French registration and VAT

[Whitelighter]

Does anyone know if the French registration book in anyway confirms VAT status.

Having repeatedly asked the broker for proof of VAT he has sent me the French registration book and a certificate confirming (i think) the boat is legal post CE marking but I cant see anywhere VAT is mentioned.

I suspect at some point it was on a leasing scheme but the broker is adamant.

I don't remember boat buying being so hard in the past

 

[Hurricane]

Is the French registration system like the Spanish one - by chance?
IIRC, the Spanish system seems to record tax status.
The dealers in Spain don't seem to understand the VAT/IVA questions either.

But don't you have the purchase/ownership history from the broker?

 

[Whitelighter]

Honestly I've asked repeatedly.

Current owner has owned the boat since 2002, 1 owner prior to that but no details. The french registration is quite detailed - I think it was bought from outside France when the current owner purchased it.

 

[DAW]

FWIW, below is my experience based on several purchases in France and Italy. Sorry for the length of the response, but its not a simple topic ...

Registration is compulsory in France for all motor boats longer than 7.5m which are operated in French territorial waters and not registered in another flag state. The purpose of registration is not only to provide proof of ownership, but also to enable the French authorities to collect the annual taxes which they impose on "French" registered (as opposed to resident) motor boats. The taxes are linked to the power of the engines and can be considerable.

Registration is not itself "proof" of VAT status, but at the time of first registration the owner must have provided evidence of the VAT status of the boat.

In my experience French and Italian buyers rarely ask for proof of VAT status and don't seem to worry about this in the same way as UK buyers do. Registration is compulsory and first registration requires proof of VAT-paid status, so this effectively provides them with sufficient comfort on "VAT Paid" status. When a change of ownership occurs, the register is simply be updated with the new owner's details without providing much documentation other than the identity of the purchaser and the bill of sale. Consequently, many seem to regard buying a used boat as close to equivalent to buying a used car, particularly if the value is relatively low or the boat is relatively old, and all they are interested in is the registration document.

The system works and problems only seem to arise when the boat is purchased by a foreign buyer who wants to register in another country, or needs separate proof of VAT-paid status for other reasons. The French owner has often simply relied on the registration document and has not kept the original documentation required to prove VAT paid status which the new owner now needs.

The French and Italian customs authorities accept registration as evidence of VAT-paid status. Unfortunately, I know (because I asked for confirmation in writing) that HMRC will not accept registration alone as evidence of VAT-paid status. Another consideration is that if you deregister the boat in France (e.g. to transfer onto SSR) you may potentially then have problems re-selling it to a French owner because you as the seller will not be able to re-register the boat before sale or provide the evidence of VAT-paid status that could be required by the new owner to achieve re-registration.

Leaving it registered in France is probably not a commercially viable solution, as the taxes are quite high - the current formula is:

€64 x 0.0045 x no of cylinders x bore x bore x stroke (with all measurements in cm)

If you calculate the amount for a typical 40-60 foot boat with twin engines, you will see that the cost is not insignificant, although there is a rebate scheme for boats over 10 years old with engine power below a certain threshold.

If you need more info, then do a Google search for "La douane et la plaisance" and you will find a PDF document which sets out all of the rules (unfortunately only available in French).

On a separate note, make sure you include completion of the transfer of the French registration, or alternatively de-registration, as a closing condition of sale, as if this is not done properly the French authorities will not recognize the sale has taken place.

 

[jfm]

Yup, and just in case anyone reading this suspects DAW perhaps made a typo, he didn't. The formula includes bore twice!

 

[petem]

Yup, and just in case anyone reading this suspects DAW perhaps made a typo, he didn't. The formula includes bore twice!

Weird. Why can't they just base it on cubic capacity?

 

[MapisM]

Yup, and just in case anyone reading this suspects DAW perhaps made a typo, he didn't. The formula includes bore twice!

Blimey, and I thought that there were useless complications in some details of the IT tax on pleasure boats...!
Actually, I can see the sense in using a parameter which is (basically) related to the engine power, rather than LOA.
But, ermm... Why not engine power alone, I wonder...?

 

[jfm]

Weird. Why can't they just base it on cubic capacity?

Actually they do, in a French job creating way. The square of the bore, times the stroke, times the # cylinders WOULD BE the cc of the engine IF the pistons were square. The area of a circle is 79% of the area of the square that it fits inside, so they could have used cc from the engine's data then had .0057 instead of .0045 as the official constant. But then three calculator operators and bore/stroke lookerupperers would have nothing to do

 

[jfm]

Blimey, and I thought that there were useless complications in some details of the IT tax on pleasure boats...!
Actually, I can see the sense in using a parameter which is (basically) related to the engine power, rather than LOA.
But, ermm... Why not engine power alone, I wonder...?

Yup to all that. Thing is, it's all academic: no-one registers medium -to-big boats in France. My boat, a bathtub toy by French Riviera standards, would be €27k per annum, so of course even French owners are going to registered elsewhere. The French haven't spotted that you cannot tax to ridiculous levels things that move. Also there are sub-registers in Corsica with a lower tax rate and funnily enough around the s coast of mainland France you see plenty of French owned boats with Bastia and Ajaccio on the transom!

 

[Biggles109]

I recently bought my second boat in France. The first was UK SSR'd, the second was French flagged.

Overall it was a great experience; the agent/dealer was insistent that they would have to make all repairs needed, at the cost of the seller. I ended up with a freshly antifouled and serviced boat with a new cambelt by the Volvo main agent.

