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

[Tony Cross]

I've said this before but I'll say it again; even if every single non-Greek boat left Greece the tax would still be implemented. There are two reasons; the first is that this tax is one of several actions required of Greece by the troika of lenders for receipt of the most recent bailout tranche. The second reason is that the number of Greek owned boats in Greece massively outweighs the non-Greek boats, so although all non-Greek boats leaving might mean they miss the €20million target they won't miss it by much.

Non-Greek boats in Greece simply do not have the financial power to change the Greek government's mind.

 

[Bertramdriver]

I've said this before but I'll say it again; even if every single non-Greek boat left Greece the tax would still be implemented. There are two reasons; the first is that this tax is one of several actions required of Greece by the troika of lenders for receipt of the most recent bailout tranche. The second reason is that the number of Greek owned boats in Greece massively outweighs the non-Greek boats, so although all non-Greek boats leaving might mean they miss the €20million target they won't miss it by much.

Non-Greek boats in Greece simply do not have the financial power to change the Greek government's mind.

Whatever the logic of your comment we have nothing to lose by supporting the French, which I have just done.

 

[Caladh]

Whatever the logic of your comment we have nothing to lose by supporting the French, which I have just done.

Tony. I've been following the arguement by the CA for sometime now. Surely the thinking should be not be that "it's going to be implemented anyway....and the number of Greek owned vessels far outweigh......", but we prefer that it doesn't cover foreign flagged vessels ? I understand both sides of the many arguements promulgated here but can see why many people see the CA stance as somewhat ineffective.

 

[vyv_cox]

Tony. I've been following the arguement by the CA for sometime now. Surely the thinking should be not be that "it's going to be implemented anyway....and the number of Greek owned vessels far outweigh......", but we prefer that it doesn't cover foreign flagged vessels ? I understand both sides of the many arguements promulgated here but can see why many people see the CA stance as somewhat ineffective.

Presumably you sail in the Med, where it cannot have escaped your notice that thousands of boats with flags from every nation on earth are being sailed and quite probably owned by locals in many countries, and Greece in particular. Greek-flagged boats are already heavily taxed but in very many cases the tax is avoided simply by changing its nationality, very easily arranged if you have the right connections. Have you visited Oinouissa in summer? The quay is almost totally blocked in by huge mobos, all Dutch flagged but apparently without a Dutchman between them. Is it a coincidence that more shipowners live in Oinouissa than anywhere else in Greece?

 

[Retired in Crete]

Article 11 of Greek Law No 2743/1999 (Greek Government Gazette A 211) of 13 November 1999 introduced this tax on private pleasure craft entering Greek territorial waters which are more than 7m in length and which have no permanent mooring in a Greek port. The tax is levied each time a pleasure boat enters the country and approaches a Greek port, harbour or coast; the amount is calculated on the length of the boat and comes on top of any harbour dues normally levied. It is paid into the special account of the Harbour Police Fund.

As it is levied upon the crossing of a territorial line and does not relate to a service actually rendered to the person paying it this tax is a tax with equivalent effect to import duties contrary to Articles 23 and 25 of the EC Treaty. It is prohibited irrespective of whether it is levied on Community pleasure craft or third country pleasure craft (pursuant to Articles 23, 25 and 133 of the EC Treaty). Haize Egoa

So if I read this correctly it only applies when you enter Greek waters. As my boat has been in Greek waters prior to the introduction of the law then it should be exempt.

What is the definition of a "permanent mooring"?

John

 

[Caladh]

And your point is ? The EU needs to tighten the law up about tax avoidance in general and in our case "Nationals" being able to re-flag vessels to other countries to avoid tax. It still doesn't negate the CA stance on this matter - hence the more bullish French initiative. No I have not been to Oinouissa - from your short description it sounds awful.

 

[Glyka]

So if I read this correctly it only applies when you enter Greek waters. As my boat has been in Greek waters prior to the introduction of the law then it should be exempt.

What is the definition of a "permanent mooring"?

John

Article 11 of Greek Law No 2743/1999

 

[westernman]

And your point is ? The EU needs to tighten the law up about tax avoidance in general and in our case "Nationals" being able to re-flag vessels to other countries to avoid tax. It still doesn't negate the CA stance on this matter - hence the more bullish French initiative. No I have not been to Oinouissa - from your short description it sounds awful.

Big yachts are (almost) always owned by corporations which can be incorporated anywhere. There is no easy way to tighten up the issue of re-flagging vessels in such a way that it has any practical effect.

