Avoiding VAT in Europe

[northwestsailor]

Originally Posted by davewtsnape

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

There is a big difference between tax avoidance and tax evasion. The first is legal and encouraged by most taxing authorities. The latter is illegal.

[boatman61]

Originally Posted by Lizzy Belle

I'm from the Netherlands, and same here. No address on land means you're homeless as far as the government is concerned.

Not the best 'administrative state' to be in. Can't get insurance or pay taxes etc., which may sound good to some but it just means they'll hit you the minute you turn op somewhere. And you will, cos you need a passport etc. so sooner or later, you'll find yourself at some civil servant's desk.

Pretty much every liveaboard has a land address with a family member / friends etc. to avoid all that. Not an ideal solution cos it's usually a postal address which is only good for 6 months, but you can make it work. It's a bit of a headache tho.

Makes me wonder how I survive..😉

[nauticalnomad]

Originally Posted by Lizzy Belle

I'm from the Netherlands, and same here. No address on land means you're homeless as far as the government is concerned.

Not the best 'administrative state' to be in. Can't get insurance or pay taxes etc., which may sound good to some but it just means they'll hit you the minute you turn op somewhere. And you will, cos you need a passport etc. so sooner or later, you'll find yourself at some civil servant's desk.

Pretty much every liveaboard has a land address with a family member / friends etc. to avoid all that. Not an ideal solution cos it's usually a postal address which is only good for 6 months, but you can make it work. It's a bit of a headache tho.

I was a liveaboard in Scheveningen for 3 years and got by with no address. I moved into a short term share accommodation for 4 weeks registered with the gemente (Like one registers their dog, Which i feel is not normal and very nazilike) Then got a bank account and then moved back out onto the boat. The bank statements are electronic and thats all i care about. The boat is UK registered as is the insurance. I dont need a local address for my boat insurance and they dont ask for identification. Just fill in an address on the insurance quote form. The insurance address is the home port of the boat and the boat is cruising in Europe and the insurance company is aware of the boat not in its home port.
I dont agree with paying tax into a system which you arent going to benefit from....

[nauticalnomad]

Originally Posted by davewtsnape

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

The amount of tax you pay is not determined by what they think is being avoided by others..

[Lizzy Belle]

Originally Posted by nauticalnomad

registered with the gemente
>|<
I dont agree with paying tax into a system which you arent going to benefit from...

What makes it difficult here in the Netherlands (and probably elsewhere too) is that every gemeente has it's own ways of doing things.

I'm in Rotterdam, and I can use the marina's address (which is, stricktly speaking, against the law, but the gemeente is OK with it). They do not, however, allow people to register with the gemeente, eventho there's a law that says we can. A few people went to court to force Rotterdam to give them an address, those cases are still ongoing.

But this thread is about Spain, we're going off-topic. Sorry, OP!

I don't agree with many (tax) laws, but that doesn't mean I should break the law

[Moontide]

It appears that the Schengen countries are figuring out that it does not make sense to kick out long term tourists that are spending money. Looks like they are going to change the rules that will basically let you stay pretty much indefinitely. Think you will have to document income and health insurance. Will see if it comes to fruition.

[Krilleonnova]

Re Nautical Nomad -Australia must be very far from the nasty countries in N Europe
A fake -too low bill of sale will not help They will just haul out their "blue Book"
as it is called in case of cars and price your vessel after it and you have no say.
Plus if they have nothing better to do the start an investigation into possible fraud
while they keep you in the clink.
Only safe way enter and ask for a cruise permit you will get 18 months (for the boat) you might only get 3 months 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 I think its 6 months now and come in an a new cruise permits
Norway in spite it is outside EU does not count but St Petersburg or Kalinigrad
in the Baltic are ok so is North Africa and best is Turkey
On your cruise permit you can go anywhere in EU and out of EU and in again on same permit if it has not expired.
Some lucky guys have even managed to get a cruise permit extended the rules and
the people are very different in different countries within EU.
If you choose to pay VAT clear in in the Azores ( Portugal) they have an extraordinary low VAT just to provide business and income from cruisers

[sailing_gal]

