I just agreed to buy a boat in Italy. Now what do I do?

[PowerYachtBlog]

VAT status has to do with location not flag.

If I buy a boat with Maltese flag, with VAT paid, lying in Malta, and I change to an American flag she will remain Vat paid, if left in Malta and Europe.

But if I buy a boat with Maltese flag and leave on the same flag and ship it to an out of EU state, for instance UK, then she will loose her VAT paid status after three months.

 

[westernman]

VAT status has to do with location not flag.

If I buy a boat with Maltese flag, with VAT paid, lying in Malta, and I change to an American flag she will remain Vat paid, if left in Malta and Europe.

But if I buy a boat with Maltese flag and leave on the same flag and ship it to an out of EU state, for instance UK, then she will loose her VAT paid status after three months.

If you are a UK resident (or non-resident citizen??) and you bought a boat outside the UK, whatever the flag, whatever the VAT status, you will have to pay VAT the moment that boat touches the UK.

And then possibly get it re-surveyed for RCD II compliance.

 

[DavidJ]

And then possibly get it re-surveyed for RCD II compliance.

You’ve just opened another can of worms.

 

[Sticky Fingers]

I don’t believe the OP has any intention of repatriating the boat, so that’s academic.

 

[Portofino]

Well, there isn't really such thing as a "VAT paid status", to start with - apologies for previous brevity.
What I meant is that if upon purchase you register the boat in a non-EU Country, the onus of proof that the boat wasn't actually imported upon purchase (hence being VAT-table) is reversed.
And that's a potential claim that personally I'd rather not deal with, if possible - though such claim can indeed be rejected with proper evidence of all transactions history.

I don’t think there’s any change of “onus of proof “ at all if we are taking VAT proof in Italy .If it’s been on a EU registry .

In fact let’s not forget the bigger fish your guardia Finanza chase ( GF) is where the funds in totality came from in the first place , and how it’s annually funded ( berth , running costs etc ) , from Italian citizens on there boats irrespective of the flag .
They are not interested in none Italians who are not residents.

The VAT element is low down the pecking order because as said in the OP s case it’s been registered under the Maltese leasing scheme . Even had a second owner after the lessee ended .

In my case by a private individual ex Roma port reg

Quite the contrary GF these days ignore foreign owned and flagged boats in there waters once on there system .
My boats been previously recorded many yrs ago as VAT paid on there system …lts all on lap tops nowadays.
They just tap in the name ( presume marque ? ) and walk away or sail away .

The SSR number and red duster deter paper work checks .Wastes there time while the sound of Italian speaking boats engines firing up and windlasses clanking echo through the anchorage.

If the OP s prospect has been in Italy a while chances are it’s already on the “ system “. One part of which tells GF it’s VAT paid .Albeit via the Maltese scheme.

Better not to change its name so it always pops up “as is “.

They don’t assume / ground zero it’s spent qualifying time outside EU waters and thus re vat able at every change of owner .

I mean who’s gonna take a boat like mine ( and other open Med oriented designs ) outside EU waters to permanently loose it’s VAT status then sneak it back in ? It’s theoretically possible but a huge waste of GF s time to priories red duster SSR boats, previously appearing on a EU reg as some how owing VAT . They have bigger local fish to fry .

 

[jfm]

VAT status has to do with location not flag.

If I buy a boat with Maltese flag, with VAT paid, lying in Malta, and I change to an American flag she will remain Vat paid, if left in Malta and Europe.

But if I buy a boat with Maltese flag and leave on the same flag and ship it to an out of EU state, for instance UK, then she will loose her VAT paid status after three months.

That is totally wrong.
So much VAT law written on this forum by folks who know nothing about the topic (Tranona being the honourable exception).

 

[Dogone]

The answer to your last two questions are, respectively, "yes that's correct" and "impossible to know for sure, but very unlikely".

Ref. authorities' confirmation of VAT paid, such document simply doesn't exist.
It surely doesn't in Italy anyway, but I very much doubt it exists in Malta too - or also in the UK, for that matter.
What should and pretty sure did exist is the first invoice from the boatbuilder to the leasing company. That is the invoice showing the VAT applied on the new boat price (albeit at the reduced rate allowed by the Maltese scheme), proving that VAT was paid upon purchase.
Such invoice should normally have been handed over to the lessee, who should have kept it with the rest of the boat papers.
And it might be possible to get a copy either from the lessor or from the builder, who should have it in their accounting files.
Though for Italian companies there's no obligation to keep such papers after 10 years from the relevant fiscal year.
BUT, that was actually a transaction between the boatbuilder and the lessor, so arguably there wasn't any obligation for the lessee to keep a copy of it for proving anything. Bottom line, I would rate the invoice upon redemption as good enough, in this instance.