This is why the Greek law is a blanket law which applies to all vessel's in its waters. They have no other practical way to tax those Dutch registered vessels belonging to some offshore corporation whose beneficial owners are by some complex thread of ownership the rich local Greeks.

 

[Caladh]

...."There is no easy way to tighten up the issue...." - Precisely my point is that no one can be arsed to look at the "issue" and therefore it continues because it's not easy. Still, thats democracy I guess and we all follow the sheep in front.

 

[westernman]

...."There is no easy way to tighten up the issue...." - Precisely my point is that no one can be arsed to look at the "issue" and therefore it continues because it's not easy. Still, thats democracy I guess and we all follow the sheep in front.

Find an adequate solution to the real issue, and you might find that the Greek government will listen.

So how about something along the lines of:-

"All yachts in Greek waters will be taxed unless they belong to a private individual who is not resident in Greece."

(Note - no mention of flag or country of registration of the yacht).

I.e. all boats in Greece belonging to businesses or corporations regardless as to the state of registration of the yacht and the business/corporation will have to pay.

 

[Glyka]

Find an adequate solution to the real issue, and you might find that the Greek government will listen.

So how about something along the lines of:-

"All yachts in Greek waters will be taxed unless they belong to a private individual who is not resident in Greece."

(Note - no mention of flag or country of registration of the yacht).

I.e. all boats in Greece belonging to businesses or corporations regardless as to the state of registration of the yacht and the business/corporation will have to pay.

Right. I'm sure all these businesses won't be able to find an individual to "own" their yacht while a reversing, undated bill of sales remains at the businesses hands. How come nobody thought of it. Greece, a country full of idiots...

 

[vyv_cox]

No I have not been to Oinouissa - from your short description it sounds awful.

It's a lovely place. In mid-summer it becomes very popular, for precisely that reason. The mobos seem to be largely floating hotels.

 

[Tranona]

So if I read this correctly it only applies when you enter Greek waters. As my boat has been in Greek waters prior to the introduction of the law then it should be exempt.

What is the definition of a "permanent mooring"?

John

Note the date. That is an old law that was indeed ruled illegal by Brussels following protests by other EU states (including UK). Still applies to non-EU vessels. Not sure why our French friends are bringing it up - it is irrelevant to the new law.

 

[Peio64]

I think that in this matter, we have to be pragmatics and not to speculate too much.

Amongst the speculations, Tony Cross says that "this tax is one of several actions required of Greece by the troika of lenders for receipt of the most recent bailout tranche.". Maybe Tony has either confidential infos from the Troika or direct evidence of this statement coming directly from the Greek governement. If not, I think that we sould act as if this was not the case and to refer to the previous legal decision made by the EC in 2001 about a similar attempt of Greece to tax foreign yachts.

This is an other legal sticking point concerning the Greek tax. This is the principle of "non-double taxation" (i.e. "Situation where a country levies tax on an income that has already been taxed in the same or another country.")
I do not know what are the rules in UK concerning navigation taxes, but in France we already have to pay one every year (I just payed it last month). It concerns not only boats with French flag, but also boats with foreign flags whose owners (Frenchs or foreigners) have French residency (i.e. persons who are already subject to pay other taxes of any kind in France). A special over-tax (3 times the normal rate) is dedicated to those who have "flags of convenience".
Thus it seems that the Greek tax would conflict with the "non-double taxation" rule at least for those who have to pay a similar tax in their own country, what is our case in France.

IMHO, these two main objections are enough for protesting againt the tax whatever the reasons of its enforcing could be, good or bad, supported or not by the Troïka.

Peio
Haize Egoa

 

[jimbaerselman]

The Cruising Association won't be committing resources to challenging the new tax in court for two reasons.

First, more recent EU directives concerning "Means of Transport" (MoT) treats leisure boats, private cars and planes as one class. And it conflicts with the much older laws quoted. The older laws were designed for maritime commercial traffic, and arguably do not apply to the new class of small leisure vessels.

Second, if we were to push Greece towards conforming with MoT directives, the outcome for EU boats may be worse than existing tax proposals. The MoT directive allows that circulation taxes for MoT visiting other countries should not be levied (a) for the first 180 days (b) providing they have been paid in the country of registration.

If these two conditions have not been met, then the MoT must be (temporarily) imported, and that implies meeting all host country circulation taxes, and registration regulations. If it's temporary import, re-registration, as such, is not needed, but the appropriate paperwork, equipment and driving licence requirements will apply.

