Buying a Greek boat VAT - has not been payed.

[Ronnie79]

Hi,

e are about to buy a sailboat in Greece. It was previously a charter boat until 2008 when it was sold to a private person and under Swedish (also EU) flag. But this person never paid the VAT. We (also Swedish) wants to buy it from him. The boat is still in Greece and we intend to keep her there.

It has now been standing on land without any maintenance for over 10 years and is in quite poor condition pretty rather cheap. We will refit it and I guess we need to pay the VAT. Can I get in trouble because he never paid the VAT?

Does anyone know if it's best to pay it in Sweden or in Greece?
Will the VAT be based on my cheap purchase price now? I just don't want to risk that the VAT bill will be based on the sellers purchase price when he bought it from the charter company 2008, or even the price from 2001 when it was new. Or does it need to be valued by a third party?

Regards

Ronnie

 

[Tranona]

Welcome to the forum.

The responsibility for paying VAT is with the charter company that sold the boat. As it happens I bought a charter boat new in Greece in 2001 through a charter management company which then sold it to me after the charter contract ended in 2007. They invoiced me for the VAT which was based on the written down value (less than 50% of what it originally cost). A similar thing should have happened with the boat you are looking at but Greece being Greece such niceties are often ignored and there are many ex charter boats (mostly older pre 2003 when the law changed) that have never had VAT paid on them.

There is no mechanism for you to pay VAT unless the boat is owned by a VAT registered company who will charge you VAT based on your purchase price. If the seller is a private person then the transaction is between 2 private individuals and not subject to VAT. Even if you move it to Sweden you will not be required to pay VAT as both Greece and Sweden are in the EU and the boat is considered EU goods and has free circulation. You will just be missing the evidence of VAT payment which is what confirms free circulation. The question is whether anybody would ever check and the mechanisms for checking varies from state to state but generally speaking checks on EU boats moving around the EU are limited.

If you are keeping it in Greece and can register it as a Swedish boat I doubt whether anybody would bother about VAT evidence. You may want to avoid leaving the EU for example going to Turkey as you will may get checks on return.

I would be more concerned about a 20 year old boat sitting idle for 10 years. It will have to be very cheap as getting work done and buying gear in Greece is no longer easy or cheap. It is also enormously time consuming and not something that can be done from a distance. Also be aware that even if you are happy to live with the ambiguity when you come to sell buyers will be asking the same questions as you are asking now.

Hope this helps.

 

[Irish Rover]

If the OP is adamant to regularise the VAT situation one option would be to sail the boat out of EU waters and then declare it as an import on return.

 

[Tranona]

That is a possibility, but he would have to show that he bought the boat in Greece which may raise more issues than it solved!. In other states one might suggest he talked to customs for advice but that would be a risky strategy in Greece.

 

[Ronnie79]

Thanks a lot for your replies!

I want to pay the VAT in case we ever get asked for proof of VAT by customs if we want to go to other countries in the Med. And who knows, one day maybe Greece will start to check it more too. And I see it it's a pretty good opportunity to pay the VAT immediately after I buy her, before I get her refitted with a low value.

Somebody told me that I might be able to pay the VAT either in Sweden or Greece, as long as I get a proof that the EU VAT has been payed. 25% in Sweden instead of 24% in Greece but if that is the case it might be well worth paying the extra percent for the convenience. I will give the Swedish customs a call tomorrow and see what they have to say about it too.

And sailing anywhere is not an option before I buy new sails and so on.

Yes, over 10 years is a long time standing in the sun and wind... I'm calculating with having to replace the sails, bimini, sailcover. New batteries. Service the engine. Mold? And probably more?

 

[Dellquay13]

That is a possibility, but he would have to show that he bought the boat in Greece which may raise more issues than it solved!. In other states one might suggest he talked to customs for advice but that would be a risky strategy in Greece.

I shudder at the memory of talking to Greek port police and the tax dept in Kavala over 20 years ago. Truly a can of worms, I should have listened to the warnings from Greek friends to leave well alone, but I wanted to do things all above board like any unsuspecting Northern European would.

