Buying in the EU

[Dino]

Quick question, I live in Ireland and I am buying a boat in Spain. The boat is UK registered on the SSR and I intend to transport the boat back to Ireland by truck.
The broker has sent me a Bill of Sale but it is a UK document from the Maritime & Coastguard Agency.
Is it okay to use this Bill of Sale document or should I ask the UK owner to deregister the vessel and use a generic or Spanish Bill of Sale?

 

[DavidJ]

I’m assuming the boat was in the EU on 31st Dec 2020 and that the owner can prove that. Many of us here have official letters from our marinas stating this.
If you satisfy the above then you have EU VAT and you can import the boat to S Ireland without any further tax
The UK owner will have to deregister anyway and Spanish Bill of Sale doesn’t change your situation.
Await other replies to test my view.

 

[Tranona]

Yes, the Bill of Sale is irrelevant as is the registration. The first sjows you now have title to the boat, and the fact that it uses a UK form is irrelevant. The important thing is to ensure you have evidence that the boat was in Spain to keep its EU VAT paid status. The registration does not affect either your title or the boats VAT status.

 

[petem]

I’m assuming the boat was in the EU on 31st Dec 2020 and that the owner can prove that. Many of us here have official letters from our marinas stating this.
If you satisfy the above then you have EU VAT and you can import the boat to S Ireland without any further tax
The UK owner will have to deregister anyway and Spanish Bill of Sale doesn’t change your situation.
Await other replies to test my view.

My understanding too.

 

[Dino]

Yes, the boat has been in Spain for 15-20 years so it was in the EU on 31/12/2020. I have asked the broker to get a letter from the marina stating this.
The broker also has a VAT receipt from the initial purchase in 1998.
I was just a bit concerned that the UK Bill of Sale might complicate matters.

 

[Tranona]

Bill of Sale has no meaning for VAT status (nor does the original VAT invoice). The only "officialdom" interest in your BoS will be your registry if you decide to register your title, and it will be perfectly acceptable.

 

[DavidJ]

Bill of Sale has no meaning for VAT status (nor does the original VAT invoice).

The original VAT invoice is the only indication that VAT was due, but it’s the only bit of paperwork that most of us SSR types have that is accepted by those who check, so having the original VAT invoice is really quite important.

 

[Tranona]

The original VAT invoice is the only indication that VAT was due, but it’s the only bit of paperwork that most of us SSR types have that is accepted by those who check, so having the original VAT invoice is really quite important.

Not in the OP's situation. The VAT status is determined by where the boat was located on 31/12/2020. What happened before and where VAT was paid is no longer relevant

 

[Mr Googler]

Not in the OP's situation. The VAT status is determined by where the boat was located on 31/12/2020. What happened before and where VAT was paid is no longer relevant

But what if the boat wasn’t vat paid or had no proof prior to brexit? It’s not suddenly vat paid as of 31/12/2020 regardless….hence you still need some sort of proof?

 

[Alicatt]

But what if the boat wasn’t vat paid or had no proof prior to brexit? It’s not suddenly vat paid as of 31/12/2020 regardless….hence you still need some sort of proof?

Think on what happened in Croatia when they joined the EU, all the boats there became "VAT Paid" overnight, a few people on here said they used that to get VAT paid status on their TA boats.

I don't think it is the same situation, but it shows it can happen.

 

[Portofino]

But what if the boat wasn’t vat paid or had no proof prior to brexit? It’s not suddenly vat paid as of 31/12/2020 regardless….hence you still need some sort of proof?

No one s saying it suddenly was paid .
If it was on a Sp register , for pleasure boats in private ownership it’s VAT would have to be paid to get on it .( not this example granted ) .
Eu states that have compulsory reg tend not to bother with vat , bos malarkey.The reg doc along with decals on the boat suffice .
When officialdom pull you they just tap in the reg decal number into a device and it instantly reviles everything they need to know inc VAT status FWIW , EU brokers roll there eyes or rumours even avoid Brits when a Brit squawks on about VAT staring at the reg decals on the side on the hull .It’s a none issue really .

I have said this before nip into a U.K. car dealer ask to sight a V5 ( U.K. car reg doc ) then quiz the sales guy , no take it to the dealer principal…….” Is it VAT paid “ ? You will look a right burke .” I need to see proof “
Same with registration system and EU boats in private hands .

Eu are saying no vat is due because chargeable transaction hasn’t taken place and it was in the EU on 31/12/2020 when the U.K. s status from member to 3 p changed .
Subtle but important difference .

Or in this case EU to EU .Sp to IR . No VAT is due as it moves around within the EU or changes ownership within the EU .

If it left ie came to the U.K. It then is treated like any other 3 rd party large transaction should it leave , just follow the unchanged rules for this .

 

[Mr Googler]

No one s saying it suddenly was paid .

So good idea to have proof when it was then? Whether that be a invoice or being on a certain register etc…

Location on Brexit only shows where that paid status is still valid.

@Tranona knows much more than me and has given me great advice. Much respect to him ?

 

[Tranona]

But what if the boat wasn’t vat paid or had no proof prior to brexit? It’s not suddenly vat paid as of 31/12/2020 regardless….hence you still need some sort of proof?