Thank you for all the information. I have researched the Schengen rules, and those are not a problem. Spain treats you as a resident if you spend more than 6 months in a year there. I can get an extended visa, and I would not have a problem getting spanish residency. I will be stopping in the Azores on the way over, I hadn't read that they had a good VAT rate. Perhaps I will look into it when I stop there, otherwise, I will just be traveling in and out of Schengen countries to stay within the visa limits. Perhaps back to the US, it would just be nice not to have to do that. I have also heard that the entire Schengen rules may be under review, should be interesting. Thank you for all the input. I was told by a friend who used to captain a megayacht in the Med that if my boat belonged to a US Corporation, I could keep it in Spain with a letter that authorizes my use of the boat through the corporation, and since the corporation is not a Spanish resident, it would avoid the VAT. That is what I was looking into.

[northwestsailor]

Originally Posted by sailing_gal

if my boat belonged to a US Corporation, I could keep it in Spain with a letter that authorizes my use of the boat through the corporation, and since the corporation is not a Spanish resident, it would avoid the VAT. That is what I was looking into.

Please let us know what you found out and where. I personally would be very interested in type of information. Of course, it may change by the time I get there but just in case........

[Nicholson58]

Originally Posted by davewtsnape

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

If there is a legal way to avoid - then certainly. Excessive tax is an effective deterrent. One can only assume the authorities are intending to discourage boat ownership. Fair, modest and level taxing, equally applied allows the growth of boat businesses and all of the spin-offs. One only look at the history of illogical, ridiculous & punitive property taxes in the US on boats over 20 ft, cars over 50K, personal aircraft, jewelry and furs to see how effective this can be. The last round of this cost 4 of five famous boat builders in Michigan and 1/4 of all marinas to fold. Most exotic car sellers were gone. Many of the private FBO's (air fields) are gone too. All of the spin-offs gone as well. The net cash to the state turned negative after only a few years. Eventually repealed. They jacked up the hunting and fishing licenses here two years ago by 3-fold. Its looking like the same results. I quit and so did many others. The biggest business potential in Michigan with inland lakes, Great Lakes, forests is recreation, boating hunting, fishing. The State rapes the heck out of every practitioner. When you disproportionately tax the leisure activity of people, they will find other hobbies. Money is fungible.

[hellosailor]

With the recent news from Paris and Belgium and the Syrian refugee problems...Perhaps I am the only one who has heard/read several high ranking EU politicians say that the entire Schengen concept my need to be scrapped or seriously reformed, because it is allowing too many people to easily cross borders with no real security provisions.


Anyone making plans for the indefinite future that involve Schengen rules or international borders of any sort, might want to make sure they have a Plan B in case a fortress mentality starts to set in.


And in the US, any questions about setting up a Trust or Living Trust, much less involving a Corporation and various ownership shuffles, really ought to spend an hour buying a competent attorney's opinions and advice, for your particular individual situation, your family situation, and your state laws. Mistakes can be expensive.

[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.

[Lizzy Belle]

When you import a boat (or anything else over a certain value), you usually pay tax.
Same goes for the US - pretty sure I'd have to pay for importing a boat, if I had any plans to do so?

[K_V_B]

Originally Posted by Nicholson58

If there is a legal way to avoid - then certainly. Excessive tax is an effective deterrent. One can only assume the authorities are intending to discourage boat ownership. Fair, modest and level taxing, equally applied allows the growth of boat businesses and all of the spin-offs.

Given the amount of private boats in Europe I don't think the current tax regime is a deterrent.

But then there are indeed quite a few legal loopholes available.

One has not yet mentioned here:

When someone from outside the EU takes up residence inside the EU he can import his personal effects duty and VAT free. This can apply to vessels too.
There are some strings attached.
See here (section 3.15) how the UK applies this rule:

https://www.gov.uk/government/public...nd-from-the-uk

Since this is based on EU regulations I asume other countries implement it as well. But you'd have to inquire locally how it is implemented.

What I do not know is how the boat then obtains "VAT Paid" Status however...

[K_V_B]

Originally Posted by northwestsailor

There is a big difference between tax avoidance and tax evasion. The first is legal and encouraged by most taxing authorities. The latter is illegal.

Where I live even Tax Evasion is legal. It's just Tax Fraud that is a crime...