 

[vas]

I'd leave VAT (or ΦΠΑ in Greek) well alone and ignore the fact that it's not vat paid. Or, I'd try to tackle this issue in a normal country and not Greece. I'm Greek btw...

 

[Wansworth]

Best through an agent or gestoria as they are called in Spain,even so get a good one

 

[Irish Rover]

Thanks a lot for your replies!

I want to pay the VAT in case we ever get asked for proof of VAT by customs if we want to go to other countries in the Med. And who knows, one day maybe Greece will start to check it more too. And I see it it's a pretty good opportunity to pay the VAT immediately after I buy her, before I get her refitted with a low value.

Somebody told me that I might be able to pay the VAT either in Sweden or Greece, as long as I get a proof that the EU VAT has been payed. 25% in Sweden instead of 24% in Greece but if that is the case it might be well worth paying the extra percent for the convenience. I will give the Swedish customs a call tomorrow and see what they have to say about it too.

And sailing anywhere is not an option before I buy new sails and so on.

Yes, over 10 years is a long time standing in the sun and wind... I'm calculating with having to replace the sails, bimini, sailcover. New batteries. Service the engine. Mold? And probably more?

Best of luck. Personally I can't see how you can pay VAT now unless a vatable event occurs. Maybe you could persuade Greek or Swedish customs to regard your purchase as an import if you produce a contract/bill of sale showing the sale took place outside the EU.
As an aside, and in view of other comments, I should say I found the Greek customs officials I dealt with in Preveza very accommodating and pragmatic when I bought a VAT unpaid boat there in 2017.

 

[Refueler]

If Swedish registered - sitting in another EU location ??

I'd ignore the VAT bit ... especially as its a 20yr old boat ... wherever you sail to / from - its going to be seen as a 20yr old boat ... who's going to ask ? IMHO

 

[Tranona]

Thanks a lot for your replies!

I want to pay the VAT in case we ever get asked for proof of VAT by customs if we want to go to other countries in the Med. And who knows, one day maybe Greece will start to check it more too. And I see it it's a pretty good opportunity to pay the VAT immediately after I buy her, before I get her refitted with a low value.

Somebody told me that I might be able to pay the VAT either in Sweden or Greece, as long as I get a proof that the EU VAT has been payed. 25% in Sweden instead of 24% in Greece but if that is the case it might be well worth paying the extra percent for the convenience. I will give the Swedish customs a call tomorrow and see what they have to say about it too.

And sailing anywhere is not an option before I buy new sails and so on.

Yes, over 10 years is a long time standing in the sun and wind... I'm calculating with having to replace the sails, bimini, sailcover. New batteries. Service the engine. Mold? And probably more?

It is an EU boat so has freedom of circulation throughout the EU. You are highly unlikely to be asked for proof of payment of VAT sailing to other states in the EU and if you are then you say that the boat was bought in Greece and any VAT issues are the responsibility of Greece, being the state where you bought the boat. You will be buying the boat from a private person which is not a "chargeable event. Make sure you have a clear Bill of Sale covering the transfer of title to you in Greece.

For what it is worth there are thousands of boats in the UK that do not have any proof of VAT payment and for the 30 years of our membership of the single market such boats travelled freely around the EU without any difficulty.

Just to emphasise VAT is a tax on transactions and sales between private individuals are not VAT abl. The only was a private individual can pay VAT is if the boat is imported from outside the EU which is a chargeable ev ent and you pay direct to customs on entry. This does not apply to your situation - so just forget about it.

 

[Baggywrinkle]

I recently sold a British registered boat in the EU and this is what happened - countries involved were Croatia (location of boat), UK (registration) and Slovenia (new owner and intended destination) ... and I am dual citizen UK/Germany.

History is I bought the boat directly from a charter company without VAT paid before Croatia joined the EU and exported it immediately to avoid Croatian VAT.

As an EU citizen I could then bring it back into Croatia under TA (Temporary Admission) and pay no VAT - the boat was then kept in Croatia on successive TA paperwork until Croatia joined the EU.

When Croatia joined the EU I was able to get paperwork which effectively showed "VAT Paid" in Croatia. I didn't pay VAT because of the EU accession rules which stipulate that boats over 8 years old and present in the country at the date of accession are deemed "VAT paid". I paid a small fee for a Croatian company to obtain the paperwork.