Yes it would. Thousands of boats have no proof of VAT having been paid. The Withdrawal agreement (as did the 1992 Accession treaty) defines the VAT status of boats. So a boat where VAT was paid in the UK changed if it was in the EU and EU VAT paid boats in the UK became UK "paid" and lost free circulation in the EU (subject to any reliefs of course)

 

[Mr Googler]

So….just so I have this straight…..

I have a boat with no proof of vat paid in the uk (I’m the uk owner) since say 2019. I have proof it was in the uk 31/12/2020

as of 1st Jan 2021…….I can now say it’s vat paid?

 

[Dino]

So I’m sorted for a VAT receipt from when the boat was purchased and I have a letter from the marina in Spain saying that the boat was in the marina on the brexit date. I also have an invoice showing berthing fees paid from April to April.
One other question, is there any issue if I change the name and fly an Irish flag when I collect the boat next week? I’ve got my ICC sorted but it’s an Irish ICC so I think I need to be an Irish vessel.

 

[Tranona]

So….just so I have this straight…..

I have a boat with no proof of vat paid in the uk (I’m the uk owner) since say 2019. I have proof it was in the uk 31/12/2020

as of 1st Jan 2021…….I can now say it’s vat paid?

From the point of view of the EU, yes. The question here is about a boat moving from one EU state to another and it has free movement because it was in the EU on the date. If it came into the UK unless it qualified for a relief it would be subject to VAT even though UK VAT was originally paid. Its status was determined by the terms of the withdrawal agreement.

The key point about VAT on boats is that it is not a tax on the asset but on transactions involving the asset. So paid "status" is not necessarily fixed. so a new boat that is sold to a private person has VAT paid on it and therefore becomes "paid". If however it moves out of the EU as was it potentially loses that status unless it returns using the Returned Goods Relief rules. since the Withdrawal agreement 2 new VAT areas were created - EU and UK and boats were either in one or the other, irrespective of where VAT was paid. Now if boats move from one area to another VAT becomes payable in the receiving area, again subject to RGR and TA which allows temporary use by non residents. In the case of the OP the movement is within one area (the RU) so no change. In the case of your boat it came from outside the EU so VAT was payable. It does not become VAT paid under the Withdrawal Agreement because it was never EU goods.

Hope that clarifies.

 

[Tranona]

So I’m sorted for a VAT receipt from when the boat was purchased and I have a letter from the marina in Spain saying that the boat was in the marina on the brexit date. I also have an invoice showing berthing fees paid from April to April.
One other question, is there any issue if I change the name and fly an Irish flag when I collect the boat next week? I’ve got my ICC sorted but it’s an Irish ICC so I think I need to be an Irish vessel.

Yes, you can change its name and you have to change the flag because you are not eligible to have a British flag. ICC as its name implies is "international" and is related to you not to the flag of the vessel. However it is not required to bring the boat back either by sea or road - you are just moving from one EU state to another and you do not need anything for doing it by sea, but you will be wise to get a T2L if by road. Your haulier will arrange this.

BTW frame the VAT receipt, it has absolutely no relevance now.

 

[Hooligan]

Yes it would. Thousands of boats have no proof of VAT having been paid. The Withdrawal agreement (as did the 1992 Accession treaty) defines the VAT status of boats. So a boat where VAT was paid in the UK changed if it was in the EU and EU VAT paid boats in the UK became UK "paid" and lost free circulation in the EU (subject to any reliefs of course)

I am not sure that this is entirely correct. A good friend of mine - pre Brexit - bought a beautiful traditional sailing boat. There were no records of it having been VAT paid and he enquired to the relevant authorities in the UK who basically said don’t worry we seem to have lost records for that year but of course it is VAT paid. His first trip was to France where he got asked for his VAT status. No papers so they impounded the boat. And they couldn’t give a toss about what the UK said. The moral perhaps of this story is - far better to have VAT status proved, if you do not then do not go near France. That said I see you have the VAT papers so just ensure that you have the landing status of the boat overnight on Dec 31 2020. And have fun sailing across from Maj.

 

[Tranona]

I am not sure that this is entirely correct. A good friend of mine - pre Brexit - bought a beautiful traditional sailing boat. There were no records of it having been VAT paid and he enquired to the relevant authorities in the UK who basically said don’t worry we seem to have lost records for that year but of course it is VAT paid. His first trip was to France where he got asked for his VAT status. No papers so they impounded the boat. And they couldn’t give a toss about what the UK said. The moral perhaps of this story is - far better to have VAT status proved, if you do not then do not go near France. That said I see you have the VAT papers so just ensure that you have the landing status of the boat overnight on Dec 31 2020. And have fun sailing across from Maj.

The advice in this situation is to tell the officious customs that the boat is UK based that VAT is the responsibility of the UK government. There were lots of these stories particularly in the early days and there was almost always more to them than the storyteller admits (or knows). The boat if pre 1985 would have been "deemed VAT paid" anyway or if pre 1974 would never had a VAT receipt anyway as VAT did not exist. The reality is that huge numbers of boats, particularly in the UK did not have any proof of VAT payment but still managed to go about their business including sailing around Europe without any problems.

What I wrote was entirely correct, although as in the immediate post 1992 days it took a while for things to settle down and people to get their heads around the rules.