Jersey Flag in Greece

[Irish Rover]

I'm sure this subject has been discussed before but I can't find it in a search. We are EU citizens resident outside the EU. We recently bought a boat in Greece VAT not paid and we are in the process of registering it in Jersey. We will not base the boat permanently in Greece but we hope to spend time cruising in Greek waters on a regular basis. I'd be very interested to hear from owners of other Jersey registered boats based in Greece or cruising in Greece. I have a few specific questions:
1. Am I correct in assuming I will not be able to get a DEKPA and will need a transit log instead,
2. Does anyone know what proof the port police will ask to establish we are resident outside the EU,
If anyone has any other general advice I'd be very grateful as well.

 

[Tranona]

You are correct, you will need a transit log rather than a dEKPA.

The key thing is that you are non EU resident and your boat is not VAT paid. Therefore you have to apply for Temporary Importation into the EU to use it. This allows you 18 months free movement after which you must either pay the VAT or take the boat out of the EU. However if you take it out for a short while you can re-enter with a new TI.

In a way your Jersey registration is not a problem as to get TI the boat must be registered outside the EU, so registering in Jersey satisfies this requirement.

 

[macd]

2. Does anyone know what proof the port police will ask to establish we are resident outside the EU,

Many port police will be less sure of the law than you are, and certainly than Tranona. The less well-informed will usually think in terms of nationality rather than residence. Residence, of course, is key in fiscal matters. Customs, who deal with TI, should know the rules.

A 'British Islands' passport might help, if you have one. (Although it is actually no proof of where you currently reside, it will mention Jersey). Perhaps income tax documents?

 

[Irish Rover]

Thanks for the information, guys. We are Irish passport holders and resident in Turkey. Hopefully someone with an EU passport who has been through the process of satisfying the Greek authorities of non EU residency will happen on this thread and tell us about their experience.
I've heard a few stories about Non-EU Red Ensign boats being issued with a DEKPA by Port Police in Greece who assume all "British ships" are EU registered but I haven't actually met anyone in that situation and I have no idea what would happen when you entered a port where the police know their EU's from their CD's or OT's. It would obviously be a lot more convenient for us to have a DEKPA as we wouldn't have to sign out and buy a new TL and go through the procedures every time we come back to Greece which I expect will be quite often as we are only a couple of hours away. A friend advised just to go to the Port Police, play dumb, ask for a DEKPA and take it if you get it but I'm not sure I'm that brave.

 

[daveyw]

Our boat was non vat paid and jersey registered. It was a complication, can't remember why. We always parked bow to so jersey wasn't obvious. After a few years we reregistered in London, easy. With brexit we are looking around to maybe re-register in EU. Ireland is complicated/ impossible so considering going Dutch.

 

[macd]

We are Irish passport holders and resident in Turkey.

OK. Forget the British Islands passport, then :encouragement:
Good luck.

 

[Irish Rover]

Our boat was non vat paid and jersey registered. It was a complication, can't remember why. We always parked bow to so jersey wasn't obvious. After a few years we reregistered in London, easy. With brexit we are looking around to maybe re-register in EU. Ireland is complicated/ impossible so considering going Dutch.

I'd dearly love to hear what the complications were, if you could remember.
You need to be an Irish citizen to register in Ireland but it's not complicated. Paperwork is very similar to Jersey including the requirement for a Tonnage Survey. There is a once off fee and the registration is permanent until you de-register [just did it and moved my boat to the Turkish register in order to make it more saleable here]

 

[Tranona]

I'd dearly love to hear what the complications were, if you could remember.
You need to be an Irish citizen to register in Ireland but it's not complicated. Paperwork is very similar to Jersey including the requirement for a Tonnage Survey. There is a once off fee and the registration is permanent until you de-register [just did it and moved my boat to the Turkish register in order to make it more saleable here]

The flag of registry is largely irrelevant. The constraint on moving freely around the EU is a function of VAT payment. Nothing to do with flag, or citizenship, or residence of owner. If it is not VAT paid it does not have freedom of movement.

As I said earlier non residents can move around with a non VAT paid boat for limited periods, but to use the scheme the boat has to be registered outside the EU. This is because it is aimed at genuine tourists. On the other hand there is no restriction on non EU registered boats (including Jersey) provided VAT is paid, although having a non EU flag may attract more attention.

