Question About VAT for Non-EU Registered Yacht

[feelsgood]

I have this from an ex Vat inspector. Once you have paid VAT on a vessel and have the Vat document keep it and no other european country can charge you vat again. In other words once Vat has been paid it can not be charged again

[goboatingnow]

Once you have paid VAT on a vessel and have the Vat document

pray tell what is a VAT document. Since most people buy from dealers, they get a sales invoice, whats a "vat" document.

Secondly your inspector is wrong. If the vessel is exported from the EU, and is sold outside the EU ( or has its value substantially altered through modifications) then VAT is due again on import,

VAT is not an asset tax, VAT is a transaction tax, due on every purchase,sale,import and export except where reliefs apply.

Dave

[Kenpimentel]

Yes, I'd like to hear what exactly qualifies as proof of VAT paid. I'm looking at buying a "VAT Paid" boat (Spanish flagged) in Spain and reflagging as USA.

I will remain with the boat in France for 2-3 years and then sell it in France. I believe I'm fine with VAT as long as I can prove I paid VAT.

Is it enough that my sales invoice from current owner says "VAT Paid"? Or is there something else I need. The current owner is a Company, and they are supposedly able to not pay VAT until I buy the boat from them. So they are paying VAT from what I pay them.

[savoir]

There is no way you should trust the current owner to pay VAT for you. Chances are that the company will be shut down and the money will disappear. Word the contract so that part of the purchase price is paid directly to the broker by cheque in the name of the broker and used to pay VAT.

You will be much safer trusting the broker than a vendor company.

[Pete7]

Originally Posted by Kenpimentel

Yes, I'd like to hear what exactly qualifies as proof of VAT paid. I'm looking at buying a "VAT Paid" boat (Spanish flagged) in Spain and reflagging as USA.

I will remain with the boat in France for 2-3 years and then sell it in France. I believe I'm fine with VAT as long as I can prove I paid VAT.

Is it enough that my sales invoice from current owner says "VAT Paid"? Or is there something else I need. The current owner is a Company, and they are supposedly able to not pay VAT until I buy the boat from them. So they are paying VAT from what I pay them.

VAT is only paid on the initial purchase by the consumer unless the boat has done something odd like taken out of the EU, sold and imported back in again, or its an ex charter yacht that a business claimed the VAT back on first purchase.

So if you buy a second hand yacht in the EU that had VAT paid on first purchase, then VAT is not due again.

However, if you buy a boat that was owned by a company they will have paid and then claimed back the VAT on first purchase when new. At the point of sale to you they must pay the current VAT value based on sale price as part of their company accounts and you should receive an invoice which states, the amount, their name and their VAT registration number. This is no different to buying any new item in the EU, your invoice will show VAT as part of the price.

This is a great as there can be no doubt that the VAT has been paid by them. Keep this document safe, it is worth its weight in gold when you come to sell.

Pete

[Kenpimentel]

Thank you both for the excellent advise. I feel much safer going into this transaction now.

[Anders]

Originally Posted by savoir

There is no way you should trust the current owner to pay VAT for you. Chances are that the company will be shut down and the money will disappear. Word the contract so that part of the purchase price is paid directly to the broker by cheque in the name of the broker and used to pay VAT.

You will be much safer trusting the broker than a vendor company.

You can't do that. The company must pay VAT on everything it sells.

[Kenpimentel]

One follow up question. I'm told that to buy the boat without VAT paid, they would have to move the boat outside of EU (Gibraltar) and have the transaction occur there.

Does it really have to happen that way for me not to pay VAT (and use the 18 month temporary import permit)? Again, I'm buying a Spanish flagged boat from a Spanish charter company and I'm a US citizen and will reflag as USA.

[savoir]

Originally Posted by Anders

You can't do that. The company must pay VAT on everything it sells.

Only in theory.

[Kenpimentel]

So, I am buying the boat with VAT paid. It's Spanish flagged, but I'll reflag for USA. As I understand things, as long as I can prove that the boat hasn't left EU (which could cause an "import" consideration and VAT being reapplied), and I have the proof that VAT was paid, then I should be fine. That's the theory...

[SnakeEyes]

If you are a US citizen and not a EU resident. I would buy the boat VAT free, (much less money to pay). Register it in the US and sail the EU under the 18 month exempt rule. If you would to sell the boat in the EU in the future VAT would be due for the new owner if he or she is a EU resident.

[Kenpimentel]

I thought about that, but I hope that the "VAT Paid" status is taken into consideration when I go to sell the boat in the Med. This frees me up from worrying about the 18 month limit and getting out of the EU at an inconvenient time.