Non VAT paid boats visiting EU

[mikehibb]

My UK SSRd boat is in Turkey and is Not EU VAT paid.

Although I am very happy with our current cruising grounds, in the next year or so I would like to pop over to Greek waters.
Most likely just Kos to start with, then further afield.

As usual I have been told, no probs at all as I have SSR and wear a red duster I should not be stopped or checked for VAT.
Also heard many "every one does it no probs" replies.

However I was wondering what the real story is.
I assume/hope that there must be an allowance of "number of days" that I can visit EU waters without having to pay VAT, is this true?

The boat will be returning to Turkish waters as its main base.

Just a bit worried about a trip to Kos costing me 18% of boat value, as I am in Yalikavak it should only cost me a couple of litres of diesel if the wind is favourable, a couple more if not.

If VAT man gets involved then it will obviously be a no go.

As allways thanks in advance to all genuine help, even more thanks to a good humorous reply.

Mike

 

[silas]

non vat paid boats in eu

Hi Mike. We have a yacht that is aussie registered and non vat paid (we have dual citizenship with the UK) we have happily cruised the med (eu waters for the last 16 months). The rules as we understand it are that you are allowed to temporarily import your yacht into the eu for up to 18 months then you must leave for 6 (we are currently having 6 months in croatia). The only place anyone was interested in vat status was the UK and we blame that on a customs and excise trainee! Noone else (france, portugual, spain, italy) has been worried about vat. They have been wanting insurance and skippers licenses but not VAT documents.

The Heikell cruising guide seems fairly comprehensive and on the safe side of advice regarding vat issues. There is also some good advice from an american (try googling s/v whoosh) for advice on vat issues. Now, I realise that you are UK flagged but I was under the impression that you are allowed at least 6 months (I thinkI read that on the HM customs and excise website - if you are an eu citizen and want to temporarily import boat into eu.) However, how this relates to issues in greece is beyond me. The whole subject is a minefield but I think you would be extremely unlucky to have someone really question you. I have no idea whether any of this will be of help but good luck anyway.

 

[Tranona]

Registration is irrelevant. It is the nature of the "transaction" that determines whether VAT is payable. Non EU residents (again citizenship is normally unimportant) can apply for temporary importation without paying VAT - valid for normally 18 months, but with use restrictions.

EU residents importing a boat (or any other asset such as a car) into the EU have to pay duty and VAT at the first country of entry. There are reliefs if you are a returning citizen re-establishing residence in the EU, but limited applicability. So the bottom line is that you are liable to pay VAT. For more detail see the RYA site which has a good summary of the rules.

As to whether you would ever be "found out" is another matter. It is not true that it is only the UK that is touchy about VAT - try telling that to the Dutch for example. However they are more interested in identifying importers who are trying to avoid paying the tax. It seems that the authorities in most EU countries are not interested in checking VAT on cruising yachtsmen, partly because there is no legal requirement to carry evidence and partly because any VAT issues would be the responsibility of the country of residence of the owner.

So I doubt you would experience any problem going in and out of Greece. However if you sold your boat to an EU resident for use in the EU, the buyer would expect you to pay the VAT or reduce the price to allow him to pay.

BTW the 6 month period referred to by silas is where you are EXPORTING a new boat from the EU where you have a period of grace, to cover for example commissioning and preparation before you become liable for VAT and is strictly controlled by HMRC for obvious reasons.

For Greece the documents required are the normal - SSR, Bill of Sale, Insurance, passports, and an ICC is useful. You will also have to get a DEKRA which is a cruising log at the first port of entry. Big piece of paper but no big deal. All EU boats need it including Greek.

 

[jimbaerselman]

The law is clear. If you have an SSR, you are an EU resident (a condition of its issue!). If an EU resident imports a non-VAT paid boat into any EU country, it must be declared to customs and VAT must be paid. So, you are at risk of both paying VAT and incurring a fine if you avoid declaring the boat.

However, how likely are you to be detected?

1. Inspection of VAT papers and bills of sale by officials are very rare indeed, and only likely in the event of some incident causing third party damage.

2. Check the small print on your insurance policy covering valuations and VAT. Errm. I'm sure they're aware you're not VAT paid, so your cover may not be valid for cruising in the EU, and they may not issue a Greek language certificate. Alternatively, of course, they may think you're VAT paid, in which case it's questionable whether they'd pay up.

3. Any vessel changing hands outside the EU (wherever it is registered) loses it's VAT paid status (if it had it). Customs officials bordering Croatia and Turkey are aware of this, and very occasionally ask where you bought the vessel.

4. If you sell the vessel, the first question the buyer should ask is for proof that VAT has been paid. You won't be able to sell it within the EU unless you tell a lot of porky pies, do a neat bit of forgery, pay VAT on entry, or find a gullible buyer.

Those risks make the whole thing a no-no for me. Better to add value to your boat by importing it and paying VAT. You then have a much wider range of potential buyers, willing to pay a higher price, when old age snips your agility down to being a canal barge captain.

Once again, thanks to the Cruising Association for allowing me to use some of their material.

 

[mikehibb]

Thanks all for the help so far.
I must reiterate that I only want to visit an EU port as a guest.

I fully understand that if I want to import it then I have to pay duty etc. I will hopefully be upgrading in a few years time anyway, so will wait until I have the next one before importing.

