EU boat reregistered outside EU can it stay in the EU tax free?

[Prairie Chicken]

Thank you someone who has done this........was it before the Freetrade agreement earlier this year?

The current boat was bought 3 years ago, so pre-CETA.

I honestly don't think there is a sound, definitive answer to this which you could hang your hat on, short of a court decision. Different EU countries interpret the same reg differently; individual officers can really differ in their interpretations. Getting an 'official' answer is next on to impossible.

Our boats have been in Spain for 25 years. After a number of years non-VAT paid (mostly pre-computer records), we elected to pay the VAT on our old boat so by all official information, the boat was legal to stay in the EU. When we bought the new boat, she was VAT paid, and we again confirmed, as best as is possible to do, that she was not subject to VAT.

We've been boarded 3 times by the Aduanas and they never asked about VAT. Their concern was always the period of time we as Canadians had been in Spain.

Feel free to PM me if you have further questions.

[UPSPEED]

Hi,

You mentioned that "As a foreigner you can own a EU flagged vessel (a country of your choice), that remains in the EU indefinitely"

I have a 1-year old Bennie 41.1 purchased, registered and flagged in the Netherlands under the ex-vat Temporary Importation Rules as I am both a non-eu citizen and non-eu resident. I'm south-american and plan to keep the vessel within EU-waters for the next 4 years before sailing away from Europe.

Currently I have roughly 9 months to go before the first 18 months ex-vat clock expires and I've been struggling to determine if I need to change my vessel's flag to a non-eu country (Delaware for ex) before the expiration of 18 months to keep it ex-vat, or can I just keep my Ducth registration.

I'd love to keep the Ducth flag on my stern upon return from my first vat-clock reset on the Jersey Island later this summer, however I'm concerned about the legality of "re-importing" the vessel to the EU with the same NL flag I initially registered the boat with?

I've read through Articles 137 to 144 of the EU Customs Code as well as Articles 553 to 562 of the implementing provisions of the Customs Code, but it says nothing about flagging/registration vs VAT.

Any thoughts and suggestions would be highly appreciated!

Safe travels!

Upspeed.

Originally Posted by CatNewBee

I would say No, but you can ask the tax authorities in that country what happens when you leave the boat longer there.

You are a foreigner and the boat is under foreign registration. You have 18 months grace period. If you overstay, you will have to pay import taxes / re-flag the boat etc. I am not sure if the VAT paid status would help you to avoid a second time VAT charge for the import then at all, because after the foreign registration it will be probably void.

You can register the vessel under the flag of an EU country in the first place and then stay in the EU indefinitely, also the VAT status then could remain / help you. Also you can then give the boat to an European charter company if you like. With the canadian flag it would be more difficult.

As a foreigner you can own a EU flagged vessel (a country of your choice), that remains in the EU indefinitely, you cannot stay with a Canada-flagged vessel longer than 18 months..

The registration / flag means something. It is the jurisdiction / law that applies on board. The boat is then a piece of that country. As a piece of Canada you can stay not longer than 18 months, as a piece of an European country you can stay as long as you like in European waters.

If you sail with the European flag to Canada you will have a grace period too depending on Canadian regulations - you may have to import the vessel and pay all import duties as Canadian citicen + re-flag the boat.

Same applies to European citizen when buying a boat outside of Europe. As soon as we enter European waters we have to either import, tax and re-flag the vessel - or sailing under foreign flag - leave Europe after 18 months.

[Freshman]

Originally Posted by UPSPEED

Hi,

You mentioned that "As a foreigner you can own a EU flagged vessel (a country of your choice), that remains in the EU indefinitely"

I have a 1-year old Bennie 41.1 purchased, registered and flagged in the Netherlands under the ex-vat Temporary Importation Rules as I am both a non-eu citizen and non-eu resident. I'm south-american and plan to keep the vessel within EU-waters for the next 4 years before sailing away from Europe.

Currently I have roughly 9 months to go before the first 18 months ex-vat clock expires and I've been struggling to determine if I need to change my vessel's flag to a non-eu country (Delaware for ex) before the expiration of 18 months to keep it ex-vat, or can I just keep my Ducth registration.

I'd love to keep the Ducth flag on my stern upon return from my first vat-clock reset on the Jersey Island later this summer, however I'm concerned about the legality of "re-importing" the vessel to the EU with the same NL flag I initially registered the boat with?

I've read through Articles 137 to 144 of the EU Customs Code as well as Articles 553 to 562 of the implementing provisions of the Customs Code, but it says nothing about flagging/registration vs VAT.

Any thoughts and suggestions would be highly appreciated!

Safe travels!

Upspeed.

How have you bought the vessel ex- VAT? Was there made EX declaration?
If not the company has sold you ex _ VAT will have to pay this VAT anyway.

You must remember that VAT belongs to items not to person. So there are two possibilities:
1.You have bought ex-VAT vessel with EX declaration , with limited time to take the yacht out of EU. Than your seller will get IE599 document proof that goods has left and has a right to issue no VAT invoice
2.EX declaration was not prepared - your seller will have to pay VAT - his problem.

