Buying a Greek boat VAT - has not been payed.

[jms28]

Found this post and am super keen to hear the outcome of this: how did the OP / @Ronnie79 proceed in this in the end? I am in a similar situation:

• Keen to buy a boat that has no proof of VAT status and is located in Greece
• Boat was purchased through a company in early 1990s in a country that, back then, was not yet in the EU (orig. receipt not available)
• Boat was transferred to Greece few years after that in the mid-1990s
• Country became part of EU in early-2000s, so vessel is now de-facto EU-flagged
• But flag patent was never updated, so still states company name as owner today
• But Bill of Sale from company to private individual (= seller) available (I know, it's ridicilous )
• Several transit logs etc. available, VAT apparently never an issue

Thoughts? Situation same as the OP? Initial research makes me sweat, but this thread gives me some hope. Especially the argument from @Tranona that there actually is no chargeable event for VAT in private transactions. I know this might make @Tranona bang his head on the keyboard, but I have to challenge this one more time: is that really the case? This Q&A is one amongst maaaany resources I found that make it seem as if VAT is indeed chargeable on private yacht transaction too.

In my case, there has to be a way as I really want to buy this boat. At the same time, I'm keen not to refit it over the next few years and then suddenly be held liable to pay a fortune by a Greek customs officer who suddenly decides to make my life miserable...

Thanks so much in advance!

 

[Tranona]

This Q&A is one

I have read that and it makes no sense at all - sorry. VAT can only be charged by a VAT registered entity. When a boat is sold to a private consumer by typically a dealer or builder VAT is charged and accounted for by the seller. any subsequent transaction between private individuals is not a "chargeable event" and therefore no VAT payable. The only way a boat loses that "VAT paid " status is if it leaves the EU and changes ownership outside the EU. If it is subsequently imported into the EU VAT will be payable if the importer is an EU resident. Non residents can make use of TA rules unless they intend selling the boat in the EU in which case they have to import it and pay VAT.

Every point in that broker's puff is as far as I can see totally wrong. If this was given to you by the broker as relating to the boat you are looking at find another broker.

The boat you are looking at despite its dodgy history would likely be considered VAT paid when it was imported into Greece. Greek systems and records at that time were chaotic (what's new!) and even if VAT was not paid then there is no way of finding out one way or another.. There is no such thing as "EU flagged" and flag state of vessel has nothing to do with EU VAT. Equally citizenship and residence of buyer or seller has no impact on VAT for a boat being sold between individuals within the EU. That means you if you are a UK citizen or resident can own an EU VAT paid boat and register it in the UK. Do not confuse this with the Greek system of transit logs which treats third country flagged boats including UK differently from those registered in EU states. This restricts freedom of movement which VAT paid status gives them the right and is currently being challenged in Brussels.

Upshot. No VAT is payable by you if you buy it. If you register it on the UK register (SSR if you are UK resident, Part 1 if not) be prepared for restrictions on your transit log . The Cruising Association can advise on this issue.

Not a very satisfactory situation, but just goes with the territory of buying an old boat in a country that has a chaotic system of controls over leisure boating!

Edit

On reflection I now realise that the link you gave is likely to refer to boats on their books that are NOT VAT paid, most commonly ex charter boats and is broadly correct. These transactions are not between private individuals but from a VAT registered entity (the charter operator) either to another VAT registered entity or a private individual. If the buyer is an EU resident VAT is payable. If a non EU resident then VAT is not payable unless the intention is to keep the boat in the EU and enjoy freedom of circulation of the boat within the EU. If the intention is to move the boat out of the EU then VAT is not payable (even for an EU resident). However only a non resident can then keep the boat temporarily in the EU under TA rules. Many ex charter boats are bought by non residents, historically N Americans and Australasians but now UK and Russians in this way.

However, none of this is relevant to the boat you are looking at which is just an old boat with a chequered history. it is probably unlikely that VAT was ever paid as it pre dates the current VAT regime and there is no way of proving any payment or otherwise, so unlikely there will ever be any questions raised. You have your Bill of Sale and evidence of continued unchallenged use in the EU, so buy it if it is what you want and enjoy.

 

[Refueler]

Just to make a point ....

VAT is not same in all EU states .... the % charged differes across states and EU VAT rate is only a guideline - therefore "Flag State" does have a bearing on the VAT amount charged.