The problem with Greece is that enforcement of EU rules is hit and miss, partly because of laziness and partly because as often reported here there is a serious lack of knowledge at all levels in the Port Police. so as daveyw says you can get away for years as he has done being illegal, if you do get caught the penalties do not dare thinking about.

So best perhaps to comply with the law. For Seamus this is relatively easy - just apply for TI, but for daveyw the only way is to pay the VAT as he does not seem to qualify for TI.

 

[Tranona]

Our boat was non vat paid and jersey registered. It was a complication, can't remember why. We always parked bow to so jersey wasn't obvious. After a few years we reregistered in London, easy. With brexit we are looking around to maybe re-register in EU. Ireland is complicated/ impossible so considering going Dutch.

If you still have not paid VAT and you are EU resident your boat is illegal. Flag of registry is irrelevant. After Brexit, nothing will change that, although we do not know yet what the rules will be UK VAT paid boats. However, if your boat is still in Greece suggest you pay your VAT there, then it will be "new" EU VAT paid.

I should add that I am making a number of assumptions about how the boat came into your ownership and in Greece without paying VAT.

 

[Irish Rover]

Thanks again for all the useful information especially Tranona. My plan is to stay legal as the cost of doing so appears reasonable by comparison to the hassle of falling foul of the authorities. Would I be correct in assuming that the authorities would have no difficulty with an EU resident guest or guests on board as long as a non EU resident owner is also on board?

 

[Tranona]

Thanks again for all the useful information especially Tranona. My plan is to stay legal as the cost of doing so appears reasonable by comparison to the hassle of falling foul of the authorities. Would I be correct in assuming that the authorities would have no difficulty with an EU resident guest or guests on board as long as a non EU resident owner is also on board?

The restrictions are very limited provided you use the boat for your own pleasure use. You can rad the full set of rules in HMRC VAT Notice No8. Although these are a statement of UK law, they are consistent with the EU Directive and essentially the same as law in other EU states.

In the UK TI is administered by HMRC and I assume in Greece you will need to apply to a customs office. Never had dealings with them myself as although I bought a non VAT paid boat in Greece I had the agent deal with the paperwork.

 

[Irish Rover]

Thanks Tranona. That is very informative and it seems the rules are very flexible in regard to EU residents using/sharing a boat temporarily imported on a TL as long as the non EU resident owner remains in the EU.

 

[daveyw]

Although the boat was was non vat paid, it was technically vat exempt because it was of a certain age and in a EU port on whatever date they specified. However, obtaining an vat exempt certificate was nigh on impossible so we just cruised on. Trying to get a consistent opinion on fees, taxes, dues in greek ports will never happen!

 

[dunedin]

If the boat registration doesn’t match either the owners nationality or the owners residence, and they have avoided paying VAT by using an island of convenience, the port police may suspect that somebody is trying to be a clever clogs and evade something. So sounds like an open invitation to check every piece of paperwork in detail, check fuel in tanks, dates of flares and generally look for a way to trip up said clever clogs.
Sound s like complex way to do tax avoidance

 

[Tranona]

Although the boat was was non vat paid, it was technically vat exempt because it was of a certain age and in a EU port on whatever date they specified. However, obtaining an vat exempt certificate was nigh on impossible so we just cruised on. Trying to get a consistent opinion on fees, taxes, dues in greek ports will never happen!

Thought that might be the case. It is not then "non VAT paid". You do not need a "VAT exempt" certificate as such things are meaningless simply because a boat is not necessarily permanently VAT paid. It can lose that status, most commonly by leaving the EU and particularly then changing ownership outside the EU. All you need is evidence that it was in the EU on the qualifying date and built prior to 1986.

Fortunately nobody is really interested in VAT on older boats as the amounts involved are small and there is no real mechanism for investigating their background, nor of collecting any VAT. If the last transaction involving the boat took place in the UK then any VAT issues are the responsibility of HMRC, irrespective of where the boat is located. This is where the bill of Sale is useful to evidence where the transaction took place.

 

[jfm]

We recently bought a boat in Greece VAT not paid

I agree everything tranona writes except for one important thing. You cannot TI if you did not import the boat yourself physically. If you bought the boat IN Greece then at the moment you acquired it you hadn't personally imported it. Therefore, at the moment you took ownership of the boat it might have been not vat paid, and in your hands, and the subject of a vat mortgage/claim by operation of Greek law. It's impossible to say for sure unless you tell me with some precision on what basis the boat was not vat paid at the moment you bought it.

