All_at_Sea
Well-Known Member
Has anyone done this recently, if so any problems or is it ok. The boat l am looking at is Vat paid and Croatian registered and l want to bring back to the UK. Any thoughts?
Buying boats in Croatia
- Thread starter All_at_Sea
- Start date
Nina Lucia
Well-Known Member
I thought they are more expensive in Croatia, there is no many sailing boats there...
Tranona
Well-Known Member
Any boat you buy in Croatia before July 1 when it joins the EU will be liable to VAT if it is brought back into the EU irrespective of whether VAT has already been paid in another EU state or in Croatia. There are potential exemptions but they are very limited and you are unlikely to be able to take advantage of them.
There are many different scenarios depending on who owns the boat, where they are resident and the length of time it has been in Croatia. The liability for VAT arises in the state where the transaction takes place and where the boat is located and is payable in that state. Just as an example if the boat is owned by a UK resident and bought in the UK but taken to Croatia the owner can bring it back subject to the returned goods regulations. If however, he sells it in Croatia (or anywhere outside the EU) the new owner will be liable for VAT at the first point of entry into the EU. In other words it loses its VAT paid status. The obvious way of avoiding this is for the current owner to take the boat to, say, Italy and sell it there to another EU resident and there is no VAT. On the other hand if he is not an EU resident he will have to import it, pay the VAT and then sell it.
The dilemma is how well this is policed and almost certainly there are boats within the EU that have been illegally imported and not been "caught". The downside of this is first it is a criminal offence, second the person importing is personally liable for the VAT, third customs could get a charge over the boat covering the unpaid tax and finally there may be difficulty selling a boat with a potential outstanding tax liability.
The key document is the Bill of Sale as this is the document that normally defines where the transaction took place and therefore which state responsible for any VAT affairs. So if you travelled around Europe with a boat that had papers (Bill of Sale) that said it was bought in Croatia before 1 July local customs could quite legitimately require payment of VAT.
This is all complicated in Croatia by the transition arrangements that may make it possible to get the boat VAT paid at a concessionary rate - long thread running on the subject on Scuttlebutt. However, you need to find out much more about the exact status of the boat and its owner before you can decide on a course of action.
There are many different scenarios depending on who owns the boat, where they are resident and the length of time it has been in Croatia. The liability for VAT arises in the state where the transaction takes place and where the boat is located and is payable in that state. Just as an example if the boat is owned by a UK resident and bought in the UK but taken to Croatia the owner can bring it back subject to the returned goods regulations. If however, he sells it in Croatia (or anywhere outside the EU) the new owner will be liable for VAT at the first point of entry into the EU. In other words it loses its VAT paid status. The obvious way of avoiding this is for the current owner to take the boat to, say, Italy and sell it there to another EU resident and there is no VAT. On the other hand if he is not an EU resident he will have to import it, pay the VAT and then sell it.
The dilemma is how well this is policed and almost certainly there are boats within the EU that have been illegally imported and not been "caught". The downside of this is first it is a criminal offence, second the person importing is personally liable for the VAT, third customs could get a charge over the boat covering the unpaid tax and finally there may be difficulty selling a boat with a potential outstanding tax liability.
The key document is the Bill of Sale as this is the document that normally defines where the transaction took place and therefore which state responsible for any VAT affairs. So if you travelled around Europe with a boat that had papers (Bill of Sale) that said it was bought in Croatia before 1 July local customs could quite legitimately require payment of VAT.
This is all complicated in Croatia by the transition arrangements that may make it possible to get the boat VAT paid at a concessionary rate - long thread running on the subject on Scuttlebutt. However, you need to find out much more about the exact status of the boat and its owner before you can decide on a course of action.
All_at_Sea
Well-Known Member
Thanks T. I'll dig a bit deeper.
All_at_Sea
Well-Known Member
It appears that the boat is owned by a Croatian who paid both VAT of 25% and luxury tax when he imported the boat into Croatia in 1990,the boat was built in 1983. As this was pre VAT days am l still going to have a problem bringing this boat back to the UK? I will speak to HMRC tomorrow and report back. Any more thoughts?
Tranona
Well-Known Member
No. As soon as you import it into the EU it will be liable to VAT, and in theory comply with the RCD unless it was built in the EEA. The age bit only applies to boats that were in the EU on the accession date of the state where it is located, which in most cases is 1992. So after 1 July it will be free to move into the EU.
Worth Reading the VAT section on the RYA Site as this will help you understand the rules. You would only pay VAT in UK if it was the first EU state you entered which may not be easy from Croatia. In theory the rules are the same everywhere but you would need to check the in the state where you enter.
