VAT, Flag and residency issues

[HarmenR]

I'm trying to work out where I stand in this Brexit world.

I'm a dual national UK/NL, reside in the UK and I'm looking to purchase a US owned vessel built in 1986 and which entered the EU in 2019. She has been laid up in the EU ever since and her US flag has since expired. She's stateless.

I need to work out under which flag to register her, so I can sail her without any trouble in the Med, which is mostly EU territory.

The question is, with a UK flag, do I need to pay UK VAT? I don't intend to bring her back to the UK. She'll be moored in Greece/Turkey. I guess I then have to adhere to the 18 month roaming rule. But I won't have to go through certification of the engine and the vessel (CE).

If I opt for a Dutch registration, can I then avoid paying the VAT and not have to do the CE, as she was built in 1986?

Or is a Polish registration easier?

Is there anybody out there who went through this?

[boatman61]

Register her SSR.. you'll not be liable for VAT unless/until you take her back to the UK.
In the Med you'll be fine as long as you follow the 18mth rule.. providing you don't get hit by the Greeks for taxes, they do like to grab money wherever and whenever they can.
You say she's been on the hard for a couple of years in the EU.. make sure she's not liable for EU VAT already.

[goboatingnow]

The Portuguese will generally grap all your money but the greeks are generally reasonable imho

She's stateless

despite appearances , leisure boats dont have a state !!, they are goods just like your fridge !!

entered the EU in 2019. She has been laid up in the EU

any temporary import provision will have expired and she is in theory liable for EU VAT

The question is, with a UK flag, do I need to pay UK VAT?

Absolutely not unless you bring her to the UK

I guess I then have to adhere to the 18 month roaming rule. But I won't have to go through certification of the engine and the vessel (CE).

legally and technically the current owner is responsible for paying the vat as the TIP has expired ( unless bonding arrangements were agreed )

If I was you I would get the current owner to negotiate with the greek authorities and agree a financial valuation with can be well well under any subsequent sales prices and pay the EU VAT. then you buy it with the VAT paperwork present

DO not register a non EU VAT boat in an EU country , you will run into issues , PArt 1 UK would be better then SSR imho ( less questions )

also be clear that if you do buy the boat in its current VAT unpaid status , you potentially have an issue with the " unexplained " period. Its likely that you will never get questioned to that level of detail , but !!! . Yes you will have to both abide by the 18 months TIP rules

Note you need to be careful , if you are avoiding the 90 days Schengen limits by using you NL passport , you run the risk of being regarded as a EU tax resident , TIP is not then available to you and you become liable for EU VAT based on teh last valuation ( your purchase)

This is why I would resolve the VAT payment before the sale and factor in the VAT into the sale price. It will mean you don't have to worry about the 18 month rule and you'll find it easier to sell in the EU subsequently

If I opt for a Dutch registration, can I then avoid paying the VAT and not have to do the CE, as she was built in 1986?

No and No , as she only entered in 2019. DUtch full registration is expensive and the Lite register is increasingly not acceptable in several countries

[greenlantern]

Poland does not require a CE certificate to register a boat built in 1986.
More information here:

https://www.polishyachtflag.com/blog...ster-in-poland

[letsgetsailing3]

She has been laid up in the EU ever since and her US flag has since expired. She's stateless.

Seems to me she's not "stateless". She's a U.S. flagged vessel that's overstayed her EU permit.

If you intend to sail her in the EU, why not register her in the EU, pay the VAT, and be done with it, since you can do this as a NL citizen? Otherwise, you're going to be trying to hide from the greek authorities, who are always trying to tax someone.

[Montanan]

Originally Posted by boatman61

Register her SSR.. you'll not be liable for VAT unless/until you take her back to the UK.

You say she's been on the hard for a couple of years in the EU.. make sure she's not liable for EU VAT already.

Originally Posted by letsgetsailing3

She has been laid up in the EU ever since and her US flag has since expired. She's stateless.

Seems to me she's not "stateless". She's a U.S. flagged vessel that's overstayed her EU permit.

If you intend to sail her in the EU, why not register her in the EU, pay the VAT, and be done with it, since you can do this as a NL citizen? Otherwise, you're going to be trying to hide from the greek authorities, who are always trying to tax someone.

If the boats USCG documentation has expired then the vessel has become defacto stateless and thus is solely under the regulatory control of the country in which it is located [e.g., on the hard]; it will have lost its USA nationality.

