Buying an overseas vessel, Registration Questions

[boatman61]

If you purchase in the UK you can register Part 1 through an agent who will create a holding company for you in the UK, you will however be liable for EU VAT if you sail in EU waters unless you follow the 18mth exemption rule
The same will apply if you buy UK and register with the Polish flag, once you enter EU waters you Will be liable for VAT, no escape as it is EU flagged/unpaid VAT.

[Montanan]

For a US citizen, there is no advantage to flagging your boat with a foreign country. In fact as a US citizen one should desire to have the protection of law associated with your country such that any litigation associated with international water incidents will be referred to the jurisdiction of the flag nation, that is back in the States.

It is a very simple matter to document the vessel with the US Coast Guard and thereby have the vessel be permitted to wear the Stars and Stripes.

In either case, as a non-resident of the UK or the EU, your vessel [regardless of flag nation] can be permitted the 18 month temporary admission of importation, after which time the vessel will need to be taken to a foreign port outside of the customs territories of the UK or the EU and then it can be returned to the UK or the EU and have a renewed 18 months of temporary admission status.

Before purchasing your foreign vessel, I highly recommend that you purchase an abstract of title from the flag country's vessel registration agency so as to have complete recordation of that vessels recorded ownership and of any encumbrances to title or liens. In the USA, an abstract cost only US$25.

Be sure to obtain the original invoice that shows that VAT was paid for the vessel and retain such for as long as the vessel is operational, i.e., not scrapped. It will have the VAT registration number of the company that originally sold it. Be sure that it is an original document and not a copy.

To the best of my knowledge, flagging the vessel with the USA does not change its VAT paid status, if any paid status is in effect.

The US Coast Guard Vessel Documentation center can be accessed on line at:

https://www.dco.uscg.mil/Our-Organiz...ons-and-Forms/

https://www.dco.uscg.mil/Our-Organiz...on-Center/FAQ/

Of course, you as an USA citizen will be subject to the immigration restrictions, e.g., short stay visa in the UK or the EU limited to 90 days in any 180 day rolling period. The vessel has its own permitted temporary admission and you will have yours, which is much shorter unless long stay visas are pursued and granted.

[goboatingnow]

Wrapping a boat in a company is a really bad idea yiu will be exposed to vat registration,bik calculation etc. since their are several regisyerirs ties that don’t requiresuch a step it’s best to consider moving registries

[boatman61]

If you go the LLC route you may as well choose Delaware or one of the other states that do this and fly your flag with pride.. its a path quite a few Europeans choose to avoid taxes.

[BBill]

Not to step on toes but your best bet is to use a documentation agent in the USA that does this process on a daily basis. Find one though brokerages that sell large yachts in south Florida.

[jalmberg]

If you have an interest in living in Europe for a few years, and have the financial means to do so without working, then you can look into getting a long term visa. We found France was quite welcoming as long as you can support yourself. Once you arrive and have your visa validated, you are effectively a resident of France, subject to annual renewal of that privilege. You could then register the boat in France. I forget if you said the boat was VAT paid or not. Anyway, it’s doable if you have the money and don’t mind doing a LOT of paperwork to French standards. In France (and probably the rest of Europe), if you have the right paperwork, everything is easy. If not, it’s impossible. It’s as simple (and difficult) as that. Go back and do it again!

Good luck!

P.S., once you get here, you will discover (despite the propaganda) that many things here are cheaper than in the States. It makes up for some of the costs of getting here in the first place.

[smacksman]

A bit round the other way, but when I bought a boat in the US from the UK, when asked for a US address I just used the marina address and telephone ( after asking their permission of course) Also another stumbling block was a US security ID (can't remember what the name is) and 999999 work well. As an exercise, I registered my US boat on the UK Small Ship Register for £25 - it didn't ask where the yacht was.
If you need a UK address then use mine. After that great hospitality I was shown in the US it is the least I can do.

[letsgetsailing3]

Originally Posted by jalmberg

If you have an interest in living in Europe for a few years, and have the financial means to do so without working, then you can look into getting a long term visa. We found France was quite welcoming as long as you can support yourself. Once you arrive and have your visa validated, you are effectively a resident of France, subject to annual renewal of that privilege. You could then register the boat in France. I forget if you said the boat was VAT paid or not. Anyway, it’s doable if you have the money and don’t mind doing a LOT of paperwork to French standards. In France (and probably the rest of Europe), if you have the right paperwork, everything is easy. If not, it’s impossible. It’s as simple (and difficult) as that. Go back and do it again!

Good luck!

P.S., once you get here, you will discover (despite the propaganda) that many things here are cheaper than in the States. It makes up for some of the costs of getting here in the first place.

Of course with money, often comes tax obligations. And the French tax obligations are non-trivial.


I'd rather pay the VAT than the income tax, and I definitely don't want to pay both.

[letsgetsailing3]

On a related note, I'm wondering what happens if a U.S. citizen buys a boat with the VAT paid.

Can you keep that VAT status if you register the boat in the U.S.? Or are you then faced with the necessity to register it in a shengen country?

[jalmberg]

Originally Posted by letsgetsailing3

Of course with money, often comes tax obligations. And the French tax obligations are non-trivial.