Worth Reading the VAT section on the RYA Site as this will help you understand the rules. You would only pay VAT in UK if it was the first EU state you entered which may not be easy from Croatia. In theory the rules are the same everywhere but you would need to check the in the state where you enter.
Rossynant
Well-Known Member
As Tranona said - since Croatia is not in EU. Yet.
Importing form Croatia now, you as buyer will have to pay VAT in EU. In any EU country you wish to 'formally enter'; it is not the same as really entering as nobody in Adriatic will care until You declare entry. Also you have a month "free period" in EU. At the moment Malta and Cyprus have lower VAT rate, guess some 18%
But Croatian registered boat will come into EU together with Croatia itself - so maybe better to wait for it? Then You will buy in EU.
Not being informed much, just from what I hear (people here have boats in Croatia): boat registered and used in Croatia for over 10 years will be deemed "VAT payed", automatically. So here present owner will have no problems and no tax to pay.
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Tranona
Well-Known Member
Your information on Croatia and the EU is incorrect. See the long thrad on the subject on Scuttlebutt for the latest on the subject.
Rossynant
Well-Known Member
I do learn a lot from this here Forum. And so I have learned, already a year ago or so, that each and every information from me is incorrect... 
So I am very sorry for this, indeed.
And to correct myself: only 8 years (of Croatia ownership) are necessary.
Article 410
1. By way of derogation from Article 71, the importation of goods within the meaning of Article 408 shall terminate without the occurrence of a chargeable event if one of the following conditions is met:
[...]
(c) the imported goods within the meaning of Article 408(1)(a) are means of transport which were acquired or imported before the date of accession in accordance with the general conditions of taxation in force on the domestic market of one of the new Member States or of one of the Member States of the Community or which have not been subject, by reason of their exportation, to any exemption from, or refund of, VAT.
2. The condition referred to in paragraph 1(c) shall be deemed to be fulfilled in the following cases:
(a) when the date of first entry into service of the means of transport was more than eight years before the accession to the European Union.
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:347:0001:01:en:HTML
So I am very sorry for this, indeed.
And to correct myself: only 8 years (of Croatia ownership) are necessary.
Article 410
1. By way of derogation from Article 71, the importation of goods within the meaning of Article 408 shall terminate without the occurrence of a chargeable event if one of the following conditions is met:
[...]
(c) the imported goods within the meaning of Article 408(1)(a) are means of transport which were acquired or imported before the date of accession in accordance with the general conditions of taxation in force on the domestic market of one of the new Member States or of one of the Member States of the Community or which have not been subject, by reason of their exportation, to any exemption from, or refund of, VAT.
2. The condition referred to in paragraph 1(c) shall be deemed to be fulfilled in the following cases:
(a) when the date of first entry into service of the means of transport was more than eight years before the accession to the European Union.
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:347:0001:01:en:HTML
Tranona
Well-Known Member
But if you read all the thread you will find this is still not certain as the law has not yet been passed. So doing anything in Croatia at this time is risky.
Rossynant
Well-Known Member
Agreed with that. I have a few friends with boats in Croatia - it's quite close to us 
Have heard a lot about. They are not certain either.
But for old boat I would not worry, as Croatians have many newer boats to tax. I doubt very much they would force their own citizens to pay, when this would be illegal...
Moreover, this is of no consequence for OP, as he may buy the boat after accession and he is not Croatian, so only subject to EU law. He may buy it and take to EU, not bothering with croatian local law. As long as this is purchased after accesion he's safe.
PS
This of course depends on boat papers: boat will be considered VAT payed only if Croatian VAT was payed on her before - so a receipt or such for this is important. I guess OP already know this.
Another - It's not for OP, but worth mentioning: there was an exemption from paying VAT (for Croatians) providing they do not sell the boat for 5 years. So some boats of this age have a VAT not payed, and this will not be necessary to pay, after those 5 years of croatian ownership, but papers must be had for this, to clarify the situation. It's always important to establish the VAT status anyway.
Have heard a lot about. They are not certain either. But for old boat I would not worry, as Croatians have many newer boats to tax. I doubt very much they would force their own citizens to pay, when this would be illegal...
Moreover, this is of no consequence for OP, as he may buy the boat after accession and he is not Croatian, so only subject to EU law. He may buy it and take to EU, not bothering with croatian local law. As long as this is purchased after accesion he's safe.
PS
This of course depends on boat papers: boat will be considered VAT payed only if Croatian VAT was payed on her before - so a receipt or such for this is important. I guess OP already know this.
Another - It's not for OP, but worth mentioning: there was an exemption from paying VAT (for Croatians) providing they do not sell the boat for 5 years. So some boats of this age have a VAT not payed, and this will not be necessary to pay, after those 5 years of croatian ownership, but papers must be had for this, to clarify the situation. It's always important to establish the VAT status anyway.
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