Buying a boat in Turkey?

[Longshanks]

I'm considering buying a yacht that's currently based in Turkey. British Reg. and owned, VAT paid. Is it just a matter of doing the deal with the UK resident owner in the normal way, as if the boat was based here, or are there bureacratic pitfalls I need to be aware of regarding the Turkish authorities, VAT liability as outside EU, etc? Does anyone have any web links that explain the process? Thanks guys.

 

[Sailfree]

My understanding is that if the sale takes place outside the EU VAT is due on your entry into the EU on the secondhand value of the boat.

The fact that it was originally VAT paid in the UK is irrelevant.

If the sale takes place in the UK then no further VAT is due.

If I understand this correctly you need the person to fly back to the UK and and sell you the boat with a receipt showing the sellers UK address and the VAT question will not arise.

I am sure the legal beavers can get going on this but I believe it is legal to sell in one country goods that are left in another and the sale takes place where the money and contract of sale changes hands. I would insist on the original bill of sale showing the VAT paid being an essential document and passing to you in the sale. (Note the VAT could have been reclaimed by the original buyer if the boat was chartered or exported IIRC within 6 months but the owner still keeps the orioginal receipt showing VAT paid!!)

Of course you could ask your local VAT office and wait for them to send you a VAT demand.

From many posts on here the impression I get is that providing you have the original receipt for VAT paid you are unlikely to ever get an investigation into the resale trail. However if many nearly new expensive boats turn up with new owners I think the Inland revenue will start investigating. I doubt whether say the sale of a 5yr old boat between 2 british nationals would come up on the IR's Radar wherever the boat was.

Remember the only legal advice you can rely on is one that you pay for so all the above is what I have dreamed if you were to bring the boat back to the EU and not to be relied on!

If you were to keep it in Turkey I am sure they have their own local laws to squeeze some mmoney out of you.

 

[Tranona]

As Sailfree says this is a tricky one. A straight reading of the rules (on the RYA site) would say that the only person who can re-import the boat into the EU without paying VAT is the person who exported it. Sales between private EU residents within the EU do not trigger VAT. Therefore the first thing to establish is whether the vendor is EU resident. If he is not then a VAT free transaction (if the boat is coming into the EU) is not possible.

The RYA site does not go into sufficient detail to enable one to determine where a sale takes place, but there will be rules somewhere in HMRC. It would seem to me that the easiest way is for the current owner to move the boat to Greece, making sure he clears out of Turkey and into Greece and gets a cruising log, then do the transaction in Greece, perhaps with the help of a notary to certify the documents.

In practical terms the chances of being asked for proof are very small, and only likely if officials have suspicions. A Bill of Sale between 2 EU residents within the EU is what is normally needed. An original invoice showiung VAT is a bonus.

Good luck!

 

[mikehibb]

I might be wrong, but if the boat is Uk (therefore deemed EU) VAT paid then in order to maintain its VAT status then the transaction needs to be done in EU, not specifically UK. So you pop across to Kos to do the deed.(assuming that you are somewhere near Bodrum/Marmaris.

You might get much better infromation on the Live Aboard section, many people in there that are based in Turkey.
I bought my boat in Turkey, but it was not VAt paid so did slightly different scenario for me.
REgarding Keeping it in Turkey.
You can keep it in turkish water for up to 5 years at a time, need to do entry via an official port (plenty of them) then need transit log renewable annualy for up to 5 years, then you must take boat out, but nothing to stop you bringing it back in again next day.
Allegedly it has been known for people to tell the authorities that they are taking the boat out to greek waters for example, anchor up for a night and pop back in next day and say "hello I am back".
Not sure what the entry fee is, as I had new 5 year entry as condition of my contract.
Just renewed by transit log, cost was labout £100 (even less) took half a day to do, got transit log book from marina, got about 8 passport photos ( you will need most of them) got the log signed at port police in Yalikavak (my marina) then popped down to bodrum (official port for our region) in the car not in the boat, get a few stamps and give some photos, then back to home marina police and they stamp it again.
Also you will need copies of passport ( I did NOT need notorised copies)
I did have copy of Marina birth contract, SSR and Insurance docs, they only looked at the SSR.
You will need SSR, but only 25 quid online.

Think that was about it.

The Turks have certain procedures to follow, but if you have all documentation correct it is not a problem at all, cost was very reasonable and they even smile and chat with you. I have found that they like to make it easy for you to stay there and spend your money in Turkey, rather than spend it some where else.
One thing, just remembered there is a new 11 ton rule, so if you are more then there is another fee to pay.
Please check out the posts in Live aboard forum for details about this. ( I am a lot less so did not pay too much attention)

Finally good luck, you will love it in Turkey.