The documentation should consist of a Titre de Navigation, and the Acte de Francisation. Together these as I understand it show title. I was able to get a copy of the original VAT invoice, the original was tightly held by the port customs at which the boat is registered, getting the original is tricky for this reason. On sale it is in the interests of the seller that 'Radiation' documentation is completed allowing export and deregistering it from their name. My broker/dealer was very good on all of this despite my less than perfect French. Keep at it, it is worthwhile in the end...

 

[jfm]

I ... the original was tightly held by the port customs at which the boat is registered...

Thanks Biggles. That's interesting Jez. Try asking them? As mentioned in my email (offline to this discussion sorry) ship registrations are done by douanes who also do VAT - rather like MCA and HMRC being merged in the UK. The ship register files are decentralised - one in each major port, no equivalent of Cardiff, yours is Ajaccio in this case. Ask broker to ask Ajaccio for a scan of the VAT invoice perhaps?

 

[Whitelighter]

Thanks Biggles. That's interesting Jez. Try asking them? As mentioned in my email (offline to this discussion sorry) ship registrations are done by douanes who also do VAT - rather like MCA and HMRC being merged in the UK. The ship register files are decentralised - one in each major port, no equivalent of Cardiff, yours is Ajaccio in this case. Ask broker to ask Ajaccio for a scan of the VAT invoice perhaps?

Good suggestion. On it in the morning. Notirised copy would suffice I think

 

[jfm]

Good suggestion. On it in the morning. Notirised copy would suffice I think

I cant see how they'll bother to go to a notary for you. A scan would be probably the most they will do, and maybe a photocopy in the mail bearing the original of their rubber Douanes stamp

Corsica douanes always seem nice though. I've been visited twice, including last week when 5 of them with guns turned up to inspect my ships papers and told me my papers were wrong ("Eet eez forbidden!" they said a dozen times, in a friendly tone). Eventually they agreed everything was ok (after I'd told them about 25 times) and went away being very pleasant and jolly. Amazing job creation that 5 of them did this - there's very little unemployment in Corsica I guess!

 

[Portofino]

French Douanes have been a bit active this week over in the Var arround Cap Camarat -seem to be stopping French boats ,
Leaving red dusters alone ?
What allegedly was supposed to be " eez forbibben " ? May I ask
I am waiting to be be done on this Italien imported boat re registered SSR and flying a red ensign .Home port SoF
That's assuming they can keep up . ( when not@ anchor )
I think over 50 % of the workforce is employed by Gov agencies here in France -may be more ?

 

[Deleted User YDKXO]

I cant see how they'll bother to go to a notary for you. A scan would be probably the most they will do, and maybe a photocopy in the mail bearing the original of their rubber Douanes stamp

Depends on how keen the broker is to sell the boat. I've had problems in the past getting the UK registry to accept un notarised photocopies of title documents so for the last couple of boats I've bought in the Med I have told the broker that a condition of the sale is that I would only accept photocopies of documents providing he arranged for notarisation at his or the owner's cost. Of course after the sale is completed nobody will help you

 

[DAW]

Same experience here! I was told by UK registry that originals or notarised/certified copies of all documents are required - at least for Part I registration.

On recent purchases of used boats from Sunseeker, I've used the "Mediterranean Yacht Brokers Association" standard agreement which I think is well balanced and very good in terms of setting out the terms and conditions of the deal, including the requirements for survey and sea trial and the basis on which the boat can be rejected and the deposit reclaimed from the broker (basically at purchaser's sole discretion and subject only to deduction of certain agreed costs). There is a section to add "special conditions" where you can insert a reference to a list of original/notarised documents to be provided by the seller at his expense and this list is then attached as an addendum to the main agreement and becomes a condition of completion.

 

[Deleted User YDKXO]

There is a section to add "special conditions" where you can insert a reference to a list of original/notarised documents to be provided by the seller at his expense and this list is then attached as an addendum to the main agreement and becomes a condition of completion.

Useful info. Thanks for that

 

[jfm]

Yes, but it is better (if you have some negotiating power as buyer) to see those docs before signing so that you know they actually exist. Then a photocopy of them added to the contract, and then the completion condition is delivery of the originals of those docs whose copies are attached to the contract. This is better than just a list, because oftentimes seller won't have them but will sign up to the list and try to blag his way out of trouble on completion day AND he might have your deposit at that stage

 

[Deleted User YDKXO]

Yes, but it is better (if you have some negotiating power as buyer) to see those docs before signing so that you know they actually exist. Then a photocopy of them added to the contract, and then the completion condition is delivery of the originals of those docs whose copies are attached to the contract. This is better than just a list, because oftentimes seller won't have them but will sign up to the list and try to blag his way out of trouble on completion day AND he might have your deposit at that stage

Correct, I have learnt that through bitter experience which is why for a couple of Med boat purchases, on the proposed day of completion I have sat in the broker's office and not instructed my bank to transfer the funds for completion until I see all the promised documents, notarised where required, on the table in front of me. This does mean I have had to kick my heels in a hotel for a couple of days waiting for my money to hit the broker's account before the boat is released to me but it's a price worth paying IMHO

 

[ian38_39]

Buying ours from Croatia recently the Broker could not understand the issue with VAT paid status being proved by the T2L document. Unfortunately HMRC do not accept anything but original invoice as proof of VAT Paid status and these documents had been lodged with the Harbour Master for the issue of a vignette.

Got them all in the end but no one could understand why I wanted them.