EU rules on UK boats and the 18 months - latest

[alex23299]

So - just been advised by Berthon in Mallorca that the 18-month rule for UK registered boats kept in the EU is now being enforced more rigidly, especially by Italian ports.
This is the principle that a UK-registered and owned boat must leave the EU every 18 months, or pay VAT on it. People used to take their boat to Turkey/Algeria/Tunisia and get a stamp and come back into the EU. But in the last couple of years the view was that if you travelled into international waters (more than 12 miles off-shore) and could prove it with log entry and a screenshot of your plotter, you'd be OK. Meanwhile the RYA - dithering - says it is not sure anymore that that is enough.
Anyone with recent experience of trouble over this? What's the view?

 

[dunedin]

So - just been advised by Berthon in Mallorca that the 18-month rule for UK registered boats kept in the EU is now being enforced more rigidly, especially by Italian ports.
This is the principle that a UK-registered and owned boat must leave the EU every 18 months, or pay VAT on it. People used to take their boat to Turkey/Algeria/Tunisia and get a stamp and come back into the EU. But in the last couple of years the view was that if you travelled into international waters (more than 12 miles off-shore) and could prove it with log entry and a screenshot of your plotter, you'd be OK. Meanwhile the RYA - dithering - says it is not sure anymore that that is enough.
Anyone with recent experience of trouble over this? What's the view?

The RYA aren’t “dithering”. There are a lot of things - like this case of whether just going outside 12m and taking a screenshot of your chart plotter is sufficient - depends in practice on the view of the official you are dealing with on the day in a particular location.
If you don’t like their view - and you speak the local language perfectly, know the rules perfectly, and are up for a legal fight in a foreign country - you might try to persuade the local official that you are right and they are wrong. But perhaps that might not end well.
Hence why RYA and others are likely to be non-committal as it varies so much.

I suspect the best thing would be to check with the local officials in the place you intend to try this at and agree beforehand. And hope you see the same person and they take the same view when you come back in.

 

[Sandy]

I've never heard a straight answer from any legal question I've asked the RYA! Note: I am no longer a member.

There is no argument that can stand up in court if another, non-Schengen Area, nation stamps your passport or gives you an invoice for a nights berthing. You might even enjoy the visit to the non-Schengen Area nation.

If you get a kick trying to prove you were outside a 12 mile limit to an individual carrying a glock and a box of search gloves then go ahead.

 

[Tranona]

I've never heard a straight answer from any legal question I've asked the RYA! Note: I am no longer a member.

That is because usually (and this is the case here) the local law is not clear. What is clear is the principles -in EU VAT Directive that covers temporary admission which is very simple. The boat must be owned by a non EU resident and registered outside the EU, in which case it can be admitted for use by the owner (subject to restrictive conditions) for 18 months without paying VAT. It says nothing about what happens afterwards if it leaves nor any conditions for subsequent re-entry. Each state is responsible for establishing local laws that meet those principles and applying them.

Inevitably such laws vary and rarely go further (as in the UK when we were members) in defining processes. So local practice varies from no specific action to keeping records of each entry and exit of individual boats. Every time you do a trip to France now you enter under these rules with no paperwork other than clearance by customs - no specific record of how long you stay. In many Med states where big expensive boats are kept VAT free by non residents under these principles it is inevitable that customs pay more attention and establish their own procedures for monitoring compliance. Croatia for example uses the "outside territorial waters" rules. Greece has a system of customs bonding that stops the clock when the boat is not being actively used, during which time the boat can change hands to another non EU resident without VAT and a new TA period starts for the new owner.

So don't knock the RYA - they will quote what the law says, but are not in a position to advise how it is applied - even in the UK. As already suggested here it is wise to get a ruling from the local customs, but be aware that not all local customs in any one state are necessarily consistent in their application of the local rules!

 

[Sticky Fingers]

—deleted —

 

[benjenbav]

I don’t know but would guess that the issue is one of evidence rather than any ambiguity over the need to leave EU waters or actually dock in a non-EU port.

It would be easy to make a log showing you’d left EU waters without being within 1,000 miles of the boat.

And I wouldn’t be surprised if self-certified evidence is met with a shrug or an “oh yeah?” in certain official quarters.

Getting a stamp from Tunis or wherever is so much more convincing to officialdom.

