New tax for foreign yachts based in Greece from 1st January 2014????

[Chris_Robb]

Inadvertently you may have hit on the answer regarding who pays the tax. Greek tax number holder only.

Its hardly likely to be amended and I have resigned myself to pay up ( well until I can find a way around it)

Bob, no Tax number will be required. This was part of a reply I had from the Ministry of Shipping.

You do have the possibility to pay your levy on a monthly basis or make an annual payment (for the whole year) with a 30% discount. The levy is charged on parts of meters, as stated in paragraph 4 of your e-mail. An electronic payment facility will be available for EU Nationals without need of a Greek Tax Number.

 

[Steve C Cronin]

I think you'll find it does (nullify the VAT paid status). It is certainly the case that if a VAT paid boat is sold outside the EU and then re-imported she looses her VAT paid status and VAT must be paid again.

Having been involved in the financial world for most of my working life and a VAT registered person since it's instigation, I can assure you that I am right. However, if a registered person goes on to sell an item by way of trade, he IS required to charge tax on the sales price of the item. If he buys assets for the purpose of using them in his business, pays VAT on them as "taxable inputs" which he subsequently re-claims but on down the line he becomes de-registered, the C&I will not seek to recover the tax previously reclaimed. Otherwise, I would owe them thousands!

The boat you mention, once it exits the EU as far as ownership is concerned, becomes an asset of that foreign owner so if he subsequently imports it to the EU it is then treated like any other import, regardless of what it's history is.

 

[Steve C Cronin]

I just thought I would share this info I received today from the Basimakapouloi boatyard where my boat is right now.
"We would also like to inform you about the new sailing tax in Greece. A tax which we consider wrong and unfair as far as it concerns the boat owners which are not residents of our country. Without any doubts, this tax will bring the opposite results than expected because of the number of boats that will depart the country, if it finally comes in effect. For your information there are a lot of arguments coming from inside and outside the country which put pressure to the government to re consider. Until the time we are writing these lines nobody (not the port police office nor the tax office) has any information about it. There are a lot of difficulties to be settled in order non residents to be able to pay taxes in Greece (To do so you must have a Greek tax number -AFM-…..). However we estimate that it will take some time to settle all these issues therefore the new tax will not in come in effect very soon. For any new information we have about it, we will let you know."
It's clear that greek boatyards are very concerned and worried about a mass exodus . If I receive any new info from this source I can post it here.

Despite the rantings, expressions of personal hatred and other emissions of hot air on the subject, these are the exact attitudes of those who I speak to regularly in Greece - it SHOULD BE A TAX FOR GREEKS and Greeks ONLY.

Thank you Sir.

 

[1bobt]

Bob, no Tax number will be required. This was part of a reply I had from the Ministry of Shipping.

You do have the possibility to pay your levy on a monthly basis or make an annual payment (for the whole year) with a 30% discount. The levy is charged on parts of meters, as stated in paragraph 4 of your e-mail. An electronic payment facility will be available for EU Nationals without need of a Greek Tax Number.

Morning Chris
What I was saying was, the Tax should only be paid by those with a Greek tax number. Greek Citizens or people residing in Greece.

Its not going to happen, now the ministry knows that only 2-3% of foreign flagged boats will leave.

 

[Tony Cross]

Having been involved in the financial world for most of my working life and a VAT registered person since it's instigation, I can assure you that I am right. However, if a registered person goes on to sell an item by way of trade, he IS required to charge tax on the sales price of the item. If he buys assets for the purpose of using them in his business, pays VAT on them as "taxable inputs" which he subsequently re-claims but on down the line he becomes de-registered, the C&I will not seek to recover the tax previously reclaimed. Otherwise, I would owe them thousands!

I bow to your greater knowledge on that subject

The boat you mention, once it exits the EU as far as ownership is concerned, becomes an asset of that foreign owner so if he subsequently imports it to the EU it is then treated like any other import, regardless of what it's history is.

We researched this deeply when we bought our boat some years ago. They key point is that if a VAT paid boat is SOLD outside the EU it most certainly does loose it's VAT paid status. If it is subsequently re-imported into the EU, VAT can be charged again.

 

[Steve C Cronin]

I bow to your greater knowledge on that subject



We researched this deeply when we bought our boat some years ago. They key point is that if a VAT paid boat is SOLD outside the EU it most certainly does loose it's VAT paid status. If it is subsequently re-imported into the EU, VAT can be charged again.

Yes, indeed it does, for when it is sold outside the EU it effectively ceases to exist. What subsequently gets imported into the EU is an entirely seperate entity. That is why I avoid using the term "re-import"

 

[Chris_Robb]

Morning Chris
What I was saying was, the Tax should only be paid by those with a Greek tax number. Greek Citizens or people residing in Greece.

Its not going to happen, now the ministry knows that only 2-3% of foreign flagged boats will leave.

I am afraid that will be the case. All we can really do now is work to mitigate the costs and make it easy to comply with. Otherwise the solution is in individual hands - stay or leave - quite simple really.

