VAT, EU Visas, and 90 days in 180 for us poor brits!

[james_p]

My situation is as follows: I’m a UK citizen and resident (habitually and tax) in the UK. I’m in the process of buying a yacht (an Elba 45 catamaran) that I’ll export from the UK to avoid VAT here as I don't like sailing in the cold!

I’m planning to bring the boat down to the Mediterranean, under Temporary Admission to avoid EU-VAT (yes, 18 months), with the first port from the UK most likely A Coruna in June 2022. I then have a mooring in Palma until May 2023.

Because this year I’ll want to spend more than 90 days (in 180) in the Schengen area, I’m planning to get a Spanish Non-Lucrative Visa which will allow me 12 months in Spain. Realistically I’ll only use up to 181 days which will suit just fine, and I really do not want to become a tax resident in Spain!

The NLV will make me a 'resident' (habitual, TIE card), and my initial first concern is that this will mean the Temporary Admission won’t be allowed and EU-VAT, and possibly Matriculation Tax would become due. Then i hear this is only true for an EU TAX Resident, which i won't be. I’d like to get this properly confirmed but it's not easy.

I can't be alone in either wanting to do this, having done this and got the t-shirt (or lost his shirt if it went badly).....

[Montanan]

I perceive your concern is appropriate.

Seemingly, one is either a resident of the EU or not a resident of the EU and specifically of the member country of the Union and thence being accorded the benefits and the responsibilities associated therewith.

I suspect that one can't both eat and have the cake.

Albeit, I have seen many a non-sensical exemptions and definitions when it comes to immigration and taxations.

Simple matter to ask counsel of a Spanish tax and customs duty expert because what you are contemplating gets complicated as to both the UK and the EU, now that Brexit has occurred.

Might be better [less expensive] to purchase an EU VAT paid vessel and not a UK VAT paid vessel if it is your intent to not use UK cold waters.

As to matriculation, reference link: https://www.nauticalegal.com/en/repo...gistered-boats

[james_p]

No, the problem is you can be a resident of an EU country and/or a Tax resident of an EU country. The two are distinct.

It's not a case of having my cake and eating it - if that were the case i'd wish for a decent visa for us sailors as we travel around the med, but brexit has put us in a position that we can avoid VAT in the UK and the EU - maybe the only good thing to come out of brexit!

[Montanan]

When do you become a resident in the country?

Reference: https://www.immigrationspain.es/en/r...-non-resident/

You will become a resident in the country after spending 183 days per year in Spain.

If you live in the country or stay for anything less than those 6 months, you are considered a non-resident.

This distinction is crucial for many reason, but perhaps the most important is taxes.

If you are regarded as a resident, you must pay resident taxes. This means paying income tax for the worldwide income generated in Spain.

Also, in order to renew certain residencies like the non-lucrative visa, you must stay in the country for 183 days minimum, hence you must become a resident.

So again you are a resident or a non-resident.

[blubaju]

Proceeding to Turkey? In general, I am no specialist, for the time you are not there have the boat customs locked.

Think this is what you are looking for, but the EU will not give you now, maybe some years after Johnson & friends retire or imideatly after reversing Brexit ;-)

There is one expensive loophole: have a reputable boatyard make a time-consuming repair/refit, but then VAT might be cheaper

[sailormed]

The 90 days in 180 is a Schengen regulation. Many countries in Europe are part of the Schengen treaty. But, but, but every country that is part of the Schengen area is still an independant country that issues visas to foreign nationals that visit that country.
If you want to stay for more then 90 days in a country that is part of Schengen you can apply at the consulat of that country for a stay for longer then 90 days. That stay will then be grated (or not) by that country.
I have the impression that there is a lot of confusion over these rules.

[Montanan]

Useful Reference: https://www.ionianyachtsales.com/use...f%20from%20VAT.

[Stewie12]

Hire a Spanish Gestor to advise you one this. A Gestor is an accountant.

[james_p]

Originally Posted by sailormed

The 90 days in 180 is a Schengen regulation. Many countries in Europe are part of the Schengen treaty. But, but, but every country that is part of the Schengen area is still an independant country that issues visas to foreign nationals that visit that country.
If you want to stay for more then 90 days in a country that is part of Schengen you can apply at the consulat of that country for a stay for longer then 90 days. That stay will then be grated (or not) by that country.
I have the impression that there is a lot of confusion over these rules.

That's not the point, getting the NLV is not difficult. The issue is over how the rules about 'residency' in the EU with a TIE are interpreted.

[james_p]

Originally Posted by Montanan

Useful Reference: https://www.ionianyachtsales.com/use...f%20from%20VAT.