Alternatively, take your local customs officer for a day out to international waters.

Then they can back up the claim.

 

[Tranona]

An option touched on by Tranona which might work for the OP is that the 18 month rule restarts on sale. So if the ownership of the boat was to be transferred from the OP to another party (eg husband to wife) say for £1 plus other considerations, and all due paperwork including bills of sale and new registration completed, there’s no need for the boat to go anywhere, the new owner’s 18 month TA starts on completion day. The sale can take place in the marina. Then sell back again in another 18 months.

No! The conditions of TA prohibit sale in the EU without paying VAT at the rate and value at the time the boat entered the EU. It would work (subject to local customs agreement) if the sale took place outside the EU and the new owner declared the boat on entry. However this may also have unwelcome implications. For example if the boat were UK VAT paid it would lose that on the sale if it was completed outside the UK.

 

[Tranona]

I don’t know but would guess that the issue is one of evidence rather than any ambiguity over the need to leave EU waters or actually dock in a non-EU port.

It would be easy to make a log showing you’d left EU waters without being within 1,000 miles of the boat.

And I wouldn’t be surprised if self-certified evidence is met with a shrug or an “oh yeah?” in certain official quarters.

Getting a stamp from Tunis or wherever is so much more convincing to officialdom.

Alternatively, take your local customs officer for a day out to international waters.

Then they can back up the claim.

Indeed, when the rules are at the level of principle it is all aboutb the evidence that the conditions for claiming TA have been met. Of course some states like Italy and Greece have a formal written procedure you have to follow. Most states do not.

 

[Sticky Fingers]

No! The conditions of TA prohibit sale in the EU without paying VAT at the rate and value at the time the boat entered the EU. It would work (subject to local customs agreement) if the sale took place outside the EU and the new owner declared the boat on entry. However this may also have unwelcome implications. For example if the boat were UK VAT paid it would lose that on the sale if it was completed outside the UK.

Oh really? OK my mistake, I’ll remove the post. So how does any non-VAT-paid boat get sold in the EU?

 

[Tranona]

Oh really? OK my mistake, I’ll remove the post. So how does any non-VAT-paid boat get sold in the EU?

It does not without leaving unless like Greece which has the system of custom bonding by lodging documents with the Port police. That is the whole point of TA - it is for genuine visitors and one of the conditions is that the boat cannot be sold in the EU (same in the UK). Clearly there are ways around it as suggested on this thread most of which work. Swiss owners for example have kept boats in the EU under TA for decades by leaving and re-entering. Increasingly UK boat owners will be doing the same.

 

[Sandy]

So don't knock the RYA - they will quote what the law says, but are not in a position to advise how it is applied - even in the UK. As already suggested here it is wise to get a ruling from the local customs, but be aware that not all local customs in any one state are necessarily consistent in their application of the local rules!

Gosh, do you need to argue every point? You don't know the the questions asked nor the answers given.

When employed we had a legal team to provide advice and guidance on the law. It was their job to read and understand the law, where necessary research the subject then translate it into 'plain English'. Having done that work, work out with technical and managerial teams what the company could legally do, what was sailing to close to the wind and what would send us to jail.

My expectation was that the RYA would do the same for a question from a member. There was a reply, but I needed a lawyer friend to translate it from legalese - we both came away thinking what they meant, but could not be sure!

Given the above I still consider my statement in post #3 valid.

 

[Stemar]

If you don’t like their view - and you speak the local language perfectly, know the rules perfectly, and are up for a legal fight in a foreign country - you might try to persuade the local official that you are right and they are wrong. But perhaps that might not end well.

I never heard of that doing anything but making the official double down.

 

[Tranona]

Gosh, do you need to argue every point? You don't know the the questions asked nor the answers given.

When employed we had a legal team to provide advice and guidance on the law. It was their job to read and understand the law, where necessary research the subject then translate it into 'plain English'. Having done that work, work out with technical and managerial teams what the company could legally do, what was sailing to close to the wind and what would send us to jail.

My expectation was that the RYA would do the same for a question from a member. There was a reply, but I needed a lawyer friend to translate it from legalese - we both came away thinking what they meant, but could not be sure!

Given the above I still consider my statement in post #3 valid.

You have brought this up several times in relation to proof of VAT payment where like this topic there is no definitive answer.

