Tax Residency and VAT

[tanre]

Originally Posted by goboatingnow

Correct

But I will not be residing in the EU past 183 days which is the requirement for being a tax resident of Spain and thus the EU.

[goboatingnow]

Originally Posted by tanre

But I will not be residing in the EU past 183 days which is the requirement for being a tax resident of Spain and thus the EU.

It’s one of the things , it’s not the only thing. In terms of a boat the phrase is “ not established in the customs union “ establishment is a complex determination and is not the same as tax residency.

[Montanan]

Originally Posted by tanre

Im not sure how this will matter, but I am not educated. I have a USA passport, she a Spanish one. Different last names. All registered info on the boat is registered to me.

How can anyone ask for VAT because she is a passenger on my boat? [B]How can anyone ask. . . The How: By implementing EU Law. Because she is a resident of the EU, consuming a taxable good in the EU.[/B] I will not be a tax resident of Spain and AM a tax resident of the USA. It is not about you.


It seems logically ridiculous that they ask for VAT from a non EU resident who is sole owner of a vessel regardless of who is on board.

Actually not at all ridiculous as to taxation of EU residents by the EU. Key factor is residency and the responsibilities that accompany the privilege, such as needing to pay normal privilege taxations like customs duties and VAT.


We will not be presenting our marriage certificate and dont see how that is relevant.

Note: It will become more complex if and when you become divorced, as you will lose your right to residency if you are not married to a resident of the EU.

If you wish to use a private yacht within European Union (EU) waters you must be aware of the various Value Added Tax (VAT) implications. In principle, all yachts owned or used by EU residents must have their VAT paid before they may enter EU waters. An exemption is possible only for yachts that are owned by non-EU residents and used temporarily in EU waters by a non EU resident (for example a company incorporated outside the EU or an individual who normally lives outside the EU).

Important points to be considered for determining whether or not VAT is payable are the place of purchase of the yacht, where the yacht will be used, who is the beneficial owner of the yacht, whether the yacht will be chartered out to third parties, and whether the yacht will be used by EU residents.

The VAT is only a onetime fee and a modest increase in the cost of acquiring the vessel, not a big factor in the scheme of the pleasure of ownership and use in the EU.

[letsgetsailing3]

In any country, the most powerful law enforcement tends to be the tax people, followed very closely by the immigration people.

They both tend to keep accurate records, and they're known to share with each other. They're often slow to come around, but if you catch their attention, they can make your life difficult.

[Montanan]

Note the underlying issue revolves about the allowed SPECIFIC USE of the vessel associated with the grant of temporary admission by a non-resident of the EU. Such specific use precludes the use by a resident of the EU [with the exception of Article 215, section 1 denoted below].
The EU law:

CHAPTER 4
Specific use

S e c t i o n 1
T e m p o r a r y a d m i s s i o n

Article 250
Scope
1. Under the temporary admission procedure non-Union goods
intended for re-export may be subject to specific use in the customs
territory of the Union, with total or partial relief from import duty, and
without being subject to any of the following:
(a) other charges as provided for under other relevant provisions in
force;
(b) commercial policy measures, insofar as they do not prohibit the
entry or exit of goods into or from the customs territory of the
Union.

2. The temporary admission procedure may only be used provided
that the following conditions are met:
(a) the goods are not intended to undergo any change, except normal
depreciation due to the use made of them;
(b) it is possible to ensure that the goods placed under the procedure
can be identified, except where, in view of the nature of the goods
or of the intended use, the absence of identification measures is not
liable to give rise to any abuse of the procedure or, in the case
referred to in Article 223, where compliance with the conditions
laid down in respect of equivalent goods can be verified;
(c) the holder of the procedure is established outside the customs
territory of the Union, except where otherwise provided;
(d) the requirements for total or partial duty relief laid down in the
customs legislation are met.


Article 253
Delegation of power

The Commission shall be empowered to adopt delegated acts, in
accordance with Article 284, in order to determine:

(a) the specific use referred to in Article 250(1);
(b) the requirements referred to in point (d) of Article 250(2).


S e c t i o n 2
E n d - u s e
Article 254

End-use procedure
1. Under the end-use procedure, goods may be released for free
circulation under a duty exemption or at a reduced rate of duty on
account of their specific use.

2. Where the goods are at a production stage which would allow
economically the prescribed end-use only, the customs authorities may
establish in the authorisation the conditions under which the goods shall
be deemed to have been used for the purposes laid down for applying
the duty exemption or reduced rate of duty.

3. Where goods are suitable for repeated use and the customs authorities consider it appropriate in order to avoid abuse, customs supervision shall continue for a period not exceeding two years after the date
of their first use for the purposes laid down for applying the duty
exemption or reduced rate of duty.

4. Customs supervision under the end-use procedure shall end in any
of the following cases:
(a) where the goods have been used for the purposes laid down for the
application of the duty exemption or reduced rate of duty;
(b) where the goods have been taken out of the customs territory of the
Union, destroyed or abandoned to the State;
(c) where the goods have been used for purposes other than those laid
down for the application of the duty exemption or reduced duty rate
and the applicable import duty has been paid.

