Boat buying in Croatia

[porth]

We are looking to buy a boat around 40ft in Croatia or in that area of the Med. Many boats are advertised as not VAT paid. If I buy such a boat, do I have to pay tax straight away? Or do we escape if we leave the country/EU within a certain period of time? We are planning to sail for a year, then either sail the boat home (Norway, outside the EU for tax purposes) and keep it, or sell it somewhere in the Med. Obviously we have to pay VAT on entering Norway, so it would hurt to have to pay twice!
Anyone any experience of this or any ideas of sources of info? Thanks folks.

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[Metabarca]

I'm not an expert in this, but I imagine that if you are a non-EU citizen buying in a non-EU country, then there's no VAT to pay. The VAT will become payable as soon as you import it to the EU.

<hr width=100% size=1>Adriatic links here: <A target="_blank" HREF=http://www.comoy.com/saillinks.html>http://www.comoy.com/saillinks.html</A>

 

[Gypsy]

If the boat has a non EU flag it can enter the EU for up to 18mths without paying VAT. It seems that you only need to exit the EU for a short while to a non-EU country and when you return a new 18mth period begins. There may be some requirement for the owner to be a non-EU citizen too. www.noonsite.com has some good information and EU rulings on this subject.
Ray

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[Koeketiene]

It seems that you only need to exit the EU for a short while to a non-EU country and when you return a new 18mth period begins.

True - Yanita's Gibraltar registered (not EU for tax/VAT purposes).
One trip every 18 months to the Channel Islands (also not EU for tax/VAT purposes) is enough to get a new period of 18 months started.
I'm still surpised everyone isn't doing it. The opportunity is there AND it's legal!

<hr width=100% size=1>Experience is a good teacher, but she sends in terrific bills.

 

[Roberto]

how do you prove you have been outside the EU, for ex to the CI ?

is it enough to have a marina receipt for example ? do you need to notify UK customs you are going outside and then when you come back ?

thanks


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[porth]

Ok, so if my Norwegian wife buys the boat in the EU, and we exit the EU within 18 months, we should be ok?

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[porth]

Thanks for the help. Very useful link too; the waiting is getting harder and 2 years seems like eternity! But we do need that amount of time to organise/save/renovate the house. Unfortunately!

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[Koeketiene]

how do you prove you have been outside the EU, for ex to the CI ?

I have the harbourmaster sign / date & stamp my logbook.

is it enough to have a marina receipt for example ?

no

do you need to notify UK customs you are going outside and then when you come back ?

Why should I? As far as they are concerned I'm a foreign flagged vessel - I'll gladly show them all the paperwork when they stop me & ask me.

<hr width=100% size=1>Experience is a good teacher, but she sends in terrific bills.

 

[AndrewB]

\"I\'m still surpised everyone isn\'t doing it.\"

It isn't legal, that's why not. EU residents don't qualify for temporary importation relief. Otherwise we all would.

Don't let that put you off though!

 

[Koeketiene]

Still surprised

Hi Andrew,

I'll be the first to admit that it involves some creative, latheral thinking. Here goes: I (EU resident) dow't own the boat. I merely own the Gib registered Ltd company that owns the boat. The Gib registered Ltd company that owns the boat does qualify for temporary importation relief.

So, don't let me stop you.

Surely, when cruising warmer climes you must have come across all these super yachts flying exotic ensigns (Gib, Bahamas, BVI, Cayman, Isle of Man, CI, etc...). Have you never wondered why? When I was stationed in Gib ages ago, and walking past the marinas I noticed the same thing. I did wonder why, and made it my business to find out how and why it was done. I came to the conclusion that if I ever owned a boat, that was how I would do it.

Honestly: VAT is a tax on the ill informed.

<hr width=100% size=1>Experience is a good teacher, but she sends in terrific bills.

 

[MapisM]

VAT is a tax on the ill informed?

On behalf of some million people around the world, who are paying VAT when purchasing underwear, shoes, boats, cars, sunglasses, or whatever else: we might be ill informed, but we still recognize "tax avoidance" techniques.
The fact that they have been named differently from "tax evasion" means neither that they are fair, nor legal.

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[Sea Devil]

Re: Still surprised

Whilst I can see that a trip to Morocco from Spain requires you to clear in and out of Euro waters and the same with Morocco waters are you sure that the channel islands are the same? Its ages since I sailed there but I do not remember 'clearing in and out'?

