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Old 14-12-2020, 15:19   #46
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Re: Where to flag and pay VAT

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Is there a fourth option of buying a boat that has EU VAT paid status, and then flagging it as British? Or can I buy a boat with no VAT paid on it, pay EU VAT and then flag it as British? Would that both tie me to the uk from a tax residency perspective and remove the need to dart back and forth from non EU waters?

If my understanding is correct, you can easily do either of these. Neither will affect your tax residency. Both will save you the inconvenience of having to leave EU waters every 18 months. The downside is that you have to pay the extra cost of the VAT, either in the purchase price, or separately.


Having said that, please don't take financial advice from random people on the internet like me. I might not know what I'm talking about. Consult a professional who specialises in this area.
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Old 14-12-2020, 15:24   #47
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Re: Where to flag and pay VAT

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Is there a fourth option of buying a boat that has EU VAT paid status, and then flagging it as British? Or can I buy a boat with no VAT paid on it, pay EU VAT and then flag it as British? Would that both tie me to the uk from a tax residency perspective and remove the need to dart back and forth from non EU waters?
If you buy a boat with eu vat paid , and your desire is to keep it in the EU , then it would be very silly to UK register it as there is a danger that you will be accessed under temporary admissions procedures. , whereas if you EU register With eu vat paid proof , you can keep it in the EU for ever.

The reason is that “ technically “ taking a UK boat out of EU waters , removes its EU VAT status as you are not entitled to RGR.

While the sane is true for eu reg , you are much less likely to be queried
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Old 15-12-2020, 02:10   #48
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Re: Where to flag and pay VAT

If you buy a boat that is EU VAT PAID it doesn't matter then what national flag you fly off the back. Flag status has nothing to do with VAT Status.

Our is UK Registered on the SSR but Croatian VAT Paid and currently in Greece. And she will NOT lose any VAT Paid status at the end of the year over her red ensign.

If you are not planning on sailing it back to the UK then probably easier to pay EU VAT rather than having to take it out every year (18 months)
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Old 15-12-2020, 04:31   #49
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Re: Where to flag and pay VAT

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If you buy a boat that is EU VAT PAID it doesn't matter then what national flag you fly off the back. Flag status has nothing to do with VAT Status.

Our is UK Registered on the SSR but Croatian VAT Paid and currently in Greece. And she will NOT lose any VAT Paid status at the end of the year over her red ensign.

If you are not planning on sailing it back to the UK then probably easier to pay EU VAT rather than having to take it out every year (18 months)
Your statement needs nuancing

Exporting any VAT paid item from the EU , for example visiting a non Eu country means that vat paid status is lost

On re-importing that boat into the EU, ie on returning from that country , the situation for a UK tax resident , upto 31st Dec , was that RGR ( returned goods relief ) was automatically applied, this is available for absences of upto three years

However RGR relief is only available to entities established in the EU , hence it applied to UK owners todate

After 31st Dec , UK owners of EU vat paid items , cannot normally avail of EU RGR , hence their “ exported “ EU boat will be readmitted under the TAP ( temporary admissions procedure ) this is the 18 month vat clock . But EU vat paid status is lost

So you are correct , any EU boat ( uk or Croatian , or whatever ) retains its “ VAT status “ once it remains in the EU taking it out , exports it , and looses it vat status , the issue for uk established persons after dec31 , is its difficult to regain EU vat status.

This is exactly why HMRC have advised uk owners of uk vat paid boats abroad for more then three years that they will be liable for UK vat on return to the uk.

Vat isn’t related to the flag of the vessel , that’s quite correct , but it is rekated to the tax establishment of the beneficial owner

So yes your UK boat with vat paid is fine as long as it never leaves EU waters

Of course whether the Greeks or anyone else check any of this is another question entirely, but UK registry will tend to provoke more questions after Dec 31 , so it would be better to be EU registered in general
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Old 16-12-2020, 13:03   #50
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Re: Where to flag and pay VAT

  • Flag has nothing to do with VAT. You can flag it in the UK without any impact on VAT.
  • Since you are a UK resident you can buy a NON-VAT paid boat and use the 18 months rule. This is not a problem in the Med, because there are enough countries to go to.
  • You can use your German passport to avoid the 90/180 day Schengen shuffle.