You cannot cleanse this after the fact by leaving and re-entering the EU

The normal method to deal with this is to sail the boat 13nm offshore with seller and buyer (or their representatives) on board, then deliver the bos, then buyer reimports it. By doing that, the boat has always been previously imported to EU by buyer when in buyers hands in EU.

Anyway, bottom line is that I can't be more precise unless you explain circumstances of boat's non vat paid status when you bought it.

 

[Irish Rover]

Thanks for your post jfm. I have to admit it has me somewhat worried. The boat was registered outside the EU and the owner was not an EU citizen. He had it in Greece on a TL. It is currently on the land in Greece and he has de-registered it from his home registry and I am registering it in Jersey.

 

[jfm]

Thanks for your post jfm. I have to admit it has me somewhat worried. The boat was registered outside the EU and the owner was not an EU citizen. He had it in Greece on a TL. It is currently on the land in Greece and he has de-registered it from his home registry and I am registering it in Jersey.

A TL doesn't definitively tell you the VAT position but by the sound of it the seller had the boat in TI, which allows a non EU resident to bring a boat into the EU for 18 months max, during which period the VAT exemption lapses if the boat is sold or hired. If the boat was indeed on TI, the seller breached the terms of his TI (by selling the boat) and he is required to pay VAT. He likely wont be doing that because the enforcement process is weak, but not totally infallible, and if he doesn't the VAT is secured (by operation of Greek law, not by any private law security process) on your boat. Frankly this is unlikely to happen, but it could. When YOU come to sell the boat, it's a black mark on the boat for a buyer who spots it.

When you buy a non VAT paid boat that is in TI in the seller's hands, you can exchange contracts in the EU but you MUST sail it 13nm offshore and do the completion/closing (=handover the BoS) there, then sail it back. This happens all the time, including with $50m superyachts, and is perfectly acceptable and lawful. You skip this step at your own peril.

 

[Irish Rover]

Thanks again jfm. This is a complicated situation as far as geography is concerned. The boat is on the land in Greece, I'm in Turkey and the vendor is in his home country which is another non EU European country. I viewed the boat in Greece but was back in Turkey when we agreed terms. He was back in his home country and I in Turkey when we signed contracts and he was in his home country when he signed the BOS. He has de-registered in his home country and I am in the process of registration in Jersey. When everything is sorted the plan was to meet again in Greece in a couple of months for him to give me a bit of guidance and handover. I will then take the boat to Turkey. I estimate I will be 4 days in Greek waters if the weather is kind and probably make 3 overnight stops. As well as changing the flag I'm changing the name of the boat and intended applying for a new TL as soon as I launch it. Based on all that have you any advice for a rookie who isn't sleeping well after seeing your post last night.

 

[jfm]

Thanks again jfm. This is a complicated situation as far as geography is concerned. The boat is on the land in Greece, I'm in Turkey and the vendor is in his home country which is another non EU European country. I viewed the boat in Greece but was back in Turkey when we agreed terms. He was back in his home country and I in Turkey when we signed contracts and he was in his home country when he signed the BOS. He has de-registered in his home country and I am in the process of registration in Jersey. When everything is sorted the plan was to meet again in Greece in a couple of months for him to give me a bit of guidance and handover. I will then take the boat to Turkey. I estimate I will be 4 days in Greek waters if the weather is kind and probably make 3 overnight stops. As well as changing the flag I'm changing the name of the boat and intended applying for a new TL as soon as I launch it. Based on all that have you any advice for a rookie who isn't sleeping well after seeing your post last night.

Thanks. It's irrelevant where you/seller were when you made the contact and closed the sale. Point is that the boat itself was in EU at the moment ownership transferred to you. IF it was on TI (temp import) then unquestionably a critical condition of TI was broken and SELLER is liable for VAT. His obligation is unfortunately secured on your boat. Messy. As I say you are unlikely to get caught and for sure YOU don't have to file any tax return, make any declaration or pay any tax in connection with all this. You'll only need to get your cheque book out if Greek tax authorities enforce the seller's debt on your boat, which is v unlikely. It's a pity to have this black mark on the boat's history when you come to sell but meantime don't worry.