5. Where a rate of yield is required, Article 255 shall apply to the
end-use procedure



Article 212
Conditions for granting total relief from import duty for means of
transport
(Article 250(2)(d) of the Code)

1. For the purposes of this Article the term 'means of transport' shall
include normal spare parts, accessories and equipment accompanying
the means of transport.

2. Where means of transport are declared for temporary admission
orally in accordance with Article 136 or by another act in accordance
with Article 139, the authorisation shall be granted to the person who
has the physical control of the goods at the moment of the release of
goods for the temporary admission procedure unless that person acts on
behalf of another person. If so, the authorisation shall be granted to the
latter person.

3. Total relief from import duty shall be granted for means of road,
rail, air, sea and inland waterway transport where they fulfil the
following conditions:
(a) they are registered outside the customs territory of the Union in the
name of a person established outside that territory or ,where the
means of transport are not registered, they are owned by a person
established outside the customs territory of the Union;
(b) they are used by a person established outside the customs territory
of the Union, without prejudice to Articles 214, 215 and 216.
Where those means of transport are used privately by a third person
established outside the customs territory of the Union, total relief from
import duty shall be granted provided that that person is duly authorised
in writing by the holder of the authorisation.


Article 215
Use of means of transport by natural persons who have their
habitual residence in the customs territory of the Union
(Article 250(2)(d) of the Code)

1. Natural persons who have their habitual residence in the customs
territory of the Union shall benefit from total relief from import duty in
respect of means of transport which they use privately and occasionally,
at the request of the registration holder, provided that the registration
holder is in the customs territory of the Union at the time of use.

2. Natural persons who have their habitual residence in the customs
territory of the Union shall benefit from total relief from import duty in
respect of means of transport which they have hired under a written
contract and use privately for one of the following purposes:
(a) to return to their place of residence in the customs territory of the
Union;
(b) to leave the customs territory of the Union.

3. Natural persons who have their habitual residence in the customs
territory of the Union shall benefit from total relief from import duties
in respect of means of transport which they use commercially or
privately provided that they are employed by the owner, hirer or
lessee of the means of transport and that the employer is established
outside that customs territory.

Private use of the means of transport is allowed for journeys between
the place of work and the place of residence of the employee or with the
purpose of performing a professional task of the employee as stipulated
in the contract of employment.

At the request of the customs authorities, the person using the means of
transport shall present a copy of the contract of employment.
4. For the purposes of this article,
(a) private use means the use other than commercial of a means of
transport;
(b) commercial use means the use of means of transport for the
transport of persons for remuneration or the industrial or
commercial transport of goods, whether or not for remuneration.
Article 216
Relief from import duty in respect of means of transport in other
cases
(Article 250(2)(d) of the Code)

1. Total relief from import duty shall be granted where means of
transport are to be registered under a temporary series in the customs
territory of the Union, with a view to re-export in the name of one of
the following persons:
(a) a person established outside that territory;
(b) a natural person who has his or her habitual residence inside that
territory where that person is preparing to transfer normal residence
to a place outside that territory.

2. Total relief from import duties may in exceptional cases be
granted where means of transport are commercially used for a limited
period by persons established in the customs territory of the Union.


Article 217
Time-limits for discharge of the temporary admission procedure in
the case of means of transport and containers
(Article 215(4) of the Code)

The discharge of the temporary admission procedure in the case of
means of transport and containers shall take place within the
following time-limits from the time the goods are placed under the
procedure:

. . .

(e) for privately used means of sea and inland waterway transport: 18
months;

To quote Paul Harvey: So now you know the rest of the story.

You be educated.

[Wander4Wonder]

Originally Posted by boatman61

I don't see what the problem is with the 183 days..
I have been a resident of Portugal for nearly 15yrs now, the first five years it was Temporary Residency then it became 10yrs Permanent Residency renewed next March. I was out of the country for 10mths on two deliveries, 7 months Florida to Perth via S Pacific then stayed 3 months more in Oz helping prepping then delivering a boat from Perth to Tassie for a CF member..
Raised no questions or problems when arriving back in Portugal.
All travel is on my UK passport, no problems.. mind we were still EU members back then..
Not that I can see any difficulties as I just did Spain and back on my UK passport, only problems were Covid related.

How do you like and rate Portugal as a retirement/sailing hub? I assume well as you have been there for a while. Any major learning curve or hiccups along the way?

I've begun trying to learn Portuguese in anticipation of (hopefully) retiring there (or at least some travel)

[boatman61]

I like it well enough, better than Spain in my opinion, in fact better than any Med country I've been to.
There are several anchorages along the Algarve coast which is great for dodging the high season marina charges when I was based down in Portimao.
These days I keep my boat (when I have one) in Figuera da Foz on the W coast, decent marina in town, nice folk and very inexpensive compared to the Algarve. Also, Portuguese is easier than Spanish I found, and I lived aboard cruising Spain for 4yrs in the 90's.