Boats bought in Eurozone and sailed to US, VAT?

[Kenomac]

David,

Spending a winter in the Med for a foreigner doesn't make any sense, the winter weather here is awful. So the customs bond arrangement works out quite well.

It would be ideal, to keep a small boat in the Caribbean for the winter, then switch over to a boat in the Med for the summer.

[valhalla360]

Originally Posted by Kenomac

VAT, here is the final answer coming from a customs bond agent responsible for many, many mega yachts. So she has to be right 100% of the time or face HUGE liability issues.

Total time in use within the VAT zone is 547 days (18 months)

Total time a boat can be in a customs bond is 24 months

Total time allowance when using a customs bond and part time use is:
18 months (use time) + 24 months (bond time) = 42 months combined before a foreign owned boat would need to exit the VAT zone in order to avoid paying VAT.

The final answer is 42 months maximum.

Ken

I certainly hope you are correct but I suspect not. Below is from Some Frequently Asked Questions about the rules for private boats - European commission:

Can the 18 months be extended if the yacht is not used? You may want to go home for Christmas!
Yes, the eighteen month period may be extended for the time during which the yacht is not used. Article 553(2) second sub-paragraph of the implementing provisions of the Customs Code allows for this. However, the maximum overall period during which the yacht can remain in the EU is 24 months (Article 140(2) of the Customs Code).

Article 140(2)

2. Without prejudice to the special periods laid down in accordance
with Article 141, the maximum period during which goods may remain
under the temporary importation procedure shall be 24 months. The
customs authorities may, however, determine shorter periods with the

agreement of the person concerned.


So I guess the question is, has anyone successfully used this to avoid paying VAT when challenged by an official?

[Kenomac]

Originally Posted by valhalla360

I certainly hope you are correct but I suspect not. Below is from Some Frequently Asked Questions about the rules for private boats - European commission:

Can the 18 months be extended if the yacht is not used? You may want to go home for Christmas!
Yes, the eighteen month period may be extended for the time during which the yacht is not used. Article 553(2) second sub-paragraph of the implementing provisions of the Customs Code allows for this. However, the maximum overall period during which the yacht can remain in the EU is 24 months (Article 140(2) of the Customs Code).

Article 140(2)

2. Without prejudice to the special periods laid down in accordance
with Article 141, the maximum period during which goods may remain
under the temporary importation procedure shall be 24 months. The
customs authorities may, however, determine shorter periods with the

agreement of the person concerned.


So I guess the question is, has anyone successfully used this to avoid paying VAT when challenged by an official?

I read your original comment and this same information last Friday... Then I called a professional bond agent to explain it and confirm my status. Then exchanged 10 emails with the specialist. Fine if you don't believe it... I really don't care. But I paid quite a lot for the information... it wasn't free crap information and speculation via the Internet.

If you don't believe it. Call an agent and pay for the advice yourself.

[monte]

Ken I think if you take a look at that link you will see it's not free crap information. I'd be looking for a new customs agent, refund and explanation before spreading secondhand and most likely incorrect information. Either way, it's best for people to make up their own minds with the facts at hand and seek professional advice if they're uncertain.

[Kenomac]

Monte,

I've read it and the attachments more than 20 times, yes it's confusing. That's why I hired my own attorney and a customs bonding agent in Italy and one in Spain. Not spreading misinformation. If you don't believe it, then hire your own help.

But I don't appreciate the accusation, especially after I went through five days of investigating the situation via professionals in the field in order to report back to the forum.... Guess I wasted my time.

[monte]

Originally Posted by Kenomac

Monte,

I've read it and the attachments more than 20 times, yes it's confusing. That's why I hired my own attorney and a customs bonding agent in Italy and one in Spain. Not spreading misinformation. If you don't believe it, then hire your own help.

But I don't appreciate the accusation, especially after I went through five days of investigating the situation via professionals in the field in order to report back to the forum.... Guess I wasted my time.

Sorry Ken I don't find this confusing at all, I'm not sure why you were confused enough to engage an attorney

----

Can the 18 months be extended if the yacht is not used? You may want to go home for Christmas!
Yes, the eighteen month period may be extended for the time during which the yacht is not used. Article 553(2) second sub-paragraph of the implementing provisions of the Customs Code allows for this. However, the maximum overall period during which the yacht can remain in the EU is 24 months (Article 140(2) of the Customs Code).

Article 140(2)

2. Without prejudice to the special periods laid down in accordance
with Article 141, the maximum period during which goods may remain
under the temporary importation procedure shall be 24 months. The
customs authorities may, however, determine shorter periods with the
agreement of the person concerned.

----

That seems clear cut and well defined.

As far as you going through five days of investigating the situation via professionals in the field in order to report back to the forum, I'm sure we all appreciate your efforts for us, but some practical information might be more useful, such as, why are the above documents incorrect and, what are the correct documents?

[valhalla360]

Originally Posted by Kenomac

I read your original comment and this same information last Friday... Then I called a professional bond agent to explain it and confirm my status. Then exchanged 10 emails with the specialist. Fine if you don't believe it... I really don't care. But I paid quite a lot for the information... it wasn't free crap information and speculation via the Internet.

If you don't believe it. Call an agent and pay for the advice yourself.

I'm not trying to get into a pissing match with you. I really want you to be right but...

This isn't "free crap information". This is a quote from the actual law and an interpretation from an official EU site. In addition, following this subject for the last few years, every time it's come up, this is the answer provided. Versus, one guy on the internet with un-named expert sources saying that's all wrong.

Did your sources explain why the offical interpretation is wrong?

I asked about experience as officals have been known to get it wrong. The problem is application of the law appears to be very haphazard, so it would be useful to hear from someone who ran into an official who wanted to charge them VAT and successfully fought it using the arguement that the two time frames run independently.

[Kenomac]

I just checked one more time to confirm my understanding. The time frames run separate but at times, one time frame can run out independent of the other. It is possible to use up the customs bonding time in 24 months necessitating the need to leave the EU. It's also possible to use up the 18 months of active time necessitating a quick trip. But when a combination of the two are used... The time frames run separate, just so long as neither one is used up.

Example: The summer vacation in the Med scenario, when the boat is clearly not in use and bonded during the off season. This is the reason the provision was allowed in the first place. When the boat is bonded and the owner is documented to be outside the EU, and the boat is sealed... this time is considered "bond time" which can accumulate to a maximum of 24 months, and there are very strict regulations and monitoring by officials. When my boat recently came out of bond, there were metal seals all over the boat including seals on the sails and dinghy. Use time (summer months) can accumulate to a maximum of 18 months.

So, if one was to burn through the use time in 18 months, yes... you would need to leave. If one was to bond the boat for 6 months, then place the boat in use for 18 months, yes... You would need to leave the EU after only 24 months.

Only by using a carefully planned combination of use time and bond time can the time frame be extended, and it does necessitate using customs officials and spending some money on bonding agents.

When things are done correctly using the proper authorities, and fees are paid, there's nothing to worry about... it's all spelled out in writing on official government documents. It's when some people sneak around trying to overstay a visit, is when they encounter problems.

The law is much more complex than the couple of sentences on the official website. You can choose to believe it or not... I really don't care, but I'm signing off this thread... Enough time has been spent attempting to convince the skeptics.