Boat missing VAT receipt

But there is nothing in your reference to say that finance companies may reduce the value of the boat. That is only an assumption that you have made.

All I am asking (if that is the right word) is evidence that this is the case, as the only time I have ever come across it is from you.

So start living again.
 
Roger i dont have time to explain at length (will do later if you wish) but you are not correct on the residency thing. Deleted User is correct. As Deleted User said it is entirely possible and legal (and common) for a non EU resident to have a boat in use in the EU not VAT paid. This situation happens by virtue of an EU-wide exemption from VAT liability on the import of a boat into the EU (for personal use) by such a person, provided the boat is re-exported within 18 months (which in the Med means a quick sail to Gib or Tunisia then back).

You mentioned the VAT Act. The detailed law on this (in the UK) is, incidentally, not in VATA 1994; rather it's in the main 1995 VAT regs (para 123 et seq). Across the rest of the EU this same rule has been enacted in all the local laws, becuase it's stipulated in the 6th Directive
 
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you are not correct on the residency thing. Deleted User is correct.

[/ QUOTE ]I refrained to enter into yet another VAT saga so far, but I must say that I found Rogershaw comments rather accurate. Where do you think he's wrong, exactly?

Surely Mr.X, a non EU resident, can keep a boat in EU Med waters practically forever, by mean of 18m TI, just cruising non-EU Med Countries every year and a half. But the 18m TI remains, ermm... temporary.
If and when Mr.X sells his boat to Mr.Y (EU resident), Mr.Y must "import" the boat and pay VAT on her, even if the boat is already temporarily allowed to stay in EU waters - which is different from being imported in the EU.
But I can't see where Rogershaw said anything different.

The debate about whether the residency has a bearing or not seems to me a rather semantic issue.
We could say that it has a bearing because in this example it's the non-EU residency that allows Mr.X to keep a boat in EU waters without actually import and pay VAT on her, or we could say that it doesn't because it's the fact that the boat is not actually imported in EU that attracts VAT upon import.
Does it really make any difference?
 
If you are talking about <span style="color:red"> temporary </span> stay in the EU and any other country for that matter that is correct in the EU 18 months is the limit in other countries it can be different OZ is 12 months if I remember correct. The temporary import is not limited to non EU residents but also EU residents can do this also providing the boat is removed within the 18 month period. In a number of countries in the world the quick trip out and back to restart the clock has now been stopped by the requirement to be away fron the country for longer time some times between 3 to 6 months in in some cases up to 12 months.

I have have a number of friends who have done this both in the EU and RSA. One in fact kept his boat in the country concerned for longer that the allowed period and was found out and did a midnight sail.

My points have always referred to permeate imports into the EU or any other country for that matter.

There are lots of siutations where temporary importation takes place not just boats. Aircraft, cars and also items returned to country of manufacture for repair are also temporary imports for a limited period of time. I a lot of cases the temporary import is not re exported with in the due time due to lack of control/policing by the authorities and IMHO this has caused some of the authorities to try to check on "VAT statue" and to try to make the current owner responsible for what the authorities consider unpaid VAT but in fact cannot prove that the VAT has or has not been paid. Also where a fraud has taken place the perpetrator in the case of imported boat being sold illegally cannot be found at that later stage.
 
Thanks for the support

Just one point
[ QUOTE ]
the non-EU residency that allows Mr.X to keep a boat in EU waters without actually import and pay VAT on her, or we could say that it doesn't because it's the fact that the boat is not actually imported in EU that attracts VAT upon import.
<span style="color:blue">Does it really make any difference? </span>

[/ QUOTE ]

It would make a difference to me because as a non EU resident I could permanently import my boat from RSA to UK and pay no VAT , I wish, it may be possible as a returning expat of as a government official but not under normal conditions.
 
Hi Mapis. Ditto, I dont want to get into long posts on this, it's been done before. I typed a full reply then the puter lost it, urgh!