Thanks Montana - it does however illustrate my point well. It mentions

"Temporary importation relief from VAT is available to yachts beneficially owned and used by non EU residents provided such non EU resident does not become ordinarily resident in the EU."

So in the scenario i mention, do i become a resident or not. I'll definitely not be a tax resident, so is there any other form that they recognise? Is the TIE a right to reside, or does it make you a resident... so confusing. I think maybe Stewie12 has a point - i asked an abogados but maybe a gestor is better :-)

[goboatingnow]

The definition of “ ordinary resident “ can be widely interpreted at a national level.

The problem is that that interpretation can be adjudicated “ on the spot “ by a spainish customs agent

For example if you are relying on your NLV to justify your presence in the country , you can be abc usually are regarded by customs as being an “ ordinary resident “, this can be further complicated by permanent marina contracts etc.

Hence you can be immediately accessed for VAT and the issue is you have to fight your innocence not the other way around

I would not recommend your approach , you’ll spend all your time looking over your shoulder and a British registered yacht will attract customs attention now.

I’ve seen it happen recently on land in Greece. A friend had a U.K. car , and when stopped proffered his Greek residency Visa card. ( as he couldn’t claim tho be a tourist ? His car was seized on the spot. Cost him € 1000 and had to remove it from Greece within 24 hours.

Note my daughter works for the EU commission they are well aware there are some anomalies in the vat law around boats post Brexit. European dealers have complained that U.K. agents of European boats have an advantage , I’d wouldn’t hold out this “ loop hole” will remain

The fact is you need to pay vat somewhere

[Little John]

james_p,
be careful and ask a spanish official. To my best knowledge, if you apply for the NIV, you will be interviewed in person. You have to show certain funds and for renewal have to show even more funds, because the validy time will be longer. And in the conditions for the visum is stated that you want to stay longer then 183 days. That makes you a spanish tax payer. You although must apply for a spanish health insurance. Check before you make an expensive mistake.

[goboatingnow]

Note the term ordinary resident does not actually get used in the relevant EU legislation on temporary admission procedures

The relevant paragraph is
“(c) the holder of the procedure is established outside the customs territory of the Union, except where otherwise provided;”

So the issue is establishment. For the vast majority of customs agents this will boil down to “ are you viewed as a resident “

Firstly the NLV is specifically a “ residential visa “ secondly you will have to show funds in a Spanish bank account and you require a Spanish based health insurance

The point is for all intents and purposes you are a Spanish resident. The tax residency is not the issue.

The thing is the customs will use the “ duck test “ if it walks like a duck …. Etc

Any sniff this is a vat dodge and they’ll issue a demand. These people are not fools they’ve seen every trick in the boat. ( deliberate )

If you are actually intending to stay in Spain , you are in effect a resident , irrespective of where you pay tax. Temporary import is not designed for you

Sorry , sure you can dodge the vat , you might not be detected , but you might !

Are you feeling lucky punk

I know in Greece U.K. people are not contemplating this either. They pay the vat when they buy the boat locally.

[goboatingnow]

Originally Posted by Little John

james_p,

be careful and ask a spanish official. To my best knowledge, if you apply for the NIV, you will be interviewed in person. You have to show certain funds and for renewal have to show even more funds, because the validy time will be longer. And in the conditions for the visum is stated that you want to stay longer then 183 days. That makes you a spanish tax payer. You although must apply for a spanish health insurance. Check before you make an expensive mistake.

You will not get a definitive answer from an official. You are in essence asking “ can I play the vat /residency rules “

The issue in most countries is authority to issue tax assessments ( Vat ) is delegated to local customs and revenue enforcement personnel.

They decide , essentially on the spot , to adjudicate ,they have sweeping powers to levy fines , arrest you , property seizure etc. All of which you have to fight in court to prove them incorrect not the other way round.

Just ask yourself this

Am I spending large amounts of time in Spain ,what documentation allows me to do that and what supporting documentation supports me “ living “ in Spain , marina bills ,supermarket receipts , my residency visa

If realistically even if not precisely legally this smells like residency , then that will be exactly what customs will decide also

Pay the vat and sleep soundly

[goboatingnow]

Just to reiterate , these issues are adjudicated by local custom agents . They are not done by lawyers pouring over legal texts

The agent could simply walk around to your marina manager

“ hey does so and so stay here for months and months “

“ sure , Fred , yes he spends 9 months sailing around here goes back to the U.K. for Christmas etc “

One big demand for vat ( and by the way fines) follows.

It’s that simple. You can of course fight spainish Revenue in the courts , you might even win after a few years too.