Import duty?

[corp0193]

If I buy a boat in the Republic of Ireland for use in Northern Ireland does anyone know if I have to pay import duty?

 

[DaveS]

I don't think so, both are in the EU.

 

[Tranona]

No, exactl;y the same as buying a boat in the UK. You do have to satisfy yourself that VAT has been paid if applicable. Be particularly wary of boats that have either been corporately owned or spent time outside the EU in the past.

 

[AliM]

If it is new, then I think you have the choice of paying VAT in Eire or the UK - but read up carefully on the regulations and phone the local VAT office if confused. As I understand it, you can import it as new, and pay the VAT in the North (but will have to convince Eire that you are not liable for their VAT); OR you can leave it in Eire for 3 months and import it as a used vehicle (in which case you pay Eire VAT and there is nothing to pay when you get it back to N Ireland).

There are large sales offices in N German ports which sell HRs and other scandinavian boats in Germany (VAT rate 19%), which sit there for 3 months, till they can be imported as used vehicles to Sweden or Denmark where VAT is 25% or similar.

If you are buying a used boat, then none of the this applies!

 

[Tranona]

Not sure of your logic here. Once you have paid VAT in one country that is accepted in the whole of the EU. Where does the "3 months" come from? VAT is not a function of age (new or secondhand) it is solely a function of the nature of the transaction. If you buy a boat in Germany there is no process for exporting to and importing from. The dealers in Gemany are simply exploiting the difference in VAT rates to save customers money.

I bought my boat in Greece and paid VAT there. Nothing required to "import it" into UK. My Greek VAT receipt is adequate proof the tax has been paid.

 

[AliM]

Tranona,

If it's a used boat, there is no problem - VAT paid in one country in the EU (or exempt for various valid reasons) means VAT not payable in any other.

I am talking about the transaction of buying the boat new in a different EU country from the one where it will ultimately be used. If you buy it new, you either pay VAT in the country where it is built or you can elect to export it from that country (VAT unpaid) and pay the VAT in the place where you will keep it. In the former case, you have to import it to the country where you will keep it as a "used" vehicle, which means 3 months and 100 hours of use.

We are in the process of doing this at present - new boat built and launched in Germany, sitting in Germany till 3 months are up, when we'll sail her back to the UK. I assure you, having read all the rules, and phoned to make sure, that's the way it works!

 

[Tranona]

Not sure you are right. It is completely irrelevant whether the boat is new or secondhand. If you are a private citizen you pay VAT when you buy the boat - wherever it is if the vendor is a VAT registered trader. VAT is a tax on transactions and once the transaction has taken place and the VAT is accounted for, you can use the boat wherever you like.

Paying VAT at the point of purchase is just about impossible to avoid. There have been concessions in the past where a boat could be used for a short period effectively in bond before being exported outside the EU, but this is in the process of being withdrawn and only VAT registered traders can now export boats VAT free.

I can only think that you are talking about a specific boat tax in the countries you mention which can be avoided if the boat is classified as a secondhand boat. Pretty sure that it is nothing to do with VAT.

Just to illustrate further, my boat was 7 years old when I paid VAT. It had been owned by a Greek company, which had reclaimed the VAT when it was new as an input tax, because the boat was used commercially. When the boat was transferrd to me they charged VAT on the written down value - about 50% of its original cost

 

[AliM]

Your situation was entirely different, since your boat was not new when you bought it. Like I said above, my post is only relevant to buying new boats in one EU country when you want to use them in another.

Try this page:
http://customs.hmrc.gov.uk/channels...ntent&id=HMCE_CL_000165&propertyType=document

 

[EugeneR]

I note from the HMRC guidance note...

A 'means of transport' is any of the following when it is intended for the transport of passengers or goods: a boat more than 7.5 metres long (about 24.6 feet); an aircraft with a take-off weight of more than 1550 kilograms (about 4417 lb), or a motorised land vehicle which [...].

Vehicles, which are not suitable for use on public roads [...] are not means of transport and should not be supplied under the scheme; they are subject to tax in Member State of supply.

I would have expected that most boats and aircraft, by nature, are not suitable for use on public roads...?

 

[Sailfree]

As the EU is to prevent any restraint of trade you can buy anything in any EU country and pay VAT there providing it is for personal use.

I suspect the 3 months means that the VAT is levied on the then secondhand yacht value.

 

[Tranona]

Your situation was entirely different, since your boat was not new when you bought it. Like I said above, my post is only relevant to buying new boats in one EU country when you want to use them in another.

Try this page:
http://customs.hmrc.gov.uk/channels...ntent&id=HMCE_CL_000165&propertyType=document

This does not apply if you have paid VAT in another state. How could they possibly charge you VAT twice? This assumes you have not paid VAT when you purchased the goods.

The fact that my boat was not new when I paid VAT is irrelevant. If I had paid VAT when I bought it new rather than delaying payment through the charter contract, I would still not be liable for VAT in UK. I could have a boat delivered to Cyprus to take advantage of the lower VAT rate there and immediately bring it into UK and there would be no extra VAT payable. There are no restrictions on where a private individual can use a boat in the EU once VAT has been properly accounted for.

 

[EugeneR]

As the EU is to prevent any restraint of trade you can buy anything in any EU country and pay VAT there providing it is for personal use.