If a bye-product of all this is the removal of what I call Bed blocking boats, then may be there will be a benefit in the end to us all.

 

[westernman]

Morning Chris
What I was saying was, the Tax should only be paid by those with a Greek tax number. Greek Citizens or people residing in Greece.

Its not going to happen, now the ministry knows that only 2-3% of foreign flagged boats will leave.

As you say that won't happen. The rich Greeks have their yachts registered via offshore cooperations. Therefore the registered owners' of those yachts are neither Greek citizens, nor resident in Greece, nor do they have a tax number. In fact with many schemes it is not possible to find out who the 'real' owners (beneficial owners I think this the proper legal term), as they may be hidden behind strawmen company directors and other schemes which make it impossible to completely follow the trail in many of the jurisdictions.

Hence the tax is on boats which are in Greece regardless.

 

[westernman]

Having been involved in the financial world for most of my working life and a VAT registered person since it's instigation, I can assure you that I am right. However, if a registered person goes on to sell an item by way of trade, he IS required to charge tax on the sales price of the item.

Not true.

You can zero-rate goods supplied to somone outside the European Union, or sent to someone who's registered for VAT in another EU country.

 

[Retired in Crete]

Morning Chris
What I was saying was, the Tax should only be paid by those with a Greek tax number. Greek Citizens or people residing in Greece.

Oh be very careful what you say. Stay in Greece for 6 months and a day and you are legally required to become tax resident and get a Greek tax number.

John

 

[jimbaerselman]

Its not going to happen, now the ministry knows that only 2-3% of foreign flagged boats will leave.

The Ministry gathered these stats from their boatyard surveys made in early 2012. That's why they're confident that not many will leave Greece, and why they do not believe the dire warnings about empty boatyards being made by marinas and marina associations. From the surveys came their estimation that €20,000,000 could be raised. That suggests a boat park of about 30,000 taxable boats, at an average of €700 each. This all looks pretty realistic . . . they did their sums ages ago when the first two attempts to raise the tax failed.

 

[Steve C Cronin]

Not true.

You can zero-rate goods supplied to somone outside the European Union, or sent to someone who's registered for VAT in another EU country.

I wasn't writing a VAT Guidebook!

 

[Sybaris]

there is a particular Grecofile who might just shop you to the authorities

I SEE; your stated location "Back in Greece". Another one who has perhaps "Gone native" and will hear nothing said against the place

You say "Grecofile" and "Gone native" in a very derogatory and condescending way. Can you explain to me what exactly is wrong with liking and being happy in a place where you spend a lot of time?

Perhaps you should consider the possibility that Victor Hugo was right in his quote which you use as your signature "Strong and bitter words indicate a weak cause"

Point in case:

How come nobody is calling YOU nasty names ... I COULD ask you to keep your nose out ... (and your little squirt sidekick) ... perfectly willing to be robbed by a foreign government for having the audacity to visit their country ... Poor little Greece, you are in SO much need! Here, PLEASE have what I have, please, take big handfulls of it, you needn't ask all your wealthy countrymen for another penny ... robbing us blind is a totally immoral way ... I will keep MY money for ME

Take care,
Per

 

[Sybaris]

I am hoping my new thread “Greek Tax (how will it affect you)” can be kept for information only and therefore turn here to explain why I personally don’t consider the new tax excessive.

I don’t consider it excessive because I know that there are many alternatives the Greek government could have chosen. A few examples would be charging in anchorages (see Croatia and US), increasing and enforcing harbour dues (see many other cruising areas), higher VAT rates for hard-stand storage, or high entry/exit fees with obligatory usage of agents adding an (oftentimes) excessive commission (Turkey). They need money and we just have to get over that fact.

Having first been sceptical to the tax, but then having thought about it and the alternatives I actually think the Greek government has chosen a very reasonable and pragmatic way to charge yacht that use Greek waters with this new tax.

Charging visitors to a country is nothing new. Bed taxes in hotels are very common worldwide, as are entry/exit fees. It is not money grabbing, but a realistic fee after all you will as a visitor be using part of the local infrastructure.

Cheers,
Per

 

[Steve C Cronin]

I am afraid, once again you are wrong. "Deemed VAT paid" is a very specific term which applies to boats that were 8 years old and in the state in question when that state entered the EU, or in the case of states already in the EC, 1992. So it applies to boats in the UK built prior to 1986 and for example in Croatia in 2013 that were built prior to 2005.

You are also confused about boats that are owned by a VAT registered entity where VAT is reclaimed as an input tax. They are not considered in any way as being "VAT paid", although no liability for VAT exists while they are owned by that entity. However, if it sells the boat, it must account for VAT on the sale value, which of course the buyer can reclaim if it is also a VAT registered entity, but not if the buyer is a private person. As already pointed out, any boat that then changes hands outside the EU, whether VAT has been paid or not previously can potentially become liable again if it re-enters the EU.

Anyway, none of this is relevant to the new Greek tax, which as already pointed out to you is a tax on usage (otherwise known as a circulation tax) and not on ownership and is payable irrespective of whether VAT has been paid or not.