No authority in Croatia has ever asked to see this except the Marina got a copy as they demanded my paperwork when Croatia joined the EU. I guess this was forwarded to customs to catch the boats younger than 8 years which had avoided paying VAT on accession.

Brexit happened and I gained German citizenship.

When I came to sell the boat, the Croatian and the Slovenian authorities demanded that the new owner pay VAT on the boat as it was "U.K. registered" - this is wrong but they wouldn't back down.

To save the sale, the broker suggested I either register the boat in Germany and then no-one would ask any questions, or I could pay a Croatian spedition company to take my Croatian paperwork and produce an EU document stating the vessel was EU goods and in free circulation. I took the spedition route and for about €80 the problem went away.

It seems the fact that it was UK registered triggered both the Slovenien and Croatian authorities to demand VAT paid status - things may have settled down now as it was about a year ago.

If the boat is registered in an EU country, and already in private ownership to an EU citizen or resident, and is being transferred in a private sale to another EU citizen or resident then there will be little interest from the authorities.

 

[Ronnie79]

Thanks, all!

Maybe it's unnecessary, maybe I have read to many horror stories and maybe I would be better of saving me the hassle But on the other hand, to have an EU VAT would give me some peace of mind in case I want to go to Turkey or somewhere. Otherwise I might regret it later when it's (hopefully) refitted and worth more, and a VAT Certificate might also raise the value when the day comes to upgrade

I rang the Swedish customs today and they wouldn't accept any VAT payment from me as the boat is abroad and couldn't be inspected in case they wanted to. Has to be done in Greece then, or maybe another EU country if there's any that doesn't require the boat to be in their waters? And the VAT bill better be based on my purchase price, otherwise it will not be as fun...

 

[Tranona]

Thanks, all!

Maybe it's unnecessary, maybe I have read to many horror stories and maybe I would be better of saving me the hassle But on the other hand, to have an EU VAT would give me some peace of mind in case I want to go to Turkey or somewhere. Otherwise I might regret it later when it's (hopefully) refitted and worth more, and a VAT Certificate might also raise the value when the day comes to upgrade

I rang the Swedish customs today and they wouldn't accept any VAT payment from me as the boat is abroad and couldn't be inspected in case they wanted to. Has to be done in Greece then, or maybe another EU country if there's any that doesn't require the boat to be in their waters? And the VAT bill better be based on my purchase price, otherwise it will not be as fun...

You still ,don't seem to get it. You cannot just walk in to a customs office and pay VAT. You can only do that if you are importing a boat that you bought outside the EU and you clearly are not doing that. VAT is a tax on transactions NOT assets (a boat) and is collected by the seller who accounts for it in his VAT accounts. You are buying a boat just like you might buy a used bicycle from a private individual who cannot charge you VAT.

So not only is it unnecessary it is impossible to fo what you want to. You will be no different from thousands of other boat owners who have no record of VAT payment. You will have a Bill of Sale that says you bought the boat in Greece and Greek customs have no way of knowing whether VAT has been paod or not. If you use the Greek system for the transaction you will need to get the Bos stamped by the Port Police to make it legal and they do not ask anything about VAT.

As I said right at the beginning the person responsible for accounting for the VAT was the charter company who sold the boat to a private person, not the buyer. you will have no responsibility to pay it.

 

[vas]

seconding what Tranona typed above, if however you'd like to get some bureau to do the paperwork on your behalf (I'd urge you to do so!) then maybe ask them as well and see what they say (pretty sure it's going to be what is stated above)
If you want the details of an office I used when buying my boat back in 11, I can post them, they are in Athens and basically deal with boat related transactions. They speak EN.
Not at all related, just a happy customer, have to check they are still in business

 

[Refueler]

I can only think that the occasion an over-zealous customs guy would bother to get of his bum to worry about the above would be so rare as to be near zero.
How many people sail into harbour and wave a VAT receipt ?? I have a folder with reg'n .. radio licence ... my ID .... that's it. If I am going outside of EU (rare) - then I have a 'Crew List' which also suffices for re-entry.
How often have I been asked for any ? Once ... when my boat was still UK reg'd and Latvia despite beig in EU by then - Immigration were still playing the nationalism game ... but they were only interested in ID's .... customs of course had no interest ...