However on this topic the comment about the RYA "dithering" is unsurprising because, as I explained, practice is so variable and changeable that it is difficult to give any definitive advice. There are approx 18 coastal states in the EU with their own "versions" of the EU rules - and yes some (like Croatia) do accept evidence of leaving territorial waters - forum members have reported using this. difficult for the RYA to keep up with all this and give reliable advice, which no doubt will include the rider to take advice locally.

 

[Baggywrinkle]

What I used to do in Croatia to reset my TA clock was leave and re-enter at the same port. This basically means that on re-entry you are presenting the authorities with the exit evidence they produced themselves - and there will be a time difference between exit and re-entry but most importantly, all the stamps and the paperwork can be quickly verified as they came from the same customs office. You can also ask on exit what they require you to do and comply with it. The port I used in Croatia was happy with a day-sail out of sight of the customs quay with no trips ashore.

I always made sure the exit time was on the paperwork as well as the date because in this time between exit and re-entry you are required to have travelled outside the 12nm limit ... so I made sure that the time difference was always big enough to allow my boat to complete this journey.

Taking a photo of the plotter screen, or a track, outside the 12nm limit is proof, AIS logs from marine traffic etc. are also a good idea if you have an AIS transmitter. I'd say all evidence I have created myself is not as sound as that from marinas, ports, and customs authorities.

If I can produce a receipt for an overnight stay in a marina outside Schengen, and the entry and exit paperwork for the boat from a country outside Schengen, then this is indisputable proof. If the customs authorities still take me to task, then it may take them a while to verify the authenticity of the "foreign" paperwork, but they will not have a leg to stand on in court.

At the end of the day, the authorities in foreign countries can do what they like, the EU law states leaving the territorial waters of the EU countries, so the onus is on the yachtsman to prove beyond reasonable doubt that this was the case.

A plotter photo is one way to try and do this, AIS logs would strengthen the case, but IMO the gold standard is passport stamps for the crew and customs paperwork for the boat from the non-Schengen country. This is watertight, and any official questioning this is a true ar$ehole.

Here's a thread for some yachtsmen for whom it went badly wrong and they ended up chained to the dock for over 70 days.

Do foreign flagged yachts get checked in the EU?

 

[Baggywrinkle]

PS: If a yacht has not paid EU VAT, then the crew need proof of residency outside the EU. This is relatively easy for Brits who are UK resident, but is always a bit of a minefield for EU citizens resident outside the EU if they are in the EU with a VAT unpaid boat. I think this is why the couple in my previous link ended up shackled to the dock.

Proof of VAT paid in the EU has also been difficult for me, both my boats had VAT paid in Croatia but ran into problems with the authorities due to the boats being U.K. registered. They assumed that any VAT paid status had been lost due to the B-Word or that it was somehow invalid because the boat must have left the EU to be UK flagged.

My first boat needed a freight forwarding agency to produce a T2L from my import paperwork (from when Croatia joined the EU) before either the Croatian or Slovenian authorities would accept that the new Slovenian owners had bought a VAT paid boat. This is despite having the Croatian import paperwork.

My current boat has the paper trail from initial order to the present, including the import paperwork and the VAT receipt for VAT paid in Croatia. As both the seller and I were resident in Germany, and the boat has a uninterrupted marina berth contract in Croatia, I have the evidence to prove it has not sold outside the EU and has not lost its VAT status, despite being UK flagged.

Since the B-Word happened, my UK flagged boats have had questions asked and false assertions made about their VAT status by the Croatian and Slovenian authorities. I would certainly say that a UK flag attracts more scrutiny than it used to, and that the residency, VAT, flag state relationship is very poorly understood by the officials in the customs offices - and it is those officials who will cause yachtsmen problems regardless of what the RYA or any other authority says. Over time this should improve as they all learn, but in the meantime expect trouble, comply with the letter of the law and keep a record of everything on the boat.

 

[Tranona]

The number of non VAT paid boats in the Med has mushroomed in the last 10 years or so, partly because of the Russians and Arabs and partly the consequence of Brexit so inevitable that there is more scrutiny of TA. This was set up for visitors in the original 1993 rules when the number of boats was small, but of course now the main users are boats that are effectively permanently based in the EU resulting in a huge loss of VAT revenue.