The vessel should be formally delisted from the USCG documentation. Certificates of Documentation are not eligible for renewal if expired for more than 30 days. Expiration information located on COD (CG-1270), lower left corner. You will need a deletion from documentation and a bill of sale to aid in registering the vessel with a new flag country.
Reference link for deletion of documentation:
https://www.dco.uscg.mil/Portals/9/D...-28-130935-320

Bill of Sale form: https://www.dco.uscg.mil/Portals/9/D...alwn_IAA%3d%3d

I would recommend that you obtain an Abstract of Title from the USCG which will inform of any liens. Reference link: https://www.dco.uscg.mil/Portals/9/D...d1E8DcIQ%3d%3d

The temporary importation into the EU has expired as it was not discharged within the 18 month period which means that VAT is due in the country of the EU into which it first entered and the present owner is liable for the VAT and the importation customs tariff duties [if any] for having imported the vessel from the USA. The valuation will be as of the date of first entry into the EU, including cost, insurance and freight of the vessel and the appurtenances associated therewith. Hence the EU customs duty and VAT are due, and likely penalties and perhaps interest for the delay in payment. The present owner needs to settle their importation clearance and pay what needs to be paid, then and only then will the vessel be allowed to be free to transport and be sold in the EU. That means that the vessel will be of EU customs duty and VAT paid status at the time you acquire the vessel and you will not need to concern yourself with having to maintain a temporary importation into the EU and discharge the TIP every 18 months.

Based on efficient market theory, the EU located vessel should be increased in its market value by the amount of VAT / customs duty paid once the owner clears and pays the customs affairs.

As you are a resident of the UK, if you import the vessel into the UK you will need to pay customs / VAT and also have the vessel inspected and certified as UKCA [the UK new CE type equivalent]. Brexit has its consequences.

The onus is on the present owner to first properly clear customs and that should be in the country the vessel entered the EU and started its temporary importation status. Look back into the vessel's voyage log to determine when and where it first entered the EU, or the territories of the EU, e.g., the Azores.

Of keen issue is that the vessel and its appurtenances must also qualify for CE regulations in order to be allowed to be imported so a CE inspection / certification will be required and again that is the onus of the present owner as it can NOT be sold to you until it clears customs, including CE. These are issues that the present owner must resolve and should have resolved in months past. They are NOT your issues, do not get involved in their resolution just be sure that they are fully and completely resolved and properly documented. It would behove the present owner to engage an import broker with yacht entry experience. You will need to receive and retain forever, the ORIGINAL receipt document of the vessel's clearance of EU customs and the duty / VAT payment.

If the vessel has a dinghy and an outboard motor that vessel needs to have its title transferred as well, which may have been titled and registered with a State separate and apart from the USCG documentation of the main vessel. Be sure to have a Bill of Sale and title release of such [if the dinghy was titled, not all States of the USA are title issuing States, some are just registering States, others are titling and registration States, each has its own procedures and rules, 50 States / 50 set of jurisdictional laws, the dinghy being independent of the main vessel. It also may require CE inspection / certification.

Good luck with your soon new to be you vessel.

[BM2023]

Originally Posted by HarmenR

....... US flag has since expired. She's stateless.

As letsgetsailing3 rightfully stated, she is registered in the US, whether the registration is expired or not. You will have to apply for a Certificate of Withdrawal, if you want to be able to register her elsewhere in the EU.

Tip : Buy the boat with Certificate of Withdrawal, so you do not have to arrange that yourself. Let the seller arrange that as part of the deal.

Originally Posted by HarmenR

If I opt for a Dutch registration, can I then avoid paying the VAT and not have to do the CE, as she was built in 1986?

Appart from a few EU registers, you can register her without having to prove you paid VAT. This because customs is not involved in the registration process. The chances that customs will ask you to prove VAT was paid, is great, whether it be Greece, France, or elsewhere.

Note that if you are stopped by customs, in any EU state, and you can not prove VAT is paid, you will not only have to pay the VAT but also a hefty fine. Chances that the vessel will get chained is also there.

CE Declarations are not asked for by all ships registrars, regardless of the age of the vessel. On top of that because of the age of the vessel you will not be able to supply it anyway.

Please also keep in mind that if you simply pay the VAT and keep the records, it will be easier to sell the boat in the future, because the new owner does not have to worry about organising VAT payment.

Simply paying the VAT will save you a whole lot of worries each time you enter the territoriaal waters of an EU state and makes the vessel more commercially attractive when you decide to sell her.