I'd rather pay the VAT than the income tax, and I definitely don't want to pay both.

By all means, get rid of the money then!

Seriously, the US and France have a tax treaty which means you don’t have to pay both taxes. You do have to file a very simple tax return, although, that’s not really what it is.

You can’t get into Disneyland without paying for a ticket.

[Montanan]

Originally Posted by letsgetsailing3

On a related note, I'm wondering what happens if a U.S. citizen buys a boat with the VAT paid.

Can you keep that VAT status if you register the boat in the U.S.? Or are you then faced with the necessity to register it in a shengen country?

Whoa, now you are confusing many distinct issues.

The USA does not have VAT [nor do any of the 50 States].

Whereas the individual nations of the EU and the UK have their own VAT. If VAT is paid for a good in one EU nation then the good has VAT-free transit within the EU.

The VAT status remains with the good; flagging of the vessel [the good] does not change the VAT status of the good. Albeit if the good is exported it can loose its VAT paid status upon reentry [import] and may need to have VAT paid anew. For a vessel, I believe one has a 3 year departure period wherein the vessel will retain its VAT paid status as long as the vessel is not sold or significantly repaired / refitted, that is getting into the details.

Individual States within the USA may have Sales & Use taxation on goods and services, not all States in the USA have Sale and Use taxation.

Schengen territory involves immigration / visa [that is to say, travel between countries by persons, not goods] and does not involve customs or VAT matters.

The EU nations and the UK have their own customs territory and their own VAT regimes.

It is a simple task for a US citizen to have their vessel documented with the USCG so as to have it be able to wear the Stars and Stripes. Just go to the USCG documentation website and follow the instructions and complete the forms.

[boatingisbetter]

It was 1995. So I don't recall all the details. But I went to the US Embassy in London along with the seller. Together we signed some documents and the boat was provided a pretty fancy set of paperwork with a ribbon and a wax stamp.

I was able to use that throughout my travels in Europe with the boat. Perhaps the US Embassy in London could help you also.

This Embassy visit has nothing to do with VAT. Any boat remaining in the EU VAT Grouping was required to pay the VAT if it had not been already paid. If the boat remained in the EU VAT'd Countries beyond Six months. (again that was 1995).

The good news is VAT is only paid once. (I think)

[letsgetsailing3]

Originally Posted by Montanan

Whoa, now you are confusing many distinct issues.

The USA does not have VAT [nor do any of the 50 States].

Whereas the individual nations of the EU and the UK have their own VAT. If VAT is paid for a good in one EU nation then the good has VAT-free transit within the EU.

The VAT status remains with the good; flagging of the vessel [the good] does not change the VAT status of the good. Albeit if the good is exported it can loose its VAT paid status upon reentry [import] and may need to have VAT paid anew. For a vessel, I believe one has a 3 year departure period wherein the vessel will retain its VAT paid status as long as the vessel is not sold or significantly repaired / refitted, that is getting into the details.

Individual States within the USA may have Sales & Use taxation on goods and services, not all States in the USA have Sale and Use taxation.

Schengen territory involves immigration / visa [that is to say, travel between countries by persons, not goods] and does not involve customs or VAT matters.

The EU nations and the UK have their own customs territory and their own VAT regimes.

It is a simple task for a US citizen to have their vessel documented with the USCG so as to have it be able to wear the Stars and Stripes. Just go to the USCG documentation website and follow the instructions and complete the forms.

My question may have been poorly worded, but I'm not actually confusing anything. I've owned boats, so I know how the U.S. registration and documentation works. I realize there's no VAT there.

I'm asking about maintaining a "VAT paid" status on a boat that I would likely buy and keep in the Med, and may resell there when I no longer need it.

So it sounds like for my purposes, it may make sense to buy a "VAT paid" boat, register it in a Shengen state, and not be subject to the 18 month or the 3 year rules. This may also help with insuring the boat.

I'm just trying to understand the options in a general sense.

[boatman61]

Originally Posted by letsgetsailing3

My question may have been poorly worded, but I'm not actually confusing anything. I've owned boats, so I know how the U.S. registration and documentation works. I realize there's no VAT there.

I'm asking about maintaining a "VAT paid" status on a boat that I would likely buy and keep in the Med, and may resell there when I no longer need it.

So it sounds like for my purposes, it may make sense to buy a "VAT paid" boat, register it in a Shengen state, and not be subject to the 18 month or the 3 year rules. This may also help with insuring the boat.

I'm just trying to understand the options in a general sense.

If the boat is already EU vat paid when you purchase it, it will maintain that status for as long as it stays in the territories regardless of its flag.
Just make sure you get the written proof when you buy the boat.
If it is UK vat paid you will have to follow the 18mth rule while in EU territories.

[boatman61]

Addendum... If you buy a vat paid boat outside the EU this will nullify the vat paid as it will be considered an import by the new owner..
Trips to non EU countries like Turkey, Tunisia etc are fine as long as you return within a time period.
Similarly, a VAT paid boat exported from the EU (such as when long-term cruising) may also qualify for relief on its return if it’s returned to the EU within three years of export, imported by the person who exported it from the EU, and has not undergone significant repairs that increased its value.