it when bringing it into the EU. I must look into specifically what they mean by "tax paid" in that section of the document.

Thank you!

Hire a customs specialist or ask the tax authority yourself. The VAT laws and rules differ from country to country. Example: I can legally keep my boat in Italy for up to three and a half years using customs bond agents, three years in Spain and only 18 months in Greece.

Depending on the value of your boat, which you have not mentioned, mistakes can be very costly. I've found the best source, is going directly to the tax authority and getting the answer in writing. Forget about the Internet CF experts and reading articles, because when the SHTF.... You're going to need the rules specific to your case in writing directly from the specific country's taxman.

Been there, done that. This advice coming to you from someone who's been in the situation where the S almost HTF.

[sailing_gal]

Will definitely be talking to the Spanish to ask the questions. What I am getting here is an understanding so I know what questions to ask. For example, part of my problem is that I am contemplating becoming a Spanish resident, staying there more than 6 months a year. If it weren't for that, I know I could avoid the VAT and Schengen rules fairly easily. I also have a resource in Spain who is making inquiries. However, from what I have been told about the Spanish authorities, a rule today might not be the rule tomorrow!
And the rule quoted by one official, might not be the rule quoted by another. Apparently, many of the officials in the EU don't understand the rules themselves.

[Kenomac]

Originally Posted by sailing_gal

Will definitely be talking to the Spanish to ask the questions. What I am getting here is an understanding so I know what questions to ask. For example, part of my problem is that I am contemplating becoming a Spanish resident, staying there more than 6 months a year. If it weren't for that, I know I could avoid the VAT and Schengen rules fairly easily. I also have a resource in Spain who is making inquiries. However, from what I have been told about the Spanish authorities, a rule today might not be the rule tomorrow!
And the rule quoted by one official, might not be the rule quoted by another. Apparently, many of the officials in the EU don't understand the rules themselves.

That's because despite what you read here on CF, the EU rules and tax laws regarding VAT are not universal, they differ from one country to the next. The tax laws also change. Enforcement of the tax law also varies along the Spanish coast depending on which region you visit.

May we ask how much tax your looking at? If it's less than 10-20k euros and you plan on staying, just pay the tax or document your boat in Malta, where they offer a tax lease payment option. On our boat, we would face a 150-175k tax, so moving the boat in and out of the EU, hiring tax specialists and customs agents is much cheaper. But... We do rely on professionals in the field... not internet experts.

[sailing_gal]

I figure I am looking at 35K Euro VAT at a minimum. So, I do need to find some good advice. I have been told by other Spanish residents in the maritime industry that the Spanish may require one thing in one port, and something else in another and that the rules are not uniformly enforced, nor uniformly interpreted by the local customs agents.

For that kind of money, I can just fly back and forth enough to ensure I do not become a Spanish resident.

[1234 Thunder]

Originally Posted by davewtsnape

Pay the tax, and keep our taxes down Why do people think it's OK to avoid tax?

Because government's appetite for tax dollars is insatiable. Government's own studies (so it is probably higher) report waste and inefficiency routinely at 10% to 15% of expenditures.

They refuse to become efficient so I refuse to feed them. That simple.

[hellosailor]

" However, from what I have been told about the Spanish authorities, a rule today might not be the rule tomorrow! "
That is true even in the US. Major changes tend to go into effect January 1st, but all sorts of laws go into effect on an everyday basis, simply being passed by an act of Congress and then published in the Congressional Register. 90 days later, whatever date that is, the world changes.
And that's ignoring the states, some of which do two annual legislative sessions and major rule changes as well.