Buying yacht in USA, anyone know VAT rules

[jollysailor17]

I am very interested in buying a boat in the States. If this goes ahead I will sail her back to the UK, to prepare her for setting off again and unlikely to return for a year or so. Does anyone know the rules re VAT. At present she is USCG reg, but I propose to transfer to SSR before I leave the US. As a UK citizen, would I be allowed to bring her back to the UK for a limited period and not pay EU vat and if so do you know how long that period is? Any and all info on this greatly appreciated.

 

[jfm]

You've asked a complex question. In the circs you describe, you are liable to UK VAT @20% of the delivered value on import if you do nothing

I think your only hope is to qualify for inward processing relief. You'd need HMRC authorisation, and would be limited only to doing the works on the boat while in the UK following which you'd have to re-export it. If you cruise in it, IPR wont be given. It's a v complex topic, HMRC info here, and see esp para 2.26

If I'm allowed to change the question, then I'd say it would be much easier to import the boat to CI, Gib or (with certain extra steps) France. Or find a non EU citizen/relative and have them own it, leave it USCG reg, and then that non EU owner has 18mths TI during which time you can work on the boat. But I'm moving the goalposts here from the ones given in your Q

 

[Sailfree]

Other minefield is CE compliance.

You will not be able to sell boat in EU and it appears from previous threads to be a costly option to get boat CE compliant.

 

[goboatingnow]

The short answer is No , you will have to pay VAT on arrival in the Uk. You will also have to secure CE approval by doing a post construction assessment. This can be expensive depending on what category you decide to fit into.

In my view US boats do not prove economical to import into the EU by private means.

 

[Reverend Ludd]

Other minefield is CE compliance.

You will not be able to sell boat in EU and it appears from previous threads to be a costly option to get boat CE compliant.

That is not 100% true, if the boat was in the EU before 1998 you do not need a CE. That said this boat wasn't so you will need it.

 

[jwilson]

That is not 100% true, if the boat was in the EU before 1998 you do not need a CE. That said this boat wasn't so you will need it.

There are some quite surprising bits that count as EU for this legislation, including some in the Caribbean and the Pacific Ocean - all dependent territories of EU members.

Many people bringing US boats in pay the VAT in the Azores, and the general feeling is that they can achieve lower valuations/payments there.

 

[SimonJ]

And if you arrive in USA with a single air ticket in you will need a Visa.

There are engine EU compliance issues as well.

 

[grumpy_o_g]

Don't forget you're not just importing it into the UK, you're exporting from the USA as well. I have no idea on the rules but certainly sales tax varies from state to state and I think some states have a boat tax or luxury tax of some kind. I presume there's a method of tax-free purchasing as you're exporting.

 

[Ex-SolentBoy]

That is not 100% true, if the boat was in the EU before 1998 you do not need a CE. That said this boat wasn't so you will need it.

Congrats.

Most pedantic and irrelevant comment I have read today.

 

[AntarcticPilot]

There are some quite surprising bits that count as EU for this legislation, including some in the Caribbean and the Pacific Ocean - all dependent territories of EU members.

Many people bringing US boats in pay the VAT in the Azores, and the general feeling is that they can achieve lower valuations/payments there.

No British Overseas Territories are in the EU; they have the status of independent countries.

 

[jwilson]

No British Overseas Territories are in the EU; they have the status of independent countries.

Yes - but they count as being part of the EU for the purpose of the RCD legislation - if a boat can be shown to have been in (for example) the British or French Antarctic territories, prior to 16th June 1998, they are regarded as exempt from RCD. http://www.ceproof.com/CE-Marking/USA/Industrial/CE-Marking/EEA-Country-List.html has a list of the locations.

 

[davidej]

No British Overseas Territories are in the EU; they have the status of independent countries.

But isn't Guadaloupe (for instance) part of metropolitan France and therefore part of the EU.

When I looked at this (admittedly some years ago) the Azores was the best bet. Part of Portugal but with a lower VAT rate.There are (were) companies who would handle all the paperwork for you.

 

[Tranona]

But isn't Guadaloupe (for instance) part of metropolitan France and therefore part of the EU.

When I looked at this (admittedly some years ago) the Azores was the best bet. Part of Portugal but with a lower VAT rate.There are (were) companies who would handle all the paperwork for you.

Difference is very small now 22% instead of 23% (Madeira is the same). However, it may be that the process is easier and valuations lower. Also as it is the first port of entry into the EU for some people that is where they have to pay VAT.

 

[AntarcticPilot]

But isn't Guadaloupe (for instance) part of metropolitan France and therefore part of the EU.

When I looked at this (admittedly some years ago) the Azores was the best bet. Part of Portugal but with a lower VAT rate.There are (were) companies who would handle all the paperwork for you.

Yes; French territories are regarded by the French as being part of France; they even elect deputies to the French parliament. My comment related purely to British territories, which I have professional reasons for knowing are NOT part of the EU, and in most cases are not affected by EU legislation (I was interested in EU Environmental Information Regulations, and got a categorical declaration by the relevant desk of the Foreign Office that they were not applicable to a British Overseas Territory). I was interested by the comment above that they are subject to RCD regulations; this must be a matter that individual territories have decided, as it could not be imposed on them by the EU, and the Foreign Office tends to have a view that European regulations do not and should not apply to Overseas Territories except where they represent best practice when they may be adopted as "best practice" but not be EU legislation. Presumably they feel applying RCD gives them access to the European market for their home industries. However, as BAT has NO industry, I fail to see how it could apply; no boats have been built in Antarctica!

