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Montanan · 19-03-2023, 16:39

Why is the boat located in Croatia of not EU VAT paid status? Was it under temporary importation status? Had it been of Croatian VAT paid status prior to Croatia ascending to the EU in 2022; was it located in Croatia upon the date of ascending to the EU? Has the vessel lost its VAT paid status? Where was the vessel manufactured? When was the vessel imported into Croatia and from where was it imported?

THE SALE IN INTERNATIONAL WATER (NON-VAT PAID BOAT)

Of keen issues are whether one need to carry out a formal exportation declaration if no other specific customs regime has been used (i.e. Inward Processing) and / or if Croatia / EU customs will accept that a sale in international waters is assimilated to the touch of a non-EU port.

Reference: https://www.linkedin.com/pulse/sale-international-water-non-vat-paid-boat-ymca-yachting/

Tax is rarely straightforward and VAT in relation to yachts is no different. It is very rare that there is a simple yes or no answer. You should always obtain evidence of the VAT position before purchasing a boat.

https://www.keystonelaw.com/keynotes...ers-and-owners

Should VAT have already been paid on the yacht, and if so, has it?
All yachts built in or brought into the EU on or after 1 January 1985 must be able to prove their VAT paid status. A boat built before this date is deemed to have VAT paid status if it was in private ownership and within the EU at midnight on 31 December 1992. Proof of this may be required by the local customs and can be difficult to provide as log books, marina receipts or invoices going back that far have often been lost or destroyed or simply not passed on as ownership has changed hands. If documentary evidence of the location of the vessel on 31 December 1992 cannot be provided you should provide whatever documents you have so that the local customs may form a view as to the location of the boat based on the documents you do have. Some sales have fallen through because such information cannot be provided and a potential buyer has an increased risk of being stopped and fined for a not having a VAT paid boat.

If the yacht is advertised as VAT paid it is important to request documentary evidence of this from the seller or their broker. For yachts built after 1 January 1985 the VAT should have been paid by the initial purchaser or importer. Evidence could by way of a receipted invoice or VAT certificate. Ideally you would want the original, but in the absence of this certified copies may be accepted. If the yacht is being sold by a company you will need to check whether it reclaimed any VAT paid when it purchased the yacht and thus the boat is now deemed VAT unpaid – a good point for brokers especially to consider.

If VAT should have been paid and was not, or there is no proof of the boat’s VAT status or the owning company paid and reclaimed VAT then the liability for paying any VAT due lies with the current owner and will pass to the purchaser on his/her purchase of the yacht.