Getting VAT Back

[Tranona]

I understand there are stories of VAT free boats being bought privately from Greece (pre EU membership days) and coming via Spain as their vat rate then was lower than ours.


Mike.

The situation with non-VAT paid boats from Greece is very different and unconnected with their entry into the EU - that is taken care of by the transition arrangements.

However, until 2002 charter operators were allowed to sell ex charter boats without VAT as part of the Greek policy of encouraging tourism. These boats were usually issued with a certificate from the Greek VAT authorities to the effect that all taxes were accounted for, although none was actually paid. Once the boat changes hands again it becomes irrelevant as there is no VAT on private sales. However, some owners may be concerned about a lack of documentation - even though strictly not needed. The EU forced Greece to change this policy in 2002. I paid VAT on my boat when I took it off the Greek charter register based on the agreed written down value - so effectively half of the full amount on its new cost.

As to choosing your country to pay VAT on an import, it should be the first state you enter, but in a sense for many it is irrelevant as there is little difference in VAT from state to state and in theory the valuation criteria are the same. However, I am sure that if a high value boat is involved it is worth researching the state with the lowest tax rate and the most lenient application of the valuation rules!

 

[Imperial One]

BartW you are perfectly correct. Don't rely on ImperialOne's analysis.

My original post in reply was -

Yes I agree with you 100% about buying and selling to Vat registered companies in the EU. In fact if the buyer was in another EU country, you simply invoiced the nett amount and quoted the other companies Vat number on the invoice.


Did I not AGREE with BartW that if he is a Vat registered company buying a boat in the EU that is Vat liable, which includes the UK, then he can reclaim it?

 

[jfm]

My original post in reply was -

Yes I agree with you 100% about buying and selling to Vat registered companies in the EU. In fact if the buyer was in another EU country, you simply invoiced the nett amount and quoted the other companies Vat number on the invoice.


Did I not AGREE with BartW that if he is a Vat registered company buying a boat in the EU that is Vat liable, which includes the UK, then he can reclaim it?

I don't have time to wade thru the detail. Your post 11 was incorrect, BartW questioned it, and I told Bart he was right to question it because your post 11 was indeed incorrect.

I see you have corrected yourself, after post 11. All fine. Point is, a great deal of what you are writing here on VAT, not just post 11, is quite wrong, or correct only in certain circumstances. You quote HMRC notices rather than base your answers on the actual law. Chipping in here with guesses is fine but you claimed high ground along the lines "I am a BMF member so I am an expert and ask me for advice" and I thought it appropriate to point out that you are actually quite wrong in much of what you're writing here. Anyway there is no correlation between knowing tax law and a being a member of BMF

 

[[2068]]

HMRC lawyers have faced jfm across the bench, and lose, regularly. That's part of the reason he runs a SQ58. It does make me chuckle when some people here re-cycle wikipedia quotes and snippets from the HMRC site and think they know better

 

[plato-gb]

Greek ex charter boats

Tranona, when you bought your ex-charter vessel, was it sold to you VAT paid? ie did you agree a VAT inclusive price with the seller or did you buy it ex VAT and organise lawyers, payemtn etc yourself?
Regards

The situation with non-VAT paid boats from Greece is very different and unconnected with their entry into the EU - that is taken care of by the transition arrangements.

However, until 2002 charter operators were allowed to sell ex charter boats without VAT as part of the Greek policy of encouraging tourism. These boats were usually issued with a certificate from the Greek VAT authorities to the effect that all taxes were accounted for, although none was actually paid. Once the boat changes hands again it becomes irrelevant as there is no VAT on private sales. However, some owners may be concerned about a lack of documentation - even though strictly not needed. The EU forced Greece to change this policy in 2002. I paid VAT on my boat when I took it off the Greek charter register based on the agreed written down value - so effectively half of the full amount on its new cost.

As to choosing your country to pay VAT on an import, it should be the first state you enter, but in a sense for many it is irrelevant as there is little difference in VAT from state to state and in theory the valuation criteria are the same. However, I am sure that if a high value boat is involved it is worth researching the state with the lowest tax rate and the most lenient application of the valuation rules!

 

[Tranona]

Tranona, when you bought your ex-charter vessel, was it sold to you VAT paid? ie did you agree a VAT inclusive price with the seller or did you buy it ex VAT and organise lawyers, payemtn etc yourself?
Regards

I already "owned" the boat because I bought it new through the dealer at a reduced price under a charter management deal. In fact I left it on charter for an additional year and then "took delivery" according to the original contract. When I originally paid for the boat the VAT position was unclear because the process of changing the rules was on going.

The end result as I understand the agreement with the Greek revenue is that VAT was levied on the original contract price if that was for a reduced value, or 50% of the total price if the purchaser bought the whole boat upfront. Slight problem was also an agreement about the translation of the contract value into Euros. I paid for my boat in DM, bought with £. The DM price was converted to Drachma then into Euros at the ruling rate on entry to the Euro. I was effectively a loser on this when my VAT bill was translated into £ - extra loss because I delayed payment and the £ fell!

The dealer (Kiriacoulis) organised all the paper work including the deregistration and I paid the VAT to them with the normal receipt. I now have a full set of documents - Bill of Sale (this has to be registered with the Port Police and the Registry), de-registration document recording the transfer to me and a VAT receipt.

If you are buying from a Charter company and they own the boat they should do all this for you. I would insist that they pay (it cost me 800 Euros, but that was in my contract). If the boat is privately owned then you will not pay VAT, but the private owner should have paid it if he bought the boat after approx 2002 (or more strictly it came off the charter register).