[Anders]

The boat is not CE exempt unless it was built or in use in the EEA before June 16 1998.

[Montanan]

As to the flagging.

Given your dual citizenship UK, and NL either of those two countries are viable, or you could opt for a flag of convenience and register in an open registry.

Note: The "Dutch light registry" does NOT provide the vessel with nationality nor the ability to wear the Dutch flag. Do not fall under that inaccurate premise.

What nationality would you prefer to have the vessel wear?

Your choice.

[Montanan]

Originally Posted by Anders

The boat is not CE exempt unless it was built or in use in the EEA before June 16 1998.

Importing a non-CE boat into Europe: what is CE certification for boats?
Another essential condition for the nationalization of non-EU recreational crafts and for sailing in European waters is that the vessels carry the CE marking.
Otherwise, it will be necessary to prove that they had been marketed or built in the community area before 1998, that is when vessels were built and enabled for navigation on the basis of the technical criteria established by Law 50/71.
Directive 2013/53/EU provides that newly built boats, up to 24 meters in length and which are used for recreational and sporting purposes, shall carry the CE marking for the purposes of free trade within the European Economic Area.
The CE marking process for recreational boats guarantees owners and shipyards that their yachts meet the highest safety standards, and as a result it contributes to strengthen their commercial and qualitative value throughout their life span.

NOTE** as of 17th January 2017 only the new recreational craft directive 2013/53/EU can be used. This will have a significant effect on older boats meaning certification is no longer possible without engine change, however, in some cases there are exceptions.

Reference link to 2013/53/EU:

https://www.legislation.gov.uk/eudr/2013/53/contents

Reference link to Article 6 specifically as to certification of the engine of the vessel meeting Stage III or Stage IV emission standards which if the boat is of 1986 vintage may need to be repowered to achieve such tighter emissions.
https://www.legislation.gov.uk/eudr/2013/53/article/6

Article 6
Free movement
1.
Member States shall not impede the making available on the market or, without prejudice to Article 5, the putting into service in their territory of watercraft complying with this Directive.
2.
Member States shall not impede the making available on the market of partly-completed watercraft where the manufacturer or the importer declares, in accordance with Annex III, that they are intended to be completed by others.
3.
Member States shall not impede the making available on the market or putting into service of components complying with this Directive which are intended to be incorporated into watercraft, in accordance with the declaration of the manufacturer or the importer, as referred to in Article 15.
4.
Member States shall not impede the making available on the market or putting into service of any of the following propulsion engines:
(a)
engines, whether or not installed in watercraft, complying with this Directive;
(b)
engines installed in watercraft and type-approved in accordance with Directive 97/68/EC which are in compliance with stage III A, stage III B or stage IV emission limits for CI engines used in other applications than propulsion of inland waterway vessels, locomotives and railcars, as provided for in point 4.1.2. of Annex I to that Directive, complying with this Directive, with the exclusion of the exhaust emission requirements set out in Part B of Annex I;
(c)
engines installed in watercraft and type-approved in accordance with Regulation (EC) No 595/2009, complying with this Directive, with the exclusion of the exhaust emission requirements set out in Part B of Annex I.
Points (b) and (c) of the first subparagraph shall apply subject to the condition that where an engine is adapted for installation in a watercraft, the person undertaking the adaptation shall ensure that full account is taken of the data and other information available from the engine manufacturer in order to ensure that, when installed in accordance with the installation instructions provided by the person adapting the engine, that engine will continue to meet the exhaust emission requirements of either Directive 97/68/EC or of Regulation (EC) No 595/2009, as declared by the engine manufacturer. The person adapting the engine shall declare, as referred to in Article 15, that the engine will continue to meet the exhaust emission requirements of either Directive 97/68/EC or of Regulation (EC) No 595/2009, as declared by the engine manufacturer, when installed in accordance with the installation instructions supplied by the person adapting the engine.

5.
At trade fairs, exhibitions, demonstrations and other similar events Member States shall not impede the showing of products referred to in Article 2(1) which do not comply with this Directive, provided that a visible sign clearly indicates that such products do not comply with this Directive and will not be made available or put into service in the Union until they have been made to comply.

[valhalla360]

Originally Posted by Montanan

If the boats USCG documentation has expired then the vessel has become defacto stateless and thus is solely under the regulatory control of the country in which it is located [e.g., on the hard]; it will have lost its USA nationality.