Sadly, British registered boats (and many others) don't pay circulation taxes, so (arguably) they would have to pay circulation taxes immediately on entry to Greece anyway. French registered boats would only have to pay from the day their French tax payment lapses, or from 180 days after entry, whichever occurred first.

These are the rules in operation throughout Europe in respect of cars, where they're enforced. For boats, they were enforced in Spain, particularly for people who became tax resident, whose transgressions were easy to identify. EU countries do not have to apply these regulations regarding boats. Greece has chosen not to, as far as leisure boats are concerned. This gives visiting boats enormous flexibility about how long they stay.

So there are good reasons (apart from not wanting to pay lawyers!) why CA has chosen to negotiate, rather than confront.

 

[Peio64]

Note the date. That is an old law that was indeed ruled illegal by Brussels following protests by other EU states (including UK). Still applies to non-EU vessels. Not sure why our French friends are bringing it up - it is irrelevant to the new law.

1) It was declared illegal also for non-EU vessels (http://europa.eu/rapid/press-release_IP-01-1103_en.htm?locale=en : "It is prohibited irrespective of whether it is levied on Community pleasure craft or third country pleasure craft")

2) Why is it irrelevant to the new law ? This new tax can also be interpreted as a "tax of equivalent effect", which is prohibited within EU.

 

[Tranona]

1) It was declared illegal also for non-EU vessels (http://europa.eu/rapid/press-release_IP-01-1103_en.htm?locale=en : "It is prohibited irrespective of whether it is levied on Community pleasure craft or third country pleasure craft")

2) Why is it irrelevant to the new law ? This new tax can also be interpreted as a "tax of equivalent effect", which is prohibited within EU.

There is still differentiation for non EU boats which not only have to pay for a cruising permit but are also limited in the time they can spend in Greece. The only relevance is that it shows a discriminatory tax on non Greek vessels is illegal, but the new law is not discriminatory, that is it applies to all vessels in Greek waters irrespective of state of registration or nationality of ownership.

It is only your opinion that it is a "tax of equivalent effect", and as Jim says in his explanation of the CA approach that argument does not stand up to scrutiny because there is not an equivalent tax in other EU states. So it is not a "double tax".

 

[Peio64]

There is still differentiation for non EU boats which not only have to pay for a cruising permit but are also limited in the time they can spend in Greece. The only relevance is that it shows a discriminatory tax on non Greek vessels is illegal, but the new law is not discriminatory, that is it applies to all vessels in Greek waters irrespective of state of registration or nationality of ownership.

It is only your opinion that it is a "tax of equivalent effect", and as Jim says in his explanation of the CA approach that argument does not stand up to scrutiny because there is not an equivalent tax in other EU states. So it is not a "double tax".

Sorry, but in France we are supposed to pay an annual "circulation tax for leisure boats" which looks very much like the new Greek tax (i.e. based on the lenght of the boat, over 7m, and also on the power of the engine if present). Thus, if I have to pay the equivalent Greek "circulation tax", I will be taxed twice on the same good (or use of it). This is forbiden by many international treaties, first of all UE treaty.

Second, the former Greek "circulation tax" applied to foreign yachts was well condamed by EU as a tax "of equivalent effect", i.e. a tax lieved at the border without any relation to a service rendered to the person paying this tax. This is clearly stated here :

http://europa.eu/rapid/press-release_IP-01-1103_en.htm?locale=en

Third, yes there is a different treatment of foreign yachts with non-EU flags, as it is in many countries. But not concerning the former "circulation tax" of 1999 which was abolished "irrespective of whether it is levied on Community pleasure craft or third country pleasure craft" (id.). Therefore, it does not "Still applies to non-EU vessels.", as you said in message #1196.

Incidentally, I wonder whether the DEPKA could be also attacked as far as it constitutes de facto a control on the circulation, circulation which is supposed to be "free" at least for the european citizens belonging to the Schengen Space (yes, I know : United Kingdom does not belong to this space )

Peio
Haize Egoa

 

[Peio64]

The Cruising Association won't be committing resources to challenging the new tax in court for two reasons.

First, more recent EU directives concerning "Means of Transport" (MoT) treats leisure boats, private cars and planes as one class. And it conflicts with the much older laws quoted. The older laws were designed for maritime commercial traffic, and arguably do not apply to the new class of small leisure vessels.