In first case after leaving EU boat will be treated as foreign items and will be under income taxes and duties (18 moths period of free stay apply).
In second boat can stay as long as you want in EU as VAT will be paid by seller (there might be problem if seller has not paid the VAT - but it is another story).
You can also register it in any flag which will accept you. Still the boat has VAT paid so can stay as long as you want in EU.

As common law is not so common and some exceptions may apply there are some countries where you can keep boat longer than 180 days in a row.

[Freshman]

Should be 18 moths not 180days

[K_V_B]

Originally Posted by UPSPEED

I'd love to keep the Ducth flag on my stern upon return from my first vat-clock reset on the Jersey Island later this summer...

Just a quick question...

Does going to Jersey actually reset the VAT clock?

Reading the VAT code of the EU I would guess it doesn't... But going to Heligoland would.

[boatman61]

Originally Posted by Freshman

Should be 18 moths not 180days

18 months in the EU.. regarding VAT.
180 days in one country before you CAN become liable for local taxes.. the application of which can vary from port to port and country to country.. some may show zero interest.. but 10 miles up the coast at another port another story.

[boatman61]

Originally Posted by K_V_B

Just a quick question...

Does going to Jersey actually reset the VAT clock?

Reading the VAT code of the EU I would guess it doesn't... But going to Heligoland would.

An American couple thought it did (Jersey) but.. on arrival in Portugal they found it did not.

[UPSPEED]

Thanks for your reply.

I bought it brand new ex-vat and yes, the EX-VAT declaration was issued with the 18-month temporary importation relief.

Originally Posted by Freshman

How have you bought the vessel ex- VAT? Was there made EX declaration?
If not the company has sold you ex _ VAT will have to pay this VAT anyway.

You must remember that VAT belongs to items not to person. So there are two possibilities:
1.You have bought ex-VAT vessel with EX declaration , with limited time to take the yacht out of EU. Than your seller will get IE599 document proof that goods has left and has a right to issue no VAT invoice
2.EX declaration was not prepared - your seller will have to pay VAT - his problem.

In first case after leaving EU boat will be treated as foreign items and will be under income taxes and duties (18 moths period of free stay apply).
In second boat can stay as long as you want in EU as VAT will be paid by seller (there might be problem if seller has not paid the VAT - but it is another story).
You can also register it in any flag which will accept you. Still the boat has VAT paid so can stay as long as you want in EU.

As common law is not so common and some exceptions may apply there are some countries where you can keep boat longer than 180 days in a row.

[UPSPEED]

As far as I have researched, the Channel Islands (Jersey, Guernsey, Alderney, Sark and Herm) are NOT part of the UK or the European Union for VAT purposes, so these would be suitable for a VAT clock reset.

Am I missing something?

Thanks!

Originally Posted by boatman61

An American couple thought it did (Jersey) but.. on arrival in Portugal they found it did not.

[boatman61]

Originally Posted by UPSPEED

As far as I have researched, the Channel Islands (Jersey, Guernsey, Alderney, Sark and Herm) are NOT part of the UK or the European Union for VAT purposes, so these would be suitable for a VAT clock reset.

Am I missing something?

Thanks!

Portuguese agreement..

But seriously, the event was discussed a lot on here with the owners.. who unfortunately tried to do a runner, got caught and compounded the situation.. not sure of the end result as I lost the drift of the thread while on a delivery.
Maybe someone on here will recall it and post a link.

[UPSPEED]

Tried sifting through the forum but so far didn't find anything yet about it...I'd would be interested in reading about the event as I wish to avoid the same or any other VAT-traps along the way.

Originally Posted by boatman61

Portuguese agreement..

But seriously, the event was discussed a lot on here with the owners.. who unfortunately tried to do a runner, got caught and compounded the situation.. not sure of the end result as I lost the drift of the thread while on a delivery.
Maybe someone on here will recall it and post a link.

[Freshman]

Originally Posted by UPSPEED

Thanks for your reply.

I bought it brand new ex-vat and yes, the EX-VAT declaration was issued with the 18-month temporary importation relief.

Not possible. EXPORT declaration gives the buyer 90 days to take bought goods out of EU custom area. Than your seller gets confirmation (IE599) that the article has left and seller is allowed to get the VAT back. Otherwise he must pay VAT which should be on item. As you have written that you have 18 temporary importation relief so most probably you have declared for export -export procedure was finished and temporary relief was opened. So the boat is now temporary in EU. Now after 18 months should be presented for export/leaving EU to close temporary relief and suspended VAT. And should moved out of EU for a while. Than you can come again with the boat to more friendly country with a bit longer stay or make temporary relief again.
You personally are allowed to stay 90 days without visa in EU. Some countries presents the position that the item may stay in EU with suspended VAT only when the owner of the item is present in that country - so be careful and every time ask local authorities for details.