I dont agree with you. Yes, TI is strictly speaking temporary but as we all know it is used widely for repeated 18mth visits and so is de facto permanent. It is generally available only to non EU residents. In your example, it is not correct that Mr Y imports. The boat is already physically imported by Mr X and he has been releived from VAT on that import. Mr X then brings the TI to an end by selling the boat and Mr X is liable for VAT. If he doesn't pay then the goods become smuggled and subject to forfeiture, which is of great concern to Mr Y obviously. Hence Mr Y would want to make sure VAT was paid as part of the deal to buy the boat. That's exactly what Deleted User did, correctly. This is the one case where innocent Mr Y can lose his boat, and as you know from the earlier threads I owe the forum a post on all that - will do soon, been busy with new boat!

You asked where RS was wrong, exactly. He wrote: "If the person you purchased your boat in Spain is a private deal i.e. from a person not registered for VAT you would not pay VAT on that deal and as the person was non EU resident it is probable he was not VAT registered. If he purchased the boat in the EU from a VAT registered person then the he would have paid VAT to his supplier. If he imported it from outside the EU he would have paid VAT on the import."

The first sentence is substantially wrong. Vat registration is nothing to do with this. The boat is likely TI in that scenario and the sale triggers the VAT which becomes Deleted User's liability if not paid by seller. OK, RS has now said he wasn't talking about TI but that's a ridiculous cop-out. TI is widespread and what RS wrote was not good advice

Second sentence is correct. Third sentence, again, is only correct in a world where TI doesn't exist (RS has said he was ignoring TI) but I was commenting from the real world where TI is widespread and so that sentence is wrong imho. Non EU boaters generally don't pay VAT on import and claim TI instead.

RS the first website you linked to is poorly written by someone who doesn't understnad VAT well. I wouldn't rely on anything it says. The second para begins "Alternatively...". Alternative to what? It's plain wrong to suggest the TI and VATable charters are alternatives.

The second website you linked to has so many errors I don't know where to start. I'd ignore pretty much everything written there. Hey, call a French charter broker and enquire about chartering a 17m+ crewed boat, and say you want to start and end the charter in the Cote D'Azur, and ask the charter fee, than ask if there is any VAT on top of that fee, and compare the answer to what that website says!
 
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TI is strictly speaking temporary but as we all know it is used widely for repeated 18mth visits and so is de facto permanent.


[/ QUOTE ]

[ QUOTE ]

The first sentence is substantially wrong. Vat registration is nothing to do with this


[/ QUOTE ] interesting in the "proof of VAT statue" situation.

Only because the boat was a temporary import so Deleted User had to pay the VAT on the import

I wonder for how long this loop hole will be allowed. In others areas of the world this loop hole has been closed by having a minimum period for the boat to be out of the country.

If Deleted User's boat was a TI and Deleted User wished it to be permanent some one must bring VAT and import duty to account. In this case it could be either party dependent on the details of the purchase agreement and it seems it was Deleted User in this case.

I also found this
 
I'm not following all your logic. You say only becuase the boat was TI. But that's the normal situation with a non-EU owned boat in EU waters. It's not an unusual case.

TI is not a loop hole, it's a carefully considered part of the 6th Directive. It would be economic madness for Fr/Spain/It (who can veto changes to the 6th) to close this loophole, becuase the world's superyachts owners are not going to pay VAT every time they visit the Med after wintering in the Caribee. They'll just clear off. Remeber, when you impose a tax or close a loophole, you don't necessarily collect any tax. Often you just turn customers away. Anyway, it'll be around for many many years.

You're not correct on Deleted User. He didn't "wish" it to be permanent. He had no choice. The act of selling the boat made it permanent and rendered the SELLER liable to VAT, and would have left Deleted User holding a smuggled boat if the tax wasn't paid. Deleted User had no choice but to see the tax was paid as part of the deal. As a matter of law it isn't "either party" who pays the tax, it is the seller, but that doesn't much matter in practice.