Are you certain about the 18 month rule- are you sure it is not in a period of 5 years or something like that????

If you are right about all this it solves a load of problems -

<hr width=100% size=1>If you have time please visit my web site -
<A target="_blank" HREF=http://www.michaelbriant.com/sailing>http://www.michaelbriant.com/sailing</A>

 

[Roberto]

thank you



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[Koeketiene]

Re: Still surprised

CI are not part of the EU. They even mention this in tourist brochures. You are rechnically required to fly a yellow Q when returning from the CI - this was also discussed here in an earlier thread.
The fact is that nobody does this. In fact, I have once been told of for doing this by a French customs official in Cherbourg.

Dead certain - 18 months.

William

<hr width=100% size=1>Experience is a good teacher, but she sends in terrific bills.

 

[Koeketiene]

Re: VAT is a tax on the ill informed?

Quite understand your point of view - and you're welcome to it.
Before you claim the moral high ground, consider this:

How many of you have ever bought a CD or DVD from www.play.com? And how many of you have declared it to C&E? Play.com, being a Jersey based co, does not charge VAT (hence their low(er) prices).

<hr width=100% size=1>Experience is a good teacher, but she sends in terrific bills.

 

[AndrewB]

Creative lateral thinking, or the lack of it.

My purely linear mind clearly doesn't stretch far enough. When the possibility of British Dependency registration has been discussed here in the past, three objections have been raised.

1. Consultant's prices for setting up and managing a CI/Gib company are high enough to make this uneconomic in the UK for anything short of a mega-yacht.

2. UK Customs will only accept EU residents in charge of a non-EU registered yacht claiming temporary importation relief if it can be proven to be a bona-fide short-term charter. Actually, this isn't precisely what is stated in the HMCE advice on yacht importation, but is the advice given by specialist consultants, see e.g. <A target="_blank" HREF=http://www.henleyglobal.com/yachtregistration.htm>HERE</A>, section on "VAT Implications in the EU".

3. UK Customs will not accept short visits to the CI as 're-export' for the purpose of restarting the 18 month clock, either for EU residents or others. (Again, I don't know where this advice comes from).

Tell me it all ain't true!

 

[Koeketiene]

Re: Creative lateral thinking, or the lack of it.

Hi Andrew

It cost me £850 to set up the Co and £225 annually (to maintain the Gib tax exempt status).

This enabled me to buy a used (VAT not paid) yacht for £43,000. At the time the going rate for an Etap 38i that age was around £60,000 is you shopped around.
When she completes refit early next year I will have spent another £22,000 on her (no VAT paid - a saving of approx £3,750).
This is a total saving of £20,000 in VAT. In short, the taxman nearly paid for my refit.

If you're interested, I could PM you the link of the Gib Co that sorted me out.

<hr width=100% size=1>Experience is a good teacher, but she sends in terrific bills.

 

[MapisM]

Moral high ground...

...does that still exist? Not seen much around, lately.
Actually, I did not make any morality claim, though I never bought any cd from that site. Are their prices any good? /forums/images/icons/wink.gif
I just wanted to point out that, rather than classifying boat buyers based on how ill informed they are, I would distinguish between those who are capable and willing to go through what I called "tax avoidance" practices (because this is what they are, really: I understood that you claimed the legality of that, in a previous post) and those who are not.

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[Koeketiene]

Re: Moral high ground...

Well, it's not illegal.

And have you noticed how all these "flags" (Gib, BVI, IoM, CI,...) are somehow "British". I'm sure if our government really wanted to, they could do something about it.

All in all, this constructution has allowed me to realise a dream that would otherwise have been way above my means financially. Still cutting it close tho.



<hr width=100% size=1>Experience is a good teacher, but she sends in terrific bills.

 

[cozy]

Re: Moral high ground...

Very interesting thread this. To focus purely on the legalities rather than the moral issues, I am curious to know whether your approach has been directly scrutinised by HMCE. If it has, and you've emerged unscathed, it clearly adds a lot of weight to your argument. It strikes me that, as with so many things legal, there are questions of interpretation, and when you push the boundaries you run the risk of having it decided in court.

As an aspiring rather than current boat owner, I'd be delighted to hear that it has been so decided in your favour!


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