I was NOT talking about a "Deemed VAT Paid" vessel but was talking about a boat with a VAT receipt being deemed "VAT PAid". Notice the difference?

 

[Steve C Cronin]

You say "Grecofile" and "Gone native" in a very derogatory and condescending way. Can you explain to me what exactly is wrong with liking and being happy in a place where you spend a lot of time?

Perhaps you should consider the possibility that Victor Hugo was right in his quote which you use as your signature "Strong and bitter words indicate a weak cause"

Point in case:


Take care,
Per

You obviously don't speak to or deal with the same Greeks that I do. I too like the place very much, spend nearly six months a year there and have many Greek friends both there and here in the UK. They know that this is NOT a circulation tax but a tax on assets to cover their natonal deficit and will no doubt employ some very clever ways to avoid it. We will, of course, as usual, behave like stupid and faithful Labradors and just lie down to it!

 

[Pavalijo]

A view from a distance

I have been watching this thread with interest as I am on the countdown to cast off and head south in 2015 - heading towards Italy/Greece/Turkey in my 11.5m yacht.

I do not wish to get involved in the debate as to whether the tax is fair compared to what happens in other countries. I have often thought how unfair it is that Europeans can travel on our motorways free of charge but that we have to pay tolls to travel on theirs (more of an issue to haulage companies). However my conclusion is that I don't want a federal Europe and so some disparities are an inevitable price of independence. It disappoints me to read the unecessary mudslinging on this forum and I think that both sides to the mudslinging need to have a good look at themselves. Dignified silence is the best response in my view.

I am surprised that the CA does not seem to be making much representation regarding the inflexible charge for the sub 12m category. I would anticipate spending on average around 2 of my 5 sailing months a year in Greece, and accordingly would be charged the same as if I were in a 20m yacht. This hardly seems fair.

Somewhere in this mamoth thread Jim B did refer to the tax as (from memory) "carefully thought out" OWTTE. That stuck in my mind as plain wrong! Whilst I will have no objection to paying a fair tax in Greece, given what appears to be an otherwise low cost to cruising there, I cannot agree that there has been much intelligent thought here. The sudden jump at 12m is most unfair to those a fraction over that, but the inability to those just below to pay monthly is equally unfair. I may have to add a 51cm bowsprit and get my SSR registration at 12.01m. Hmm - on second thoughts I then lose out on marina charges!

My conclusion - a reasonable idea but if this is how Greek politicians conduct their affairs there is no wonder they are in such a mess.

I would welcome JimB's response to my issue and confirm whether the CA has made specific representations on this point?

Will continue to "lurk" with interest!

 

[BrianH]

Having castigated the Croatian authorities for years in these forums for their mercenary qualities in regard to visiting yachts, I never would have thought I would now be holding them up as an example. But unlike the new Greek tax the annual Croatian vignette (now discarded) was always for twelve months and not a calendar year. At least the autumn visitor had the chance to get value by again entering the next year before the 12 month period had expired.

Also, to compare with "Bed taxes in hotels" is far from the mark; the present Croatian 'Sojourn Tax' as now applied to visiting yachts, adapted from their earlier 'Kurtaxe' and based on the so-called hotel bed tax, despite being calculated on length and therefore on a fictive crew for this single-hander, is at least dependant on the actual time spent in the country's waters, not a blanket twelve-month fee.

All the claims of an unfair tax are predominately from those who keep their boats full time in Greece. However, the greatest unfairness comes with what I have previously practised, viz., to cruise from the Adriatic to the Ionian for a couple of weeks and return in my 31' yacht. For that modest cruising I would have to pay €300 for that short period - a significant extra cost on my fixed income. Even the Croatian Balkan Bandits never had such piratical expectations.

 

[jimbaerselman]

I would welcome JimB's response to my issue and confirm whether the CA has made specific representations on this point?

The CA has suggested the monthly charge is extended to <12 boats. We used the extreme example of the Kastellorizon effect. Kastellorizon relies on day visitors from Turkey for its livelihood. A percentage of these are small yachts which stay for two or three days. Business from <12m yachts will be lost with charges of €200 and over for a visit.

We have only a very informal reaction to this request so far. One is that small charges are not worth the effort of gathering and policing. Another is that the summer Italian invasion of smaller craft will not be put off by this charge. Also, we're aware there has been a lot of internal debate about the sub 12m class, resulting in some in-penetrable wording of the law which relieves two categories of under 12m motor craft from any payments. Given this history, I rate our chances of achieving this change as quite low.

Our main efforts are being directed at ensuring this tax becomes a replacement for the existing bureaucratic travesty of port police reporting and payments. A result is that a new law is being prepared, and this aims to reduce the bureaucracy affecting leisure boat cruising in Greece.

 

[Pavalijo]

The CA has suggested the monthly charge is extended to <12 boats.

Thanks JimB, glad to hear it - I just didn't see much if any mention of it and have read most of the 1,000 plus posts! I just cannot comprehend how any sensible person can view the change at 12m fair - for those below it or indeed just above. I would imagine that an unfair tax creates a new group of tax dodgers.