Avoiding VAT in Europe

[Toys_with_time]

Originally Posted by northwestsailor

We are US citizens and residents. I do realize, we as US citizens, would only be allowed 90 days in EU but that could be renewed by moving about a bit, I suppose. Or in and out of EU?

The 90 days doesn't renew by moving in and out or around. The clock starts when you go into a Schengen country and stops when you leave a Schengen country for a non Schengen country and then re-continues when you go back into a Schengen country. The clock does not reset for 6 months after the date of your first entry into a Schengen country ie you can have a maximum of 90 days in every 6 months whether those 90 days are contiguous or not.

TwT

[valhalla360]

Originally Posted by northwestsailor

I do realize, we as US citizens, would only be allowed 90 days in EU but that could be renewed by moving about a bit, I suppose. Or in and out of EU?

s.

You (as a person not a boat) must leave after 90 days for at least 90 days.

In reality, you have to look back at the last 180 days and it can have at most 90 days inside the Schengen area.

So moving about if it includes time outside the Schengen helps. Taking a day trip from say France to Italy and back does nothing because you never left the Schengen.

The boat and VAT is a seperate issue. As a US citizen, the boat can stay for 18 months (extendable up to 24months) and the clock can be reset by leaving for a day and returning.

[valhalla360]

Originally Posted by markpierce

Don't understand. So, if one has already paid sales/use tax for a boat in the USA (as much as nine or more percent), is one subject to VAT upon bringing the boat for an extended time in Europe? Do the European taxing authorities give credit for previous taxes paid? Is taxing twice/multiple times the European tactic? Doesn't make sense to pay VAT if boat was purchased an extended time before moving to Europe. Fortunately, VAT hasn't been assessed on baggage (clothing, valuables, and such) when I've visited Europe.

No they don't reduce it by the amount you paid in the USA.

Also VAT runs around 20%, so 9% still leaves quite a bit of tax.

Your baggage doesn't get taxed because it is presumed to go back with you when you leave after a week or two. If your boat stays for 5yrs, it's assumed to have been imported permanently.

[Nicholson58]

Originally Posted by 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.

Does this mean that my 1984 Camper & Nicholson, Built in Gosport Hampshire UK is exempt? (USCG documented)

[med]

Originally Posted by Nicholson58

Does this mean that my 1984 Camper & Nicholson, Built in Gosport Hampshire UK is exempt? (USCG documented)

No. It is more complicated than that as the boat may have been exported in the meantime.

Then VAT is due again on import unless it is covered by the "returning goods" regime (which only applies if on reimportation the boat is owned by the same owner who did the exporting, has not changed hands between export and import). This is also the case where VAT was paid when the boat was purchased, and even in the case if the boat was imported, and a receipt for the VAT paid was received from customs.

If you have owned the boat for a minimum amount of time (for most countries in the EU 6 months) and you are moving to the EU to take up residence, then you can import the boat at the time you take up residence without paying any VAT (and get an official document confirming this). This boat can then be sold in the EU after a further minimum amount of time (again typically 6 months) without VAT being due - it counts as a VAT paid boat.

There is not really such thing as "exempt". A boat built before VAT was introduced, which was in the EU on the date VAT was introduced in common with cars and any other common goods was deemed to have had the VAT liability paid (as there is no receipt with VAT on it).

Once you export a boat from the EU, the VAT paid status is lost and VAT will be due again on reimport on the market value at the time of import unless the boat has not changed hand and is being reimported by the same owner.

Note that not all of this will necessarily be thoroughly checked and controlled. Your average customs officer will not necessarily know or have the means to find out if an average boat was ever exported from the EU. (I am sure they keep detailed records for super yachts though).

[hoppy]

It doesn't look like anyone has mentioned in the thread that the OP will be liable to the matriculation tax as a resident of Spain. That's another 12%....

[UNCIVILIZED]

Who was it that said "The IRS is more ruthless/viscious than the Mafia"? As it's sounding like said theme is pretty universal, regardless of what the taxing body is named, or what country it happens to be in/from. - UGH!

That said, all of this is good info to know/keep on hand. My thanks to all of the contributors.

[hoppy]

Originally Posted by UNCIVILIZED

Who was it that said "The IRS is more ruthless/viscious than the Mafia"? As it's sounding like said theme is pretty universal, regardless of what the taxing body is named, or what country it happens to be in/from. - UGH!

That said, all of this is good info to know/keep on hand. My thanks to all of the contributors.

Only the IRS expects all citizens to send in tax returns and only the IRS forces foreign banks to report deposits of US citizens even if they are long term residents of that country.

US citizens can migrate to Europe and perhaps hide from the Mafia but never the IRS