To OP ... why not just sit down ... forget about VAT - if its a new boat - OK then maybe a chance of being asked about ... but its a 20yr old boat and everyone will assume all ok. Why give yourself a headache and hassle ???

 

[Ronnie79]

I hear you And I understand that VAT is normally only paid when new or importing.

The Swedish customs can help me to get a proof of VAT, but only if I sail it to Sweden.
There are also agancies who offer this service online, normal importation but also to EU flagged vessels that lack proof that the VAT has been paid, found one in Holland.

But as you say, it seems to be very very rare that someone askes for it... Maybe not worth it...

I think it would be logical that the charter company (with a valid VAT number) is the only one obligated to pay the VAT (they are the one who bought the boat new with a VAT exception) - But when I talked to the harbor office in Pireus, they told me that it was the buyer first buyer that is obligated to pay the VAT and not the selling charter company. Sounds strange to me, can this really be correct?
And even if so, it's 15 years after the charter company sold it to the current owner, wouldn't it be prescribed by now?
And if there's still a VAT debt, can it ever be attached to the boat somehow or to me as a third owner?

I know - I'm silly and it's not going to happen, but maybe you can comfort me a bit In my wildest nightmare scenario, a few years from now and the boat refitted: A routinecheck in Greece or when entering from a trip to Turkey, they check their registry and find a huge VAT debt attached to my boat since the charter company sold it, they confiscate my boat until I pay it all. Is there is any chance, even the slightest, that this nightmare can become reality?

 

[vas]

they check their registry and find a huge VAT debt attached to my boat since the charter company sold it, they confiscate my boat until I pay it all.

you do like sci-fi don't you?
Port police check a registry? that'll be the day
A swedish reg boat and Greek port authorities check for VAT paid status? HOW?

from my experience when I'm in a bay anchored and there are another dozen boats that are either charter or foreign flagged, they'll come straight to me (run a greek flag). it's bloody annoying!

cheers
V.

 

[Tranona]

Whole it is true in one sense that the buyer pays in that part of the money he pays is to cover the tax, he does not have to account for it. That is the obligation of the seller who is VAT registered and is effectively a tax collector for the government. He is responsible for accounting for the VAT. He enters that as a receipt in his VAT account, then adds up all the VAT receipts, deducts all the VAT he has paid to his suppliers and pays the difference to the government. The only connection between the VAT on the boat is the invoice which shows it as a separate line. There is no legal obligation to keep that receipt, but many EU states require it to register a boat, but that is nothing to do with VAT or the EU, just a state rule.

As for your boat being at risk - yes, theoretically but only if customs are investigating irregularities of accounting for VAT at the charter company that involved your boat. However there is only an obligation to keep records for 6 or 7 years (depending on state) so the chances of that happening are zero. I expect the charter company itself and certainly its records are long gone. You will be what is known in UK law as a "Good Faith Buyer" as your Bill of Sale stamped by the Port Police will declare (from the seller) that the boat is free of any charges and sole title is passed to you.

So, make sure you get a proper Bill of Sale. It may well be worth using a lawyer (as vas suggested) who is expert in boat transactions to draw up the contract and do the Bill of Sale. If you are buying through a broker he should do this for you.

Your Bill of Sale is your key document as it gives title to the boat and shows that you bought it legally in Greece. You can use it to register your boat in Greece which I beleve you can do as an EU citizen or in Sweden.

 

[Donheist]

it seems to me the worst that can happen is one day you might be asked to pay VAT. Eg if you go to Turkey and back and “reimport the boat”. I bought a boat with no proof of vat. I kept the liability in my account for 5 years then stopped because of what everyone has said especially tranona who is an expert in this. I also kept the receipts for all the big stuff I’ve spent (on which vat has been paid for parts and Labour at yards) since. If clobbered at some future point I’d argue That could reasonably be deducted from whatever valuation is applied to future “done-up” boat. Either they can take buy price (you are no worse off) or value add price (less your receipts). Either way, I’d spend your money fixing the boat up and sailing.