According to the HMRC note, most goods are charged with VAT in the EU country in which they are purchased; however for a new boat (or vehicle or aircraft), VAT will be due in the EU country of destination if it is a "new means of transport" and is sold to a customer who intends to take it to another EU country.

In other words, it seems to prevent VAT savings from buying large moveable assets in one EU country and moving it to a higher VAT EU country while it is "new"?

I share your view on the EU but am curious as to why the note seems to be contradicting our view? It seems to be something that needs to be taken into account when purchasing a new boat elsewhere in the EU?

 

[Reverend Ludd]

According to the HMRC note, most goods are charged with VAT in the EU country in which they are purchased; however for a new boat (or vehicle or aircraft), VAT will be due in the EU country of destination if it is a "new means of transport" and is sold to a customer who intends to take it to another EU country.

In other words, it seems to prevent VAT savings from buying large moveable assets in one EU country and moving it to a higher VAT EU country while it is "new"?

I share your view on the EU but am curious as to why the note seems to be contradicting our view? It seems to be something that needs to be taken into account when purchasing a new boat elsewhere in the EU?

So I guess thats why those "new" boats are piled up in Germany....waiting for them to become "used"

 

[Tranona]

According to the HMRC note, most goods are charged with VAT in the EU country in which they are purchased; however for a new boat (or vehicle or aircraft), VAT will be due in the EU country of destination if it is a "new means of transport" and is sold to a customer who intends to take it to another EU country.

In other words, it seems to prevent VAT savings from buying large moveable assets in one EU country and moving it to a higher VAT EU country while it is "new"?

I share your view on the EU but am curious as to why the note seems to be contradicting our view? It seems to be something that needs to be taken into account when purchasing a new boat elsewhere in the EU?

I am also curious, as I have never come across this as an issue before. Many people buy new boats in other EU coutries for all sorts of reasons and they can't avoid paying VAT when they buy. Trade has probably declined recently because of the adverse exchange rate. The country of use is surely irrelevant as there are no restrictions on the movement of goods within the EU.

 

[yacht surveyor]

I am also curious, as I have never come across this as an issue before. Many people buy new boats in other EU coutries for all sorts of reasons and they can't avoid paying VAT when they buy. Trade has probably declined recently because of the adverse exchange rate. The country of use is surely irrelevant as there are no restrictions on the movement of goods within the EU.

Makes sense to me if the VAT rate in Germany is lower (19% in an earlier post).

It sounds to me like a simple dodge to pay lower VAT rates and have a VAT paid boat! 6% off a new boat price due to lower VAT rates is fairly substantial (£12,000 on a £200,000 boat).

 

[AliM]

Makes sense to me if the VAT rate in Germany is lower (19% in an earlier post).

It sounds to me like a simple dodge to pay lower VAT rates and have a VAT paid boat! 6% off a new boat price due to lower VAT rates is fairly substantial (£12,000 on a £200,000 boat).

Precisely. It is also worth our while to keep our new boat in Germany for 3 months and pay german VAT (19%) rather than ship it or sail it straight home and pay UK VAT at 20%.

 

[Tranona]

Precisely. It is also worth our while to keep our new boat in Germany for 3 months and pay german VAT (19%) rather than ship it or sail it straight home and pay UK VAT at 20%.

But, if you have paid VAT in Germany you do not pay VAT in UK and as a private individual you cannot avoid paying VAT in Germany as the German supplier can only sell without VAT to a registered VAT trader in another state.

 

[Ubergeekian]

But, if you have paid VAT in Germany you do not pay VAT in UK and as a private individual you cannot avoid paying VAT in Germany as the German supplier can only sell without VAT to a registered VAT trader in another state.

Which would be the manufacturer's agent in that other state, non?

 

[jfm]

Not sure you are right. It is completely irrelevant whether the boat is new or secondhand. If you are a private citizen you pay VAT when you buy the boat - wherever it is if the vendor is a VAT registered trader. VAT is a tax on transactions and once the transaction has taken place and the VAT is accounted for, you can use the boat wherever you like.

Paying VAT at the point of purchase is just about impossible to avoid. There have been concessions in the past where a boat could be used for a short period effectively in bond before being exported outside the EU, but this is in the process of being withdrawn and only VAT registered traders can now export boats VAT free.

I can only think that you are talking about a specific boat tax in the countries you mention which can be avoided if the boat is classified as a secondhand boat. Pretty sure that it is nothing to do with VAT.

Just to illustrate further, my boat was 7 years old when I paid VAT. It had been owned by a Greek company, which had reclaimed the VAT when it was new as an input tax, because the boat was used commercially. When the boat was transferrd to me they charged VAT on the written down value - about 50% of its original cost

Tranona, just for mean of transport, which means cars boats and planes, VAT is ultimately payable not in the country in which the MT was originally delivered but in the country in which the MT was located when it ceased to be a NMT, which means when BOTH 100hrs and 3 months have elpsed in the case of a boat. Hence the HR folks are doing it right: their scandi customers take delivery of the new HR in Germany and so long as 3months AND 100hrs are clocked up in German waters they can then sail back home to Scaninavian waters without having to pay Scandi VAT. The relevant VAT rules in all EU countries are geenrally referred to as the NMT rules or New Means of Transport rules

 

[Reverend Ludd]

The whole thing needs standardising really ie the same rate of vat in every member state then we won't have to go through this kind of stuff to get a cheaper boat.