Buying a boat in Spain

[crown22]

Apologies if this is covered elsewhere.The seller tells me his boat was in Spain before 31st December 2020 but has no proof that
VAT has ever been paid on his boat.Am I right to think that there will be a liability for VAT after the 18 months Temporary Importation period ?
Thanks

 

[westernman]

Does he have proof it was in Spain on that magic day?
How is the boat registered?
Will you be keeping it on the same register? Some registries require proof of VAT in order to be able to register.
Is the owner a EU resident and was he on the 31st December 2020?
Are you resident in the UK? Do you have a UK passport?

 

[crown22]

Hi the boat was in a marina with invoices to show that the boat was there on 31st December 2020.
The boat is on the SSR and the intention is to leave it on.The owner is a UK resident.I am UK resident with
UK passport.The seller says the boat was supplied new in 1983 which seems reasonable given the make and
model of the boat but he does not have the original invoice from the supplier.Thanks for your help.

 

[Graham376]

I'm not sure if EU have any "deemed paid" or "not due" exemption for VAT on an old boat already in circulation before 31/12/20. As I see it, if you are asked to prove VAT paid status and can't, this leaves you in the position of either paying it or, leaving EU for a day or two at the end of every 18 months and starting the clock again on return. I don't know how keen the Spanish are on inspecting paperwork.

 

[Tranona]

Hi the boat was in a marina with invoices to show that the boat was there on 31st December 2020.
The boat is on the SSR and the intention is to leave it on.The owner is a UK resident.I am UK resident with
UK passport.The seller says the boat was supplied new in 1983 which seems reasonable given the make and
model of the boat but he does not have the original invoice from the supplier.Thanks for your help.

The current advice that this is sufficient to prove it is EU VAT paid as defined in the Withdrawal Agreement and can circulate freely in the EU, including being sold as VAT paid. It is early days so is not clear yet whether all states (or more particularly officials) will accept this, nor whether potential buyers will be happy when you come to sell. This issue has already been raised and clarified at EU level in Croatia and Greece (threads on the Liveaboard forum describing the process).

So you are pretty safe buying it to keep in the EU, but may have difficulty selling it later and will of course have to pay VAT if you bring it to the UK. Registration is irrelevant, and you can re-register it. Just make sure yu get a UK type Bill of Sale, either MCA or RYA and as much back history as you can.

 

[Graham376]

The current advice that this is sufficient to prove it is EU VAT paid as defined in the Withdrawal Agreement and can circulate freely in the EU, including being sold as VAT paid.

My understanding is that the withdrawal agreement stated any VAT paid boat within the EU on 31/12 would keep it's status. Only snag is that it is still necessary to be able to prove VAT was paid, just being there doesn't prove that. DTP will usually solve the problem.

 

[westernman]

I have kept my boat in Spain for the last 7 years or so. No interest from any one at any time for VAT status.
Registration document and passports have been checked a couple of times - but even that not too often.

Of course to check in to any marina - even for just one night, you need to present the registration document and sometimes proof of third party insurance cover.

PS. UK Part I registered.

 

[Graham376]

I've never had to prove VAT status when boarded or in marinas but, did have to do in December '20. As we were out of the country and the boat was on a mooring, I needed proof it was in EU on 31/12. Policia Maritima agreed to certify it's presence but I had to email copies of passports, registration, insurance, residence certificates and T2L to show it was in free movement. In January, they handed us a letter confirming its presence along with date and time stamped photographs.

 

[Koeketiene]

I'm not sure if EU have any "deemed paid" or "not due" exemption for VAT on an old boat already in circulation before 31/12/20.

IIRC, VAT deemed paid applies to vessels sold in the EU <1984.
When I registered my current boat in Belgium, I received a VAT deemed paid certificate from Belgian Douane as the boat was first sold in the EU in 1977.
Pretty sure this is a EU-wide thing.

 

[PlanB]

There's a load of stuff on the "Liveaboard Link" about VAT issues.
Just for interest, a few years back, Aduana in Andalucia took a great interest in the VAT status of foreign registered boats during one of the periodic fund raising purges.

 

[Tranona]

IIRC, VAT deemed paid applies to vessels sold in the EU <1984.
When I registered my current boat in Belgium, I received a VAT deemed paid certificate from Belgian Douane as the boat was first sold in the EU in 1977.
Pretty sure this is a EU-wide thing.

Regrettably more complex than that. It starts with the date of accession into the EU which for most states was 1992 and for VAT purposes, boats that were more than 8 years old and in the EU on accession date were "deemed VAT paid". some states had a system of confirming VAT paid status usually through their compulsory registration system or as in your case their customs set up a system of certification. Inevitably the UK was different in that not having any system of recognising each individual boat and nearly 20 years of a VAT system where responsibility of accounting for VAT was with the trader and not the buyer and no method of linking VAT payment to an individual item except through the commercial invoice was not able to put in place any system. They did try for a while based on a declaration that the boat was in the UK, but quickly realised that the very nature of VAT being a tax on transactions rather than a specific asset it was quite possible for a boat to be involved in a subsequent transaction that resulted in VAT becoming payable again. so they stopped that, although recently have started to issue certification again. They have also agreed (when we were in the EU) to issuing T2L forms which although not evidence of VAT payment per se were confirmation that the boat had free movement.

Of course there have been 2 more tranches of accession so the start date for the "8 years before" will be different for those states. for most not a big issue because of the small number of boats in those states, except the most recent "Croatia" which handled the problem in its own idiosyncratic way, although ultimately many people benefitted from it.

So, the answer is, no, not all states handle(d) it in the same way, although the rules were intended to be EU wide. Just another problem of trying to impose a common set of rules on a large number of states with their own established legal systems.

 

[Buck Turgidson]

My old girl was deemed VAT paid when I bought her with a notarised letter for 1992 or whatever that date was. I have a letter from the Harbourmaster stating she was in Valencia on 31-12-20. That hopefully is good enough but I guess time will tell. She was built in the UK in 71. If I ever decide to sell her I could do it in the EU or bring her back to the UK first.

 

[Tranona]

My old girl was deemed VAT paid when I bought her with a notarised letter for 1992 or whatever that date was. I have a letter from the Harbourmaster stating she was in Valencia on 31-12-20. That hopefully is good enough but I guess time will tell. She was built in the UK in 71. If I ever decide to sell her I could do it in the EU or bring her back to the UK first.

If you brought it back to the UK you would have to pay VAT (unless you exported it from the UK). As the rules stand from later this year it would also require a post construction assessment to meet the latest standards.

 

[Buck Turgidson]

If you brought it back to the UK you would have to pay VAT (unless you exported it from the UK). As the rules stand from later this year it would also require a post construction assessment to meet the latest standards.

I exported it. Or more accurately I sailed from one EU country to another. Not technically an export.

 

[Tranona]

I exported it. Or more accurately I sailed from one EU country to another. Not technically an export.

OK but now considered as an "export" -funny things words and how their meanings change over time. So you should be eligible to claim returned goods relief