I would be wary of any recent (post 2002) boat that did not have a VAT paid invoice with it. As I said if you are buying from a dealer he has to charge VAT and give you a VAT invoice. Many charter boats are quoted Non Tax Paid because that is what they are and VAT is 21% of the final agreed price.

Hope this helps

 

[Deleted User YDKXO]

As to choosing your country to pay VAT on an import, it should be the first state you enter, but in a sense for many it is irrelevant as there is little difference in VAT from state to state and in theory the valuation criteria are the same. However, I am sure that if a high value boat is involved it is worth researching the state with the lowest tax rate and the most lenient application of the valuation rules!

Thats not true. VAT rates across Europe vary from 15% to 25% which makes a big difference on an expensive boat. Also valuations must vary from country to country because it's highly subjective. How do Customs value a 10yr old boat which is entering the EU for the first time and which has been under the same ownership for the whole of that time so there is no recent sale transaction evidence? One of the advantages of paying VAT in Spain is that, not only do they have a relatively low rate at 16% but also they use some kind of book value based system for valuing the boat which tends to understate the value of used boats. Although my boat was caught up in the recent matriculation tax purge in Spain, at least I did benefit from a relatively low value being placed on the boat thanks to the generous depreciation rates the Spanish customs apply to their book values for valuing used boats.
I also wonder whether you can do a 'deal' with a particular country's customs. I'm British and I would prefer that my tax payment went to HMG rather than some even less deserving lot in Europe. Could you go to HMRC with an ex VAT used boat and say, hey guys cut me an attractive deal here or I'm going to give the Spanish boys my VAT money?

 

[Hurricane]

One of the advantages of paying VAT in Spain is that, not only do they have a relatively low rate at 16%

Mike

I think you will find thats changing this summer - going up to 18% on 1st June - I think.

Edit:- Just checked - its actually 1st July to 18% from 16%

Mike

 

[Tranona]

Thats not true. VAT rates across Europe vary from 15% to 25% which makes a big difference on an expensive boat. Also valuations must vary from country to country because it's highly subjective. How do Customs value a 10yr old boat which is entering the EU for the first time and which has been under the same ownership for the whole of that time so there is no recent sale transaction evidence? One of the advantages of paying VAT in Spain is that, not only do they have a relatively low rate at 16% but also they use some kind of book value based system for valuing the boat which tends to understate the value of used boats. Although my boat was caught up in the recent matriculation tax purge in Spain, at least I did benefit from a relatively low value being placed on the boat thanks to the generous depreciation rates the Spanish customs apply to their book values for valuing used boats.
I also wonder whether you can do a 'deal' with a particular country's customs. I'm British and I would prefer that my tax payment went to HMG rather than some even less deserving lot in Europe. Could you go to HMRC with an ex VAT used boat and say, hey guys cut me an attractive deal here or I'm going to give the Spanish boys my VAT money?

I am glad you agreeing with me - even though you say you are not. Read what I say and it is almost exactly the same as you - except for the personal (but not really relevant) experience. For many people they do not have much choice. Their first landfall coming from west is likely to be on the western seaboard, not say, Malta, and from the east probably Greece. Who knows what the valuation will be until you get there unless as I suggested you did some research first. The EU rules are the same in principle, but the method of arriving at a value is not stated so is clearly open to interpretation locally.

How important all this is to an individual will depend on the value of the boat (and therefore the potential tax), where he is coming from, where he lives, his view on the ways of working in individual states and his propensity to spend time and effort minimising his bill.

Therefore somebody wealthy enough to have a £1m boat will give these matters some consideration, and probably hand over the legwork to a professional. On the other hand a lone wandering sailor with a 30ft boat worth £20k who pitches up in the Azores and wants to enter the EU and does not qualify for any of the reliefs is rather stuck!

 

[Pinnacle]

Personally I'd consult an accountant ...

 

[mainshiptom]

Boat now sold

On its way to NZ.

No vat return just boatless Tom

 

[kcrane]

On its way to NZ.

No vat return just boatless Tom

Boatless, but hopefully not cashless...

 

[mainshiptom]

What is the value of money?

When you do not have a boat?

 

[crazy4557]

On its way to NZ.

No vat return just boatless Tom

She was still sitting on the Quayside at Southampton Docks when I passed yesterday (Monday)...looking slightly 'dismantled' ready for the long trip ahead.

 

[mainshiptom]

Did you take a picture?

Tom

 

[Deleted User YDKXO]

I am glad you agreeing with me - even though you say you are not. Read what I say and it is almost exactly the same as you - except for the personal (but not really relevant) experience. For many people they do not have much choice. Their first landfall coming from west is likely to be on the western seaboard, not say, Malta, and from the east probably Greece. Who knows what the valuation will be until you get there unless as I suggested you did some research first. The EU rules are the same in principle, but the method of arriving at a value is not stated so is clearly open to interpretation locally.

How important all this is to an individual will depend on the value of the boat (and therefore the potential tax), where he is coming from, where he lives, his view on the ways of working in individual states and his propensity to spend time and effort minimising his bill.

Therefore somebody wealthy enough to have a £1m boat will give these matters some consideration, and probably hand over the legwork to a professional. On the other hand a lone wandering sailor with a 30ft boat worth £20k who pitches up in the Azores and wants to enter the EU and does not qualify for any of the reliefs is rather stuck!

No I'm not agreeing with you. You stated that ' there was little difference from state to state' in terms of VAT rates. Well thats not true because there's upto 10% difference between the lowest and highest so it definitely pays to shop around. As for where VAT is paid, I would have thought that could easily be planned. AFAIK, you can apply for a temporary importation licence to allow a non VAT paid boat to enter the EU for a limited period of time so you don't necessarily have to pay VAT at the first port of entry into the EU