Second, if we were to push Greece towards conforming with MoT directives, the outcome for EU boats may be worse than existing tax proposals. The MoT directive allows that circulation taxes for MoT visiting other countries should not be levied (a) for the first 180 days (b) providing they have been paid in the country of registration.

If these two conditions have not been met, then the MoT must be (temporarily) imported, and that implies meeting all host country circulation taxes, and registration regulations. If it's temporary import, re-registration, as such, is not needed, but the appropriate paperwork, equipment and driving licence requirements will apply.

Sadly, British registered boats (and many others) don't pay circulation taxes, so (arguably) they would have to pay circulation taxes immediately on entry to Greece anyway. French registered boats would only have to pay from the day their French tax payment lapses, or from 180 days after entry, whichever occurred first.

These are the rules in operation throughout Europe in respect of cars, where they're enforced. For boats, they were enforced in Spain, particularly for people who became tax resident, whose transgressions were easy to identify. EU countries do not have to apply these regulations regarding boats. Greece has chosen not to, as far as leisure boats are concerned. This gives visiting boats enormous flexibility about how long they stay.

So there are good reasons (apart from not wanting to pay lawyers!) why CA has chosen to negotiate, rather than confront.

Maybe your first argument concerning, I imagine, the opportunity to call on Montego and Barcelona treaties is relevant. I do not know but I will verify it.

But your second reason for avoiding confrontation is everything except clear to me.
I do not see why "the outcome for EU boats may be worse than existing tax proposals".

Please suppose that we can obtain the complete alleviation of this painful tax :

- Boats visiting Greece for less than 6 months will not pay anything, irrespective to their nationality (that means including UK boats). This would concern a large majority of boats, I presume

- For boats staying annually in Greece, it would be 2 situations :

a) they are inhabited during more than 180 days by the same person(s). In this case, it is clear that these persons are actually "Greek residents" and, as such, are supposed to pay taxes in Greece, including this one. This is already the law and nothing would change for these persons if they respect the rules.

b) the owners (or other passengers) do not stay more than 180 consecutive days in Greece. Their fiscal residence is thus located in a foreign country where they pay their taxes, including for the French I am, the French circulation tax for leisure boats. In case the Greek tax would apply to these later persons, they should be liable to ask for a refund either of the French tax (in my situation) or of the Greek tax.

It thus appear to me that the implementation of this law does not favour living aboard persons which would have anyway to pay the tax, but that it would cause damage to boats visiting Greece for a short period and also to boats whose owner is not Greek resident.

In conclusion, I do not see any advantage for anybody, on the contrary.

Peio
Haize Egoa

 

[BurnitBlue]

Maybe your first argument concerning, I imagine, the opportunity to call on Montego and Barcelona treaties is relevant. I do not know but I will verify it.

But your second reason for avoiding confrontation is everything except clear to me.
I do not see why "the outcome for EU boats may be worse than existing tax proposals".

Please suppose that we can obtain the complete alleviation of this painful tax :

- Boats visiting Greece for less than 6 months will not pay anything, irrespective to their nationality (that means including UK boats). This would concern a large majority of boats, I presume

- For boats staying annually in Greece, it would be 2 situations :

a) they are inhabited during more than 180 days by the same person(s). In this case, it is clear that these persons are actually "Greek residents" and, as such, are supposed to pay taxes in Greece, including this one. This is already the law and nothing would change for these persons if they respect the rules.

b) the owners (or other passengers) do not stay more than 180 consecutive days in Greece. Their fiscal residence is thus located in a foreign country where they pay their taxes, including for the French I am, the Fench circulation tax for leisure boats. In case the Greek tax would apply to these later persons, they should be liable to ask for a refund either of the French tax (in my situation) or of the Greek tax.

It thus appear to me that the implementation of this law does not favour living aboard persons which would have anyway to pay the tax, but that it would cause damage to boats visiting Greece for a short period and also to boats whose owner is not Greek resident.

In conclusion, I do not see any advantage for anybody, on the contrary.

Peio
Haize Egoa

Thank you. I support you 100%. The stance of the CA in this matter is disgusting. They have decided that the fight is lost before the first shot is fired. Right now they and their Minions have taken the modern political view that for THEM it is a good feeling to be seen walking the ministerial corridors with a clipboard and help the Greeks to find an efficient way to extract the TAX from visiting yacht folk rather than stand and fight against his illegal money grab.

It is the modern British way to talk talk and compromise so I hope the French will demonstrate that this is a cowards way out and win this fight for all of us.

Thank you again. And please ignore the CA's cowardly justifications on this forum.