Advice for buying Russian vessel from Malta

[Seven Spades]

I have seen a yacht I like that if being sold by a broker in Malta. He would like to charge me 18% VAT, I would like to buy the yacht ex-Vat and register and pay VAT here in GB. What are the rules regarding this and what would happen at any ports I call in on the way because the yacht will have no vat certificate. Would I use the Russian flag and avoid the problem?

<hr width=100% size=1><P ID="edit"><FONT SIZE=-1>Edited by Paul_Reading on 18/09/2004 17:22 (server time).</FONT></P>

 

[Lizzie_B]

As Malta is now in the EU there is no reason why you cannot register the boat as British as soon as the purchase is complete.provuding that you're entitled to British Residency. You can download a copy of the British Bill of Sale forms, registration forms and if necessary change of name forms from the MCA website. Simply get the vendor to complete his part of the British Bill of Sale form and fill in the amount in sterling that your bank has transferred into Maltese currency for the purchase, keep the bank transfer documentation. It is up to you where you pay VAT as the boat you say is still Russian, and so you will be counted as the importer into the EU.
If you should decide to pay VAT in the UK you will be charged 17.5% of the 'Landed Value.' This means that if the vessel is less than 12metres in length you will be charged import duty at approx 1.7%. If the boat is more than 12metres it is exempt import duty.To work out the landed value they will add the purchase price on the bill of sale to import duty (if liable) plus the cost of bringing her to Britain, eg, payments to delivery skipper and crew (if used) insurance if specific for that journey and any other shipment costs and possibly Port Tax depending where she is landed in the UK. You will then be charged VAT at 17.5% on the total of all this. You will need to get a commodity code number from HM Customs and Excise. They have a very helpful help line which you can get off their website. However, if you pay VAT in Malta, you will only pay18% on the purchase price, and then you're free to sail her anywhere in the EU without hassle, assuming of course that she is RCD certificated, but that is a whole other can of worms. It may be better to get the RCD sorted in Malta as well.rather than be the rip off prices that are charged in Britain. So I would advise you register as British on purchase, but pay the VAT in Malta.

<hr width=100% size=1>

 

[Seven Spades]

I don't want to pay the VAT in Malta because I am VAT registered and I want to re-claim the VAT, I intend to have the boat coded and put into charter management. So, if I understand correctly I can buy the yacht in Malta and leave her as a Russian reregistered yacht until I get it back here. Then I may have the RCD problem to deal with.

I assume that there is no way to sort out the RCD problem in Malta and then pay the VAT here.

<hr width=100% size=1>

 

[Lizzie_B]

I think that would depend on what your nationality is. I think you may find that a vessel can only registered in a country where a person has the appropriate entitlements (usually residential, or citizenship) to be entered on that country's shipping register. If you are a British citizen or resident then normally you would have to register in britain. Registering the boat, does not carry any liability to pay VAT. You become liable to pay VAT when the vessel has been in EU waters continuously for 6 months regardless of it's registration. You would gain nothing by registering the boat as russian (even if you were allowed to). The minute you complete the sale you are deemed to have imported the vessel into the EU. You then become liable to pay the VAT. If, as you say, you can reclaim the VAT, then pay British VAT at the time of the sale, and tell customs and excise that you will be bringing her back yourself. You don't physically have to have the boat in the UK to pay VAT. But having the right paperwork for the journey back to Britain through EU waters is a big potential hassle saver. I don't know how you go about reclaiming the VAT, presumably you can do it as soon as you have paid it. Theoretically, if the boat will have been in EU waters for less than 6months (from the time of her arrival from Russia into EU waters, until the time you can get her out of EU waters, you could register her as British in the Jersey, Guernsey or the Isle of Man(which are not in the EU), and then re enter EU waters to the UK and have bought yourself six months to sort out the VAT and RCD, but only if the time from entering to leaving EU waters is less than six months. The vessel also becomes liable to the RCD the minute you own the boat, unless you can claim she is exempt. The cases for exemption are on the RYA website, but basically you have to be able to show that the vessel was in the EU or a dependency of an EU nation before 1998, or is designed solely for the purpose of racing. It is illegal to operate the vessel within EU waters without RCD compliance or exemption. One way around it is to self certificate the vessel as category D in Malta, then re certify her in the UK when you get back. I seem to recall, there are some clauses specific for yachts going to be used for commercial charter. The Spanish in particular are very twitchy about such things. Strangely enough, although the RCD categories are described in what most people would think of as geographical terms, they do not actually restrict the where you may use the boat, so it is quite legal to use a D category boat Offshore, it's just that you can't sue the EU if things go wrong. Hope this helps. Any further queries, PM me.

<hr width=100% size=1>

 

[scarlett]

S & D [brokers] of Malta say that VAT is 8% at the moment. Is this correct? If it is then this may influence decisions.

<hr width=100% size=1>

 

[Seven Spades]

No 18%, I don't want to pay VAT in Malts because I am VAT registered here. The practical issue is how to buy the yacht in Malts and sail her here without being impounded on the way either for VAT or RCD.

<hr width=100% size=1>