All that said, I would never register in the UK a Med boat already registered in any EU Country, just to avoid the hassle of the 18 months temporary admission, and also because the moment it's registered in the UK, the boat loses her "VAT paid" status. But each to their own on that!

Thanks for your comments. I believe Malta will issue a confirmation of VAT status for Maltese VAT payments, which used to be at a much lower VAT rate, but this is a Malta registered boat, with an Italian leasing scheme and two former Italian resident individuals as owners.

The first invoice won't be of interest to the authorities I am told because the leasing company will have reclaimed all the VAT. It is the missing first leasing invoices to the first owner that we would like and the original owner doesn't have (we asked). We will probably have to get a letter from him to authorise the leasing company to send us copies, or to him, then to us.

I'm not planning to do a TA as I don't need to as it is (I think and hope) VAT paid, so a TA is not required.

I will probably register in the UK, but that will not cause me to lose the EU VAT status.

VAT status has to do with location not flag.

If I buy a boat with Maltese flag, with VAT paid, lying in Malta, and I change to an American flag she will remain Vat paid, if left in Malta and Europe.

But if I buy a boat with Maltese flag and leave on the same flag and ship it to an out of EU state, for instance UK, then she will loose her VAT paid status after three months.

That's my understanding re the first bit, but on the second bit, the time period is 3 years I believe.

If you are a UK resident (or non-resident citizen??) and you bought a boat outside the UK, whatever the flag, whatever the VAT status, you will have to pay VAT the moment that boat touches the UK.

And then possibly get it re-surveyed for RCD II compliance.

Not coming to the UK. Weather and taxes. Yuk, do you think I'm crazy?

She's also got all the RCD badges, a heap of them.

 

[westernman]

Not coming to the UK. Weather and taxes. Yuk, do you think I'm crazy?

I was beginning to question your sanity, but now I am reassured.

 

[Dogone]

I don’t think there’s any change of “onus of proof “ at all if we are taking VAT proof in Italy .If it’s been on a EU registry .

In fact let’s not forget the bigger fish your guardia Finanza chase ( GF) is where the funds in totality came from in the first place , and how it’s annually funded ( berth , running costs etc ) , from Italian citizens on there boats irrespective of the flag .
They are not interested in none Italians who are not residents.

The VAT element is low down the pecking order because as said in the OP s case it’s been registered under the Maltese leasing scheme . Even had a second owner after the lessee ended .

In my case by a private individual ex Roma port reg

Quite the contrary GF these days ignore foreign owned and flagged boats in there waters once on there system .
My boats been previously recorded many yrs ago as VAT paid on there system …lts all on lap tops nowadays.
They just tap in the name ( presume marque ? ) and walk away or sail away .

The SSR number and red duster deter paper work checks .Wastes there time while the sound of Italian speaking boats engines firing up and windlasses clanking echo through the anchorage.

If the OP s prospect has been in Italy a while chances are it’s already on the “ system “. One part of which tells GF it’s VAT paid .Albeit via the Maltese scheme.

Better not to change its name so it always pops up “as is “.

They don’t assume / ground zero it’s spent qualifying time outside EU waters and thus re vat able at every change of owner .

I mean who’s gonna take a boat like mine ( and other open Med oriented designs ) outside EU waters to permanently loose it’s VAT status then sneak it back in ? It’s theoretically possible but a huge waste of GF s time to priories red duster SSR boats, previously appearing on a EU reg as some how owing VAT . They have bigger local fish to fry .

What you say makes sense and does reduce the perception of risk somewhat as the previous owners were Italian and kept her in Italy for all of her 7 years. It's hard to imagine they would not be happy with her status, but she will probably move to Greece eventually, so I will also have them to deal with.

It would be tempting to keep the name for the continuity in Italy, but I'd rather not.

The leasing scheme was Italian BTW, not Maltese, just the registration was there for the second owner only. I've no idea why. The first owner had her on the Part 1 UK registry, not in Malta as I previously thought and he was the one with the leasing scheme.

 

[PowerYachtBlog]

If you are a UK resident (or non-resident citizen??) and you bought a boat outside the UK, whatever the flag, whatever the VAT status, you will have to pay VAT the moment that boat touches the UK.

And then possibly get it re-surveyed for RCD II compliance.

UK is not EU so yes. You will have to pay the UK vat again.

Also I meant three years not three months for EU waters.

 

[Portofino]

What you say makes sense and does reduce the perception of risk somewhat as the previous owners were Italian and kept her in Italy for all of her 7 years. It's hard to imagine they would not be happy with her status, but she will probably move to Greece eventually, so I will also have them to deal with.