The tricky bit will be to prove to and convince various authorities that although you travel under a German passport, you are a UK resident and therefore not obligated to pay "EU" VAT but sail under the temporary import rules.
The rules, especially the exceptions to the rules are not always well known by local port police, customs officers, etc.
So if you go this route I would strongly recommend:
  • print out the rules and applicable exceptions and maybe even have it in the local language. Include references to applicable law. the EU site has a ton of information.
  • have ample proof that you reside in the UK.
  • Stay calm and polite when talking to local authorities.

Alternatively, pay VAT in the EU country with the lowest VAT rate, I believe that's Malta. That would mean a straight trip from where you buy the boat, to where you plan to pay VAT.
advantage of this is that you have no hassles what so ever.
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Old 18-12-2020, 18:13   #51
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Re: Where to flag and pay VAT

Gibraltar is fine as a reset port for the VAT clock for UK boats in EU waters over 18 months, I have had this verified.
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Old 19-12-2020, 16:18   #52
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Re: Where to flag and pay VAT

Malta, as far as I know, offers the greatest benefits - but you have to be a resident, which will, for all countries, be a recurrent problem.
Most have the boat registered through a local agent - lawyer or like.
VAT is paid to the country in which the owner is resident and purchase tax at the rate in the country of purchase transaction.
No purchase tax on purchases of pre-owned boats (which includes demonstrators)
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Old 19-12-2020, 16:30   #53
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Re: Where to flag and pay VAT

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Originally Posted by chasfgr View Post
Malta, as far as I know, offers the greatest benefits - but you have to be a resident, which will, for all countries, be a recurrent problem.
Most have the boat registered through a local agent - lawyer or like.
VAT is paid to the country in which the owner is resident and purchase tax at the rate in the country of purchase transaction.
No purchase tax on purchases of pre-owned boats (which includes demonstrators)


A boat is a ď new means of transport ď

Hence VAT is paid in the country of intended destination of the ď means of transport ď the residence of the buyer is not relevant ( though its usually the same ?

Again this similar to goods, if I as a Irish tax resident buy goods in Spain , I pay Spainish vat

Equally if I buy a boat in Spain whose destination is Ireland. I pay the vat in Ireland. ( typically I have to then reclaim Spanish vat )

Iím not sure what you mean by purchase tax , if you mean vat on purchases this only applies to vat registered traders
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Old 19-12-2020, 16:33   #54
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Re: Where to flag and pay VAT

Malta has a VAT rate of 18% , but it also has a reduced rate on lease back schemes. However there is considerable complexity and itís not suited to the average pleasure yacht
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Old 19-12-2020, 16:39   #55
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pirate Re: Where to flag and pay VAT

I don't think VAT is applicable to secondhand boats.. so if for example I, living in Portugal buy a secondhand boat in Holland I don't pay VAT.. nor do I have to pay it on arrival in Portugal unless I sail it out of the EU for more than 3yrs.
The same as a boat bought in Malta which I then sailed to Portugal.. no VAT.
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Old 20-12-2020, 16:05   #56
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Where to flag and pay VAT

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Originally Posted by boatman61 View Post
I don't think VAT is applicable to secondhand boats.. so if for example I, living in Portugal buy a secondhand boat in Holland I don't pay VAT.. nor do I have to pay it on arrival in Portugal unless I sail it out of the EU for more than 3yrs.

The same as a boat bought in Malta which I then sailed to Portugal.. no VAT.


Itís not applicable to second hand boats that are vat paid and resident in the single market , ie in free circulation.

Itís entirely applicable if the boat is vat not paid ,new or 2nd hand. ( ex charter , or in the EU under the temporary admissions procedure , or owned by a vat registered business )
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