"Flag State" being the term used for the Nationality of Registry used ... just to quiet those who keep saying Flag has nothing to do with registry. If that were true - then fly any old flag regardless of which registry you use ... Try that here and Comity would be void.

 

[Irish Rover]

Just to make a point ....

VAT is not same in all EU states .... the % charged differes across states and EU VAT rate is only a guideline - therefore "Flag State" does have a bearing on the VAT amount charged.

"Flag State" being the term used for the Nationality of Registry used ... just to quiet those who keep saying Flag has nothing to do with registry. If that were true - then fly any old flag regardless of which registry you use ... Try that here and Comity would be void.

Could you perhaps direct us to a few of the posts where people "keep saying Flag has nothing to do with registry".

 

[Tranona]

Just to make a point ....

VAT is not same in all EU states .... the % charged differes across states and EU VAT rate is only a guideline - therefore "Flag State" does have a bearing on the VAT amount charged.

"Flag State" being the term used for the Nationality of Registry used ... just to quiet those who keep saying Flag has nothing to do with registry. If that were true - then fly any old flag regardless of which registry you use ... Try that here and Comity would be void.

While the rates of vAT vary across the EU the basic rules are the same. VAT payment in any state allows free circulation of the boat throughout the EU. Basic tenet of the single market.

Knickers in the twist again about registration. Nobody has said what you claim. However there is no connection between flag state registration and VAT status. However to clarify, many states do link the 2 in their domestic registration regime, where boats are registered with evidence of VAT payment. Registration in this way usually meets the requirements of flag state registration as evidence when moving outside domestic waters. The 2 functions are quite separate, just as in the UK Part 1 has 2 functions, register of title and flag state, but SSR only has one - flag state. Neither are a register of VAT status as in many EU states.

Hope it is clear now.

 

[Refueler]

While the rates of vAT vary across the EU the basic rules are the same. VAT payment in any state allows free circulation of the boat throughout the EU. Basic tenet of the single market.

Knickers in the twist again about registration. Nobody has said what you claim. However there is no connection between flag state registration and VAT status. However to clarify, many states do link the 2 in their domestic registration regime, where boats are registered with evidence of VAT payment. Registration in this way usually meets the requirements of flag state registration as evidence when moving outside domestic waters. The 2 functions are quite separate, just as in the UK Part 1 has 2 functions, register of title and flag state, but SSR only has one - flag state. Neither are a register of VAT status as in many EU states.

Hope it is clear now.

My comment about Flag / VAT and Registration is because I am tired of the same old comment from same old people that there is no connection ... of Flag and Registration ....

I agree with you that officially VAT is not a requ't of Registration - but try register if boat is not VAT cleared or accepted in that state.

Second basic EU is to have single market - but they are also at pain to maintain the facade of separate states control ... great until a state decides to not toe the line - then all sorts of funding pressures are used to bring back to heel. Think I'm joking ? I see it often in Baltics.

I have also seen the argument between officials here and owner who's boat would be clear based on age / year entry etc. - but as with many officialdoms of some states - interpretation comes down to individuals.

I am not disagreeing and no need for the 'lecture' ... just pointing out what can ensue.

 

[Irish Rover]

My comment about Flag / VAT and Registration is because I am tired of the same old comment from same old people that there is no connection ... of Flag and Registration ....

I agree with you that officially VAT is not a requ't of Registration - but try register if boat is not VAT cleared or accepted in that state.

Second basic EU is to have single market - but they are also at pain to maintain the facade of separate states control ... great until a state decides to not toe the line - then all sorts of funding pressures are used to bring back to heel. Think I'm joking ? I see it often in Baltics.

I have also seen the argument between officials here and owner who's boat would be clear based on age / year entry etc. - but as with many officialdoms of some states - interpretation comes down to individuals.

I am not disagreeing and no need for the 'lecture' ... just pointing out what can ensue.

I registered a boat in Ireland which was not VAT paid. Once I explained the situation to the nice people in customs there was no issue. The registration certificate was endorsed VAT NOT PAID.

 

[Refueler]

I registered a boat in Ireland which was not VAT paid. Once I explained the situation to the nice people in customs there was no issue. The registration certificate was endorsed VAT NOT PAID.

That's interesting ... never heard of that before.

But isn't your boat kept in Turkey ? So in reality - Irish never actually physically see the boat in Irish Waters ?