The problems for the couple in the video were more complex because the boat was purchased under the "sailaway" scheme which as they explained is very restrictive as it is designed for boats that permanently leave the EU. It has the proviso that the boat may enter an EU port in the event of an emergency, but inevitably that is open to interpretation. Add to that the boat was owned by an EU resident so was not eligible for TA. Not surprising the circumstances gave the Italian legal system indigestion.

 

[Sandy]

You have brought this up several times in relation to proof of VAT payment where like this topic there is no definitive answer.

That was not my reading of the question posted by the OP.

@alex23299 is trying to clarify if passing the 12 nm limit by say 2 chains for an undisclosed length of time resets the 'out of Schengen/EU clock'. I was suggesting by that having your passport stamped plus some invoices proving the vessel was in a non-Schengen/EU nation this would be better evidence should a Schengen/EU nation wish to apply VAT to a UK vessel after 18 months, than a Ships Log/Chart plotter Screenshot/GPS or AIS plot. I am fully aware that AIS was developed to 'monitor the movement of shipping'.

I can't understand why the RYA Legal team are 'dithering', @alex23299 's word not mine, over this. I assume that they are lawyers and understand the weight of documentary evidence, especially when part of that documentary evidence is a passport; one of the oldest legal documents on the planet. They should be monitoring the situation in the EU as a service to their members or are they leaving that to other organisations, e.g. the Cruising Association?

 

[dunedin]

That was not my reading of the question posted by the OP.

@alex23299 is trying to clarify if passing the 12 nm limit by say 2 chains for an undisclosed length of time resets the 'out of Schengen/EU clock'. I was suggesting by that having your passport stamped plus some invoices proving the vessel was in a non-Schengen/EU nation this would be better evidence should a Schengen/EU nation wish to apply VAT to a UK vessel after 18 months, than a Ships Log/Chart plotter Screenshot/GPS or AIS plot. I am fully aware that AIS was developed to 'monitor the movement of shipping'.

I can't understand why the RYA Legal team are 'dithering', @alex23299 's word not mine, over this. I assume that they are lawyers and understand the weight of documentary evidence, especially when part of that documentary evidence is a passport; one of the oldest legal documents on the planet. They should be monitoring the situation in the EU as a service to their members or are they leaving that to other organisations, e.g. the Cruising Association?

You clearly have a personal issue with the RYA.
They are not "dithering" but have simply indicated (correctly) that they cannot give a definitive response as to whether going 12m offshore will work - for the reasons indeed that you yourself have given, as well as Tranona, I and others. There appears to be no hard and fast EU legal ruling, and it depends on local interpretation of the rules by the officials in the location and on the day. And a boat owner arguing that they are right and the official is wrong, as you and others have said, rarely works.
For the same reasons, I don't think you would get anything more definitive from the CA.

 

[ImpImp]

That was not my reading of the question posted by the OP.

@alex23299 is trying to clarify if passing the 12 nm limit by say 2 chains for an undisclosed length of time resets the 'out of Schengen/EU clock'. I was suggesting by that having your passport stamped plus some invoices proving the vessel was in a non-Schengen/EU nation this would be better evidence should a Schengen/EU nation wish to apply VAT to a UK vessel after 18 months, than a Ships Log/Chart plotter Screenshot/GPS or AIS plot. I am fully aware that AIS was developed to 'monitor the movement of shipping'.

I can't understand why the RYA Legal team are 'dithering', @alex23299 's word not mine, over this. I assume that they are lawyers and understand the weight of documentary evidence, especially when part of that documentary evidence is a passport; one of the oldest legal documents on the planet. They should be monitoring the situation in the EU as a service to their members or are they leaving that to other organisations, e.g. the Cruising Association?

Try reading post #4, slowly if necessary.

 

[Graham376]

Oh really? OK my mistake, I’ll remove the post. So how does any non-VAT-paid boat get sold in the EU?

Easy, make paperwork appear to have been completed outside the EU, we've seen lots of UK reg boats sold here, some under TA.

I personally wouldn't rely on AIS indicating 12+ miles offshore to be accepted and no doubt officials would also want to see EU exit stamps in passports, which can only be obtained by declaring a destination outside EU..

P.S. Remember marinas submit details of arrivals and departures (boats and people) to authorities.