Your link appears to refer to the crackdown on leasing schemes. I've said for years on here that they do not work as a matter of law (I've read several of them, boring as hell!). Lots of tax authorities incl UK have collected back taxes on these in the last 18mths or so. Note, these schemes are what the firms like those whose websites you linked to above used to peddle. Like I said, don't trust what you read on those websites! :-)
 
[ QUOTE ]
Your link appears to refer to the crackdown on leasing schemes. I've said for years on here that they do not work as a matter of law (I've read several of them, boring as hell!). Lots of tax authorities incl UK have collected back taxes on these in the last 18mths or so. Note, these schemes are what the firms like those whose websites you linked to above used to peddle. Like I said, don't trust what you read on those websites! :-)

[/ QUOTE ]

Well you may be right in general but I am aware of a leasing scheme that has been investigated twice by HMRC (different transactions) and once by another EU country's VAT authority, and has 'passed the test'. So I wouldn't quite agree that they all "do not work as a matter of law".
 
Fair comment Observer, sorry. I meant that lots of the schemes offered as mass-market-ready-made by these firms dont work, but I agree it is possible to design a leasing scheme that does "work" and I don't doubt you have come into contact with those. :-)
 
[ QUOTE ]
In your example, it is not correct that Mr Y imports. The boat is already physically imported by Mr X

[/ QUOTE ]Mmmm... Maybe we're getting again into semantic, which is something I'm usually not keen on.
But fwiw, I'm not sure your definition is correct.
Whenever a Croatian citizen (Mr.X) drives to Trieste, I wouldn't say that he "physically imports" his car into the EU, whatever that means.
And in any case, one thing I'm pretty sure of is that if, while Mr.X is in Trieste, he finds an Italian citizen (Mr.Y) interested in purchasing his car, then the burden of all paperwork, VAT payment, etc. is entirely on Mr.Y shoulders, and it is exactly the same if the car is physically located within or outside EU borders, at any given time.
So, it's Mr.Y who actually imports the car, regardless of who drove it into EU borders.
Why should be different with boats in a comparable situation?
 
[ QUOTE ]

Whenever a Croatian citizen (Mr.X) drives to Trieste, I wouldn't say that he "physically imports" his car into the EU,

[/ QUOTE ]
Sure he does. "Import" is a simple word. He pays no VAT to the tax office in Trieste becuase he qualifies for the simplified TI procedure, and in practice the TI isn't formalised. UK law allows specifically for zero paperwork TI, and the car driver is instructed to drive thru the nothing to declare channel. Strictly, he should file a form C110 but many dont bother and Customs do not chase hard for this.

[ QUOTE ]

And in any case, one thing I'm pretty sure of is that if, while Mr.X is in Trieste, he finds an Italian citizen (Mr.Y) interested in purchasing his car, then the burden of all paperwork, VAT payment, etc. is entirely on Mr.Y shoulders

[/ QUOTE ]
Nope. Mr X imported the car. If he sells it then he is liable for the VAT becuase the act of selling the car brings his TI to an end. If he doesn't pay, it becomes smuggled. Therefore, in practice Mr Y might do all the paperwork (if he really wants the car!), as the car is seizable, but the primary obligation to do the paperwork and pay the VAT is Mr X's.

All that said, some cars probably slip under the net. Customs have better things to do than chase £1k worth of VAT :-)
 
[ QUOTE ]
"Import" is a simple word

[/ QUOTE ]Naah, in economic terminology it isn't, and involves much more than just physical movements, as I'm sure you know. But in this context this is more a semantic debate than anything else - thus it's as boring as it gets, no point in digging further.

[ QUOTE ]
Nope. Mr X imported the car. If he sells it then he is liable for the VAT becuase the act of selling the car brings his TI to an end.

[/ QUOTE ]No way J.
As I said, I'm pretty sure this is not the way it works, at least for cars and for import in Italy - though I see no reason why it should be different anywhere else in EU.
When Mr.X decides to sell the car, he's still a foreign owner of a foreign good from EU viewpoint, regardless of where the good is located.
He's not terminating the TI and "transforming" it in an import. He's finalizing an export of the good from outside the EU in the very moment when he sells the car, and Mr.Y is importing it at the same time. Therefore, it's Mr.Y who's liable for VAT, 'cause he's the one who is importing the car.
And aside from the fact that I know first hand this is how it works, it's also very logical when you think about it.
Why should (and how could) the Italian fiscal authorities make any difference based on where the car is located at any given moment?
 