My latest boat - I had to produce Bill of Sale for Swedish application which needed to be Private Individual .... bit of a twist there as I bought it as Private on Behalf of my Company ....

 

[Irish Rover]

That's interesting ... never heard of that before.

But isn't your boat kept in Turkey ? So in reality - Irish never actually physically see the boat in Irish Waters ?

My latest boat - I had to produce Bill of Sale for Swedish application which needed to be Private Individual .... bit of a twist there as I bought it as Private on Behalf of my Company ....

Yes the boat was being kept in Türkiye and it was on that basis is was able to register in Ireland without VAT being paid.
Posters come on the forum looking for advice and I think it's important other individual posters don't mislead them by confusing a personal experience they may have had themselves with rules or practices which are common across all EU states.

 

[Tranona]

My comment about Flag / VAT and Registration is because I am tired of the same old comment from same old people that there is no connection ... of Flag and Registration ....

Maybe I am thick - what's new, but I really don't understand this. Flag state is the term used internationally for where the boat is registered so the 2 are intimately connected. An individual state may also have a registration requirement for other purposes - indeed most EU states do because of their system of control over the activities of individuals requires it. Their registration often requires proof of VAT payment as well as other requirements. However that is nothing to do with the EU in relation to VAT which gives the boat freedom of circulation in the single market.

Clearly having documentary proof of VAT payment through the state registration document helps in this respect. It is that which the boat the OP is considering lacks because of its age and history plus being originally sold in a non EU state and moved to one in the EU that did not at the time have any system of recording VAT payments. Not dissimilar from many older UK boats that were built before VAT came into being or later before the Lisbon Treaty which created the single market and common VAT regime. Such boats acquired VAT paid "status" through the terms of Accession treaty. Many other states documented that process for individual boats but the UK did not relying on secondary evidence to meet the requirements of the treaty for individual boats.

Broadly speaking this "messy" system worked fine for the subsequent 30 odd years and in some ways Brexit made it easier by having a clear definition of what a UK or EU VAT paid boat is. Within the EU though they still have a pool of boats like this one which does not fit - although does not seem to stop it being used in Greece by the owners.

 

[westernman]

Found this post and am super keen to hear the outcome of this: how did the OP / @Ronnie79 proceed in this in the end? I am in a similar situation:

• Keen to buy a boat that has no proof of VAT status and is located in Greece
• Boat was purchased through a company in early 1990s in a country that, back then, was not yet in the EU (orig. receipt not available)
• Boat was transferred to Greece few years after that in the mid-1990s
• Country became part of EU in early-2000s, so vessel is now de-facto EU-flagged
• But flag patent was never updated, so still states company name as owner today
• But Bill of Sale from company to private individual (= seller) available (I know, it's ridicilous )
• Several transit logs etc. available, VAT apparently never an issue

Thoughts? Situation same as the OP? Initial research makes me sweat, but this thread gives me some hope. Especially the argument from @Tranona that there actually is no chargeable event for VAT in private transactions. I know this might make @Tranona bang his head on the keyboard, but I have to challenge this one more time: is that really the case? This Q&A is one amongst maaaany resources I found that make it seem as if VAT is indeed chargeable on private yacht transaction too.

In my case, there has to be a way as I really want to buy this boat. At the same time, I'm keen not to refit it over the next few years and then suddenly be held liable to pay a fortune by a Greek customs officer who suddenly decides to make my life miserable...

Thanks so much in advance!

Where is it registered?

1) The bill of sale is your evidence that the private individual is the owner. You are buying it from him. Therefore no VAT can be due and indeed there is no way to pay it. (As Tranona has said until he is blue in the face).

2) The fact it is still registered to some one who is not the owner is interesting. Is it still valid or is it expired? However, to register it in Greece as a private owner (and many other EU countries) you need proof of VAT is paid. But there is none. But see (1).

3) You could register it on the SSR or UK Part 1 depending on your circumstances. No VAT proof required. What does this mean in practice?

In your circumstances, I think the best approach might be to insist that the current owner registers it in Greece in his name first before the sale. Of course on the sale he needs to de-register it so you can register it. But having a copy of his certificate stating that he as a private individual is the owner and then the de-registration certificate, and the bill of sale should be all that is needed to get it registered in Greece in your name without any further inspections, VAT issues etc.