It would be tempting to keep the name for the continuity in Italy, but I'd rather not.

The leasing scheme was Italian BTW, not Maltese, just the registration was there for the second owner only. I've no idea why. The first owner had her on the Part 1 UK registry, not in Malta as I previously thought and he was the one with the leasing scheme

Id wait until it’s passes muster ( paperwork checked by Greek officials) in Greek waters .Gets on there system first before doing anything that could be misinterpreted as changing its identity .This includes a name change .

Its always good your passport syncs with the flag though if you are a foreigner in foreign waters , flagging like this imho smooths out more potential officialdom hassle .Even less explaining to do .

I don’t think as you describe it and if it flys a red duster ( SSR ) you will get any hassle with it in Italy.

No experience to comment on GK waters .

Hearsay on here suggests its patchy , down to personal local interpretations .Others with experience of GK officialDom dealing not just in VAT , but qualifications, and a load of other flash points ( if asked ) no doubt will chime in ?

 

[benjenbav]

I’m not, decidedly not, a VAT expert.

From what the OP has said, it seems as though the boat has been subject to arrangements designed to be efficient.

There are the following challenges in relation to VAT:

Understanding what arrangements have been made in the past.

Understanding how the proposed change of ownership will impact the status quo.

Understanding what can be done now.

VAT is poorly understood. Pay an expert. At least you can sue them if they foul it up.

 

[Dogone]

Update time.

We bottomed the VAT thing with some good paperwork that appeared finally. Also am getting a T2L certificate hopefully. I am reassured on it.

After very much agony I went under contract. A week later the seller is made a ward of the Court. So now I’m under contract to a senile seller (which is clearly why negotiations were so slow and painful) and I have the Court administrator appointee and Italian legal system to potentially lock me up for years in issues. Surveys are now to do, which are probably an easy get out if I wish. Bloody hell. Fire and frying pan. Maybe can invoke a force majeure also. Or maybe it is an opportunity to be firm negotiating on the inevitable survey defects. Stressful. Is life ever easy? Not in my world.

 

[jfm]

Bad luck. 2 questions:

Did you pay any deposit yet?

What is the time interval between date contract was executed and date the court declared him unfit to act for himself?

Those 2 things determine a lot.

 

[benjenbav]

I wonder if there is a ‘reverter back’ in the local law that might have the effect of avoiding any contract signed by the ward after the date he was deemed to have lost capacity?

 

[Dogone]

Bad luck. 2 questions:

Did you pay any deposit yet?

What is the time interval between date contract was executed and date the court declared him unfit to act for himself?

Those 2 things determine a lot.

Yes, 10% paid to lawyers, who are bound by the rather well negotiated MYBA MoA.

I haven’t yet seen Court papers, but the appointment was not later than 16 days after signing and presumably the application was made some days before then. It is possible, but in view of family involvement I think it unlikely the family would have applied for this before contract signing as they want the deal to be done and doing so would have held things up, or worse, jeopardised the standing of the contract. They just don’t want it to be messed up by the seller.

Another concern I have is I unconventionally agreed to pay the seller directly for the whole amount to complete and presumably his account will be controlled by the POA appointee. I don‘t understand the mechanics or consequence of this yet nor do I have full facts on this either.

I have a get-out. If I don’t like the boat at sea trial I will be able to get out with the deposit. But I want the boat and the deal is fair.

 

[Dogone]

Update again. Vendor was made a ward of the court due to his mental health and vulnerability and a lawyer appointed as guardian. I rescinded the original contract as the boat had too many flaws in the survey and the guardian was not empowered by the court to negotiate, so I had no choice. A new Italian contract was agreed and executed that required a fix to the faults, which were done. An ultra agonising and excessively long drama, but I now own the boat and am sat on it in the marina in Italy. Happy days, I think.

 

[Alicatt]

Congratulations on the perseverance!
Now we need pics

 

[Dogone]

Congratulations on the perseverance!
Now we need pics

I’d be happy to, but I can’t. Trouble is, I described the owner as senile and with the pictures that becomes a personal, rather than an abstract insult. Give it a good bit of time out of consideration.

 

[benjenbav]

I’d be happy to, but I can’t. Trouble is, I in effect described the owner as senile and with the pictures that becomes a personal, rather than an abstract insult. Give it a good bit of time out of consideration.

What is the boat? You may well have said but I’ll also plead senility if I’ve forgotten.

Whatever it is, congrats for getting past an unusual amount of hurdles and I hope you will continue to be very happy with the acquisition.