 

[Marsupial]

Very tricky, the letter of the law states the deal must be done in the UK with the exporter. This also means that the correct paper MUST have been sent in when the boat left . . . . .

I am no judge but I would insist on al the i's be dotted and tees be crossed on this one.

Seek the advice of HM Customs better safe than skint.

 

[Tranona]

Why do you think it has to be done in the UK? It is an EU issue and in theory the rules are the same wherever you are within the EU. I bought my German built boat in Greece from a Greek dealer, and paid VAT in Greece. I have a Greek Bill of Sale and receipt for the VAT from the dealer. Registered in the UK but never been there!

Nothing to do with HMRC if the boat is purchased in Greece. The only things that matter is that the vendor and purchaser are EU residents and the boat is in the EU when the transaction takes place.

 

[Longshanks]

Thanks guys. Some useful info here. For clarification, the owner is resident in the UK, though keeps his boat in Turkey. It was bought new by him in the '90s and I'm sure the original VAT receipt is available. So the deal would be done by two UK residents, on UK soil, it's just that the boat itself is not at the moment in the EU (but has been except for the last year or so). I tried calling the RYA but nobody was available today it seems.

One question..how would HMRC know where the boat was when she was sold?? How would it even come to their attention?? That's not at all clear to me at all, and presumably the same would apply to the Greek and other EU authorities. So in reality is the VAT issue just theoretical?

 

[Tranona]

Not sure you will get much joy from the RYA as they seem terrified of giving any advice because HMRC are so unhelpful. I think you are pretty safe if all is done in the UK - as you say, there is no reason for any authorities to question you. You do not say where you intend to keep the boat. If in Turkey it is currently irrelevant whether you have paid VAT, although this may change if Turkey joiuns the EU - in which case precedent suggests that boats in Turkey will be deemed VAT paid on accession. The potential problem will only arise if you bring it back into the EU now. Therefore belt and braces suggests better that the boat is effectively re-imported by the original owner and evidence obtained that it is in the EU when you buy it.

 

[sighmoon]

If the boat is an older one, you might be OK anyway:

# Pleasure yachts built before 1985, and in EU waters on 31st December 1992 are treated as VAT paid. You will need to have evidence that the yacht was in EU waters on this date.

 

[Moscowman100]

Recently been through the process. The posters above are correct - the sale must take place in the EU (anywhere) otherwise the boat will loose its VAT paid status and you would need to repay VAT on entry to the EU. Sail over to Rhodes or Kos and do the deal there, making sure that you get a local witness.
Re Turkish paperwork - pay an agent, at least the first time, as the process is protracted and involves running around several offices generally scattered all over the port. ICC, Insurance, radio license; SSR all required. Thereafter annual renewal until 5 years then a quick booze cruise over to Greece!

 

[Longshanks]

Thing is...what constitutes a "sale" ? If the owner and myself are both currently resident in the UK, do we really have to fly to Turkey, move the boat to Greece and then sign a contract on Greek soil? Seems illogical! But if that's what needed...

To answer some of the other comments, the boat is post-1985, and ultimately I may bring it back to the UK, and certainly to Greece. It was bought new in the UK, VAT paid, used in the UK for some years, then sailed to the Med by the current owner.

 

[Longshanks]

Just another question: are there any taxes or complications related to the Turkish authorities if the boat changed ownership whilst berthed there? Or is it just a matter of renewing (or transferring) the 5-year permit? Would this be issued to a new owner anyway without sailing out of Turkish waters?

 

[Tranona]

Not illogical at all. The boat has been "exported" from the EU and therefore is subject to VAT if re-imported by anybody other than the person who exported it. There is an HMRC help unit - link on the RYA site who should be able to advise on the detailed rules of the sale, which should be the same everywhere in the EU.

In practice you are unlikely ever to be challenged, but if you are, particularly in another EU state it would be better to squeaky clean, and if that means doing the deal in Greece the cost is small compared with the potential penalty. The vendor should be prepared to cover the cost as his boat falls in value otherwise.

 

[Heckler]

I kow of someone who actually sailed a boat from Turkey to Greece to do the deal, the owner was then seen to be selling the boat in the EU to another EU national
Stu

 

[claudio]

I totally agree with Tranona. Sail to Greece, get a marina receipt as evidence and do the deal there. If you can't prove that the boat was in the EU when it was sold, you will be liable for VAT as it is deemed to be exported. It is irrelevant where the owner lives or where he is based, it's the location of the boat that is important.