I honestly think you're quite wrong on the car thing, at least applying UK law. I wouldn't have thought UK and Italy law were much different, becuase this is 6th directive stuff, but i dont know Italian law. I'm quite sure about the UK position

The physical location of the goods is critical to all this. I can't see your logic in asking why the fisc cares. It's fundamental! How can you say that the owner of a car/boat is "finalising the export" if he sells it inside the EU. That just makes no sense. The import happened when Mr X took the goods over the frontier and there is no export of them, nor any import by Mr Y. Import/export is a physical concept when you are talking about cars and boats.

It would also be strange tax policy to legislate as you say. It isn't wise politically to allow someone to TI then sell inside the EU, with no tax liability on him. He can dupe people, free of any penalty. A much better policy is to make the TI-er responsible for the VAT when the TI ends, to discourage people from making a business from legally importing, TI-ing, and selling to EU citizens who then get stuffed with primary tax liabilities

But this is boring. Shall we just disagree? :-) /forums/images/graemlins/grin.gif
 
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Regarding the CI I would like to know how many people who purchased their boat VAT free in the CI keep it permanently in the EU. If it visits for less than 18 months it is classified as a temporary import. If it stays longer VAT will become due as happened on a friends boat

[/ QUOTE ]

The "rule" appears to be 6 months from the CI - what that is legally based on I know not. Not heard of anyone getting a boat VAT bill for a long time - but motorhomes and cars getting impounded (when parked on street or off) still happens now and again.

My father has always ensured his boats have been VAT paid (or pre-VAT) and over the years (20 odd) he has had 2 or 3 visits from the Customs - but he used to spend a lot of time in France and I think they were equally interested as to whether he was a resident in France - whether this would have triggered an early VAT claim I dunno, he simply presented his boat papers which included solid evidence of VAT payment - which on the current boat is the now defunct letter / notice from the UK VAT man.

My boat is pre-VAT and demonstrably connected to the UK up to when I bought her in the UK.......I have not tested the paperwork with the French Customs. Yet - but when I do I will report back /forums/images/graemlins/grin.gif
 
[ QUOTE ]
But this is boring. Shall we just disagree?

[/ QUOTE ]Well, not a lot to disagree here, I also said that the topic is as boring as it gets... /forums/images/graemlins/wink.gif
Actually, I also can't see how we can disagree on the content of the matter: what I reported is a fact, not an opinion.
But just in case, I made a phone call to double check with a friend of mine who deals with car imports for a living, and he confirmed what I said. In fact, he told me that the location of the car is not even mentioned in the paperwork to be submitted for the import.
There's one thing he told me though, which made me see one possible source of misunderstanding.
If our previous Mr.X wants to import the car in the EU before selling it, of course he can. But that has nothing to see with the sale to Mr.Y, even if after importing it he would be able to sell it to Mr.Y (or anyone else) as an already nationalized car.
Otoh, if Mr.X just sells to Mr.Y (which as I understood was the case we were discussing), Mr.X has no liability whatsoever and the burden of import is entirely on Mr.Y shoulders.
Also, I don't see how Mr.X can dupe Mr.Y because of the above: we're talking about a used, mobile, registered good here - not a video camera or a notebook. If Mr.Y can't even see that the car has a foreign plate, he deserves to be duped, methink... /forums/images/graemlins/grin.gif
 
Well there must be differences between Itlay and the UK so far as cars are concerned. There are multilaterla treaties to which UK and Italy are signatories, regarding the practical aspects of car imports. But in the UK, for sure, Mr X is treated as the importer. And there is good policy in this

Back to boats, I remain 100% sure that Mr X is liable for the import VAT as he is the importer. 6th directive, and good policy to avoid duping. For the UK there is much complex law but the easiest quick check of this is HMRC's handbook, the 1Mb pdf here. See 13.10, 14.15.7, and 33, but especially 14.15.7. The jargon "diversion to free circulation" means ending of TI and VAT becoming due.
 
Fairenuff.
And thanks for the link, but all I can get is the following error message, when apparently the download is almost completed.
Does it work at your end? I tried it a few times, always with the same result.
HMRC.jpg
 
Forget my previous post.
Using "open" instead of "save", the pdf shows up regularly (and can subsequently be saved, either).
Weird behaviour indeed, but never mind.
 
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