Question re: boats advertised as "VAT paid"

[jimp1234]

I presume that boats advertised as "VAT paid" means that the current owner has paid the VAT and that it can be transferred to the new owner. Is that correct? If yes, would this only apply to other EU residents? Would it apply to me as a U.S. (non-EU) citizen? TIA


-Jim

[sailormed]

VAT is only applicable between the countries that have a mutual tax agreement. In the EU that is all member countries (minus 1 in a not to far future).
So you can take a boat from Germany to France and France will not re-apply VAT tax.
As far as I know there is no VAT tax agreement between the US and the EU.
So you are buying a boat with VAT paid (roughly 20%), but there is no benefit to you if you take it out of the EU and import it elsewhare.

[Orion Jim]

There are subtleties to what is acceptable proof of paid VAT so be extremely careful when you are about to make a purchase. Some EU members are very picky. If you try to clear customs and they won't accept your proof you'd better have a back-up plan or deep pockets. Before any funds change hands the best legal representation you can afford will be worth every penny.

[kas_1611]

Jim,

VAT status relates to the boat and not the owner. So it doesn't matter if you are a US citzen or an EU one. If you take said boat out of EU waters for more than 3 years it would lose the status and be subject to reVATing on return.
VAT is a highly complex (and sometimes contentious) matter that even the taxman doesn't fully understand.
Keiron

[Redpcx]

The VAT was most likely paid. If the original owner was not required to pay VAT, for any of numerous reasons, it could be required to be paid by an owner not qualified for the exception. Example, 10 year old boat, original price $100k, VAT $18K. Current Price $40k. Even if you have to pay based on 3 year rule, VAT would be $7200. If it was never paid, VAT would be $18000.

And Export to US probably does not pay VAT.

[kas_1611]

VAT would be charged at the relevant national rate on the current value of the vessel as determined by the nations Customs personnel.

If non VAT paid and you are not an EU citizen or resident you maybe able to export the vessel from EU waters under the "sail away" scheme then come back in under the Temporary Import rules but this would only allow the vessel to remain for up to 18 months before considered permanently imported and VAT due

[jimp1234]

Thanks for the responses. I'm still a bit confused how this would work for me as a non-EU resident, so I'll layout a hypothetical scenario. So I buy a boat with VAT paid. I keep it in the Med. I'm either sailing the boat, or if I'm home in the U.S. the boat is berthed or on the hard in an EU country like Italy or France. Because it's VAT paid I'm not limited to the 18 month time limit. And I could keep it in the Med indefinitely without having to pay another VAT tax as long as I keep it in the Med. This is how I'd like it to work, but it probably doesn't. Comments? TIA

Jim

[kas_1611]

Jim
Fundamentally that is correct. Regardless of the flag on the vessel if it is EU VAT paid then it is free to move and remain in the EU.
As a non Schengen passport holder though you are limited to the rolling 90 days in 180 limit unless you can find someway to obtain a long term resident visa in a Schengen state

[jimp1234]

Thanks Kas, your answers have been most helpful. So another hypothetical scenario. I buy a VAT paid boat in Europe. I sail it (or ship it if it's not seaworthy) to Florida, refit the boat and sail it in the Caribbean for two years six months, then sail back to the Med. Would the VAT paid status still be good? Sounds like it, based on your comments. And you raise another question. Can I have a U.S. flagged boat that's VAT paid? TIA

-Jim

[kas_1611]

Jim,
Theoretically you are correct in your hypothesis. You could even sail to Guadeloupe or Martinique to re-enter the EU as these 2 islands are part of France (Departement Outre Mer), it is actually a domestic flight from Paris.
As far as I can tell Flag and VAT status are not linked so should be no issues with the Stars and Stripes flying or the Red Ensign. Recommend confirming with legal professional if you can to be certain.

[did-g]

Originally Posted by kas_1611

Jim,
Theoretically you are correct in your hypothesis. You could even sail to Guadeloupe or Martinique to re-enter the EU as these 2 islands are part of France (Departement Outre Mer), it is actually a domestic flight from Paris.
As far as I can tell Flag and VAT status are not linked so should be no issues with the Stars and Stripes flying or the Red Ensign. Recommend confirming with legal professional if you can to be certain.

- Surprise, from a fiscal,custom and VAT POV Guadeloupe and Martinique are not in the EU. Moving a boat from there to the EU is an importation...

- If you buy a EU VAT paid boat outside the EU it may lose its VAT status, day one.

- When re entering the EU you may have to pay VAT on the refit

there's some stuff (3.4, 3.5) at:

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

[kas_1611]

As I said it's complex and the French DOM TOMS add to that as they are part of Metropolitan France and their citizens are full French citizens with full rights. The capital of Martinique is Paris and they send their political representatives to the parliament in Paris. So in that respect they are part of the EU. They could however be outside the custom union, like the Canaries are from Spain, but as it is classed as domestic in France there wouldn't be any customs anyway.

[kas_1611]

Courtesy of Wikipedia

Martinique*(French pronunciation:*​[maʁ.tinik]) is an*insular*region of France*located in theLesser Antilles*in the eastern*Caribbean Sea, with a land area of 1,128 square kilometres (436*sq*mi) and a population of 385,551 inhabitants as of January 2013.[1]*LikeGuadeloupe, it is an*overseas region*ofFrance, consisting of a single*overseas department. One of the*Windward Islands, it is directly north of*Saint Lucia, northwest ofBarbados, and south of*Dominica.

As with the other overseas departments, Martinique is one of the eighteen*regions of France*(being an overseas region) and an integral part of the French Republic. As part of France, Martinique is part of the*European Union, and its currency is the*euro. The*official language*is*French, and virtually the entire population also speak*Antillean Creole*(Créole Martiniquais).[

So that confirms the DOM/TOMS are part of the EU

[Clipper747]

Firstly, if a VAT paid boat is bought by a non EU citizen, the VAT status is lost. Martinique in not apart of the the EU VAT zone, get legal advice if you are an EU citizen purchasing a boat in Martinique as we have been told you will lose your VAT paid status if the boat is not brought back to the EU VAT zone and purchased in Europe.

[Pete7]

Hopefully Jim has resolved the query and bought a boat after 3 years.

Pete