PS: Just re-read the post about RCD and note that it is exemption only that is mentioned. That, of course, is within the powers of the EU to decide what exemptions they will apply.

 

[Tranona]

PS: Just re-read the post about RCD and note that it is exemption only that is mentioned. That, of course, is within the powers of the EU to decide what exemptions they will apply.

The "exemption" bit is a lot more complex than it seems on first reading. A boat can be exempt for two reasons. First and most obvious if it was built in the EEA prior to 1998 - even though it was sold outside the EEA. typically that would be European boats exported to (mainly) USA, which can be re-imported into the EU without needing to comply with the RCD. The second category is boats that were built outside the EEA (again mainly US and perhaps South African, Far Eastern or Antipodean) that were imported into the EU before 1998. The number of boats in either category that would qualify by virtue of being in dependent territories classified as part of EEA, and seeking import into the EU is likely to be very small. It seems also, according to CE Proof that its "exemption certificates" which are basd on documentary evidence do not have any legal significance and could be rejected by other states.

Anyway, all of this is probably irrelevant to the OP if his intention is not to import the boat into the EU for use. JFMs suggestions of how to get the boat into the EU for a short period without complying with the RCD or paying VAT are valid, but the OP must be aware of the significant restrictions that will come with these methods (if they are feasible for the OP in his circumstances).

 

[peterborthwick]

Must you import / export.

I'm also considering buying a US boat and see from this and other threads the nightmare and costs of importing ...but is it neccessary? Is there anything to stop me, as a british citizen owning (and living on) a US registered boat? My vague intentions would be to buy in the US, and spend perhaps a year cruising close to where i buy it, before moving on to who knows where...

 

[rotrax]

Of course, some US boats are compliant-our 1999 Island Packet is. It is possible that American Hunter- Legends over here- may be. Tom Cunliffe has just done it. Might be worth getting on his website and asking him about it through his message service.

 

[Robin]

I'm also considering buying a US boat and see from this and other threads the nightmare and costs of importing ...but is it neccessary? Is there anything to stop me, as a british citizen owning (and living on) a US registered boat? My vague intentions would be to buy in the US, and spend perhaps a year cruising close to where i buy it, before moving on to who knows where...

You cannot own a US (federal) Documented boat, like UK Part 1 rather than SSR, as a non-US citizen, but you can own a boat in the USA that is State registered. Then as a non-USA citizen you are only allowed to stay in the USA for 6 months unless you have a resident visa, not easy to get. You can un-document a US boat and register it as British, but then you cannot sell it easily in the USA to an American without it being imported and more taxes paid.

I live on our boat in the USA, but my wife is American and our boat is US Documented in her name because as a Brit I cannot do it any more than she could have been listed on Part 1 registry on the boats we owned in the UK.

To add to other comments, each State varies but Sales Tax is payable on ALL boat purchases in most States, EVEN ON USED BOATS. Rates vary but 6% is common and some States have a cap, Florida is capped at maximum tax of $18,000 now, Virginia at $2,000. Delaware is still tax free. If you buy in one State and move to another they may charge the difference in tax if their rate is higher. You usually have some time to leave the State if moving and intending to register in another State, but will need to prove that and if buying through a broker they may insist you deposit the tax with them as I believe they can be held liable. In Florida you have 30 days to leave which can be extended to 90 days on payment of about $50 and again extended to 180 days on payment of around $480 but it cannot be extended more. You will need to State register ownership and there is an annual fee for that even if the boat is Federal documented, so ours in Florida IS US Documented and Florida registered for annual fee, but we do not have to display ugly Florida Reg numbers on the hull like un-documented boats. The dinghy however is too small to be Documented so IS FLorida Registered and DOES have to have ugly numbers and annual tax decals displayed...

You could certainly cruise the USA (bearing in mind their visa rules) and even visit Canada, Bahamas and probably most of the Caribbean with just basic USA State Registration but I would expect it to be awkward if you meet an officious official wondering how you had a US flagged boat and a UK passport??

Every circumstance is different and there are no easy answers!

 

[TQA]

I investigated this topic 3 years ago.

One possible option that I believe is open to you is to register in the USVI.

My understanding is that;-

you can do this as a UK citizen

No sales tax is payable.

BUT do check on whether or not such registration is acceptable in the countries you might visit!

After considering the options I went with the SSR.

 

[Tranona]

I'm also considering buying a US boat and see from this and other threads the nightmare and costs of importing ...but is it neccessary? Is there anything to stop me, as a british citizen owning (and living on) a US registered boat? My vague intentions would be to buy in the US, and spend perhaps a year cruising close to where i buy it, before moving on to who knows where...

It is not the owning bit that is the problem, it is trying to use it in the EU because you have to pay VAT and comply with the RCD. If you are a non EU resident you can do this through the temporary importation rules. If you are an EU resident you can't.

However, there is nothing from a UK (or EU) point of view that prevents you buying a boat in the US and then cruising outside the EU. You can register the boat on the UK register which will allow you to visit other countries, but you may be constrained by your personal visa circumstances. You can then sell the boat whereever it is legal for you to sell it, but not in the EU without complying with the RCD and paying VAT.

One of the reasons why boats are so cheap in the US is that the potential for selling them outside the US is very limited, but if you are in a position to do it, given the constraints on usage, you can get a good boat cheaply.