No, it is a USCG documented vessel with an expired form.

If you try to put it on a different registry, it will have to be removed from the USCG listing...In theory, the new country will demand it before adding it to their registry but if you sneak it thru, it could be a mess if it shows up under two countries.

This boat has a number of paperwork issues. I would make the seller fix them before taking ownership:
- Make them update and remove it from the USCG and provide official documentation that it's been completed.
- It appears to be beyond the 18month TIP limit, so VAT is likely due regardless of your residency.
- I don't think you qualify for CE exemption (if permanently imported) as it arrived in the EU after the due date.

Honestly, unless there is something special (unusual design, sentimental, etc...) I would walk away. Plenty of other options

[Montanan]

As to CE certification

What are the engine emissions requirements?

This is the most important requirement, because failure to meet the minimum EU standards will require a repowering of the vessel prior to issuance of a certificate. Typically there is an engine emissions plate indicating a certain certification located somewhere on the engine. The following [I believe but am not certain] is the current engine emissions certification requirements
:
Regulation Comparison for CI Engines (Diesel)
EU 97/86/EC [stage 2, P > 37 kW]
EU 97/68/EC as amended by 2004/26/EC [stage IIIA, IIIB, IV P>37 kW]
USA EPA Commercial Marine 1999 (40 CFR 94.212)
USA EPA Recreational Marine 2002 (40 CFR 94.212)
EU 88/77/EEC as amended by 2001/27/EC
UN Regulation ECE-R96 as amended by Series

What are the requirements sound emissions?


All boats must pass the sound emission requirements (75 decibels for single engine and 78 decibels for twins, triples, quads at 25 meters traveling at Wide Open Throttle WOT. Most outboards and stern-drive will pass this requirement if they are 2006 or newer.
Most certifying bodies have a lot of info on many boats and can generally create a professional opinion. If there is no supporting sound data, boats will have to be tested. And require the proper equipment and procedures. The challenge is to find a suitable location to set up the equipment and space to run the boat at WOT.

CE certificates are generally issued approximately 3-6 weeks after the inspection by the CE certifying body and repair of any variances (items that need to be changed) are completed and the repairs documented.

[letsgetsailing3]

Originally Posted by Montanan

If the boats USCG documentation has expired then the vessel has become defacto stateless and thus is solely under the regulatory control of the country in which it is located [e.g., on the hard]; it will have lost its USA nationality.

Eh, I don't believe that's correct.

It's not "stateless" just because the registration expired. And though you can't simply pay the re-registration fees in order to get the registration up to date, that's still the organization who can prove the valid title and ownership, until it has been officially de-registered.

The one thing you really DON'T want in buying a boat is a question of ownership, so all of this would have to get cleared up.

[goboatingnow]

While the latest RCD directives include various engine parameters , most older low power yacht engines will not have difficulty in passing the test. The trouble is the test regime is awkward to establish ( read expensive )

But the boat may already be CE marked.

To be honest the vat is easily sorted If she’s not CE marked , walk away.

By the way after the TIP expires the first country is the place where the TIP expired not simply the first EU country she visited. The “ import “ event only occurs at the point of TIP expiration not the arrival of the yacht in the EU.

In practice nobody cares where you pay the vat once you can show it was paid. As was mentioned VAT is the remit of the current owner.

In general one simply agrees a value with the local customs office , pay the moola , get the recipe , end of story. Most local brokers will be well aware of the procedure and will have the relevant contacts.

Secondly polish registration will require vat proof if its a condition of your ownership.

By the way boats don’t have a nationality like a person. The term has no meaning , a boat with a National registration marking merely proclaims its registry. It is subject to all the laws of the country it resides in not its flag of registry. ( comity usually applies of course )

[goboatingnow]

[emoji825]

You will have to apply for a Certificate of Withdrawal, if you want to be able to register her elsewhere in the EU.



Tip : Buy the boat with Certificate of Withdrawal, so you do not have to arrange that yourself. Let the seller arrange that as part of the deal.

More commonly called a “deflaging cert “ or in certain registries “ a closing transcript “

It’s often done by the new owner as most new owners send in a copy of the bill of sale. But the sale process should ensure the registry is clear of encumbrances. .

Sometimes it’s done after the sale by the existing owner. It’s rarely done until the sale is irrevocable, because returning it to a National register can be expensive and time consuming.

Sometimes if there are encumbrances to be discharged the whole thing can need quite a bit of choreography.