An EU owner with an EU registered boat (ie UK SSR in my case) can legitmately own a NO VAT paid boat as long as it is kept outside of EU ( and the transaction was outside EU).

The crooks of the question is can the above mentioned visit EU ports for a limited time as guest/visitor or not.

As I said earlier I am quite happu with my cruising ground, boat was bought with No VAT, and VAT has been factored in my budget if I choose to import. Just want to visit at the moment.

Regarding insurance, that is all above board (sorry for the pun) I do have greek translation etc. Insurance company had a copy of bill of sale clearly indicating value without VAT.
When I spoke to them last they said no probs, they only pay out insured value anyway, ie my VAT less value. If I import and pay VAT then All I need to do is send in copy of VAT cert to upgrade the insurance value.
I would need insurance cover anyway to enter EU before I got to port to pay VAT.(sorry that is digressing and off topic)

Once again.

Any help greatly appreciated.
Might take ferry over to Kos next trip for a day out and ask the authorities there.

Only problem with that is that I can not take SWMBO with me for the day trip, she in Non EU and would need to get a Shengen Visa. Actually choosing Turkey for Holiday home and boat was because it makes it a lot easier for her being a Georgian (no visa required for her)

Why is my life so full of complications.

Still plenty of Turkish waters for me to check out, enough for a couple more years actually, so no rush.

Cheers all

Mike

 

[Tranona]

Once again the registration is is irrelevant from a VAT point of view - and is nothing to do with EU, but is an International requirement under a UN resolution. It is your residence and the boat that are important. If you are EU resident then you cannot operate legally a non VAT paid boat in the EU. End of story. There are no temporary concessions such as those available to non-EU residents. Thinking about it - why should you be allowed to have a boat in the EU without paying VAT and the rest of us can't? The quid pro quo of not paying VAT is that you have to keep your boat outside the EU. Can't be fairer than that.

Don't think you will get any joy out of asking any officials in Greece. The best you will get is shrugged shoulders, the worst if they are having a bad day is enforcing the law - and you don't want that!

So, if you do want to pop over to Greece you have the same documentation that any other UK yacht is normally asked for and you may consider it worth taking the risk, but in the knowledge that if you are "caught" it could be expensive!

Anyway, if you hang around long enough Turkey will be in the EU and there may well be transition arrangements that results in your boat being deemed "VAT paid" as happened in the rest of the EU for certain categories. Depends probably on how desparate the EU is for Oil coming through Turkey!

 

[goboatingnow]

just to second that "tranona" is spot on. You are not entitled to any "Guest" status in the EU if you are a EU Tax resident/Citizen. End of story

 

[Bajansailor]

I have just been having a look at the Customs Regulations on line - a few years ago I picked up one of their booklets at Southampton Boat Show, as I was keen at the time on sailing our boat back to the UK.

Section 4.11 is interesting :-
http://customs.hmrc.gov.uk/channels...CE_CL_000289&propertyType=document#P168_18857

This does not mention anything about the Registry of the vessel.
I asked the chaps on the HMRC stand about this, and they scratched their heads, a bit perplexed, and agreed with me then that it appeared that I would be able to import my vessel free of duties (she was built in the UK, VAT was paid on everything by the previous owners, but she was then sold in the Caribbean, ie outside of the EU).

Perhaps if Registry is an issue, then would it be possible for Mike to re-register his vessel to somewhere else (perhaps a 'flag of convenience') for 6 months prior to importing the vessel into the EU?

 

[Moscowman100]

Same situation; Russian wife (with UK Right of Abode but non-resident). I was advised to register her as owner or joint owner and then SHE can bring the boat into the EU. The SSR is a complication as essentially you have certified that you are both EU resident for tax as a condition of issue - however, this is a very grey area for a non resident spouse of an EU citizen.
Bottom line - you are (say) 90% safe just going as you are. Adding your wife to the SSR will add a small extra safety margin but it will never be 100%. Paying EU VAT need not be as expensive as you might think - I am told that you can obtain some very creative VAT valuations in Rhodes or Cyprus and this will add value & resale flexibility.

 

[Squeaky]

Good morning:

"Might take ferry over to Kos next trip for a day out and ask the authorities there."

I hope you don't end up bothering the authorities in Kos with such questions. There is a good possibility that the man on the desk won't know the answer in any case but if you push it and force the higher ups to give you a definitive response we might well find that every boat arriving in Kos will probably be questioned for the balance of this season.

I am a great believer in letting sleeping dogs lie.

Cheers

Squeaky

 

[mikehibb]

Best let them lie.
Thanks all for advice.

 

[Tranona]

I have just been having a look at the Customs Regulations on line - a few years ago I picked up one of their booklets at Southampton Boat Show, as I was keen at the time on sailing our boat back to the UK.

Section 4.11 is interesting :-
http://customs.hmrc.gov.uk/channels...CE_CL_000289&propertyType=document#P168_18857

This does not mention anything about the Registry of the vessel.
I asked the chaps on the HMRC stand about this, and they scratched their heads, a bit perplexed, and agreed with me then that it appeared that I would be able to import my vessel free of duties (she was built in the UK, VAT was paid on everything by the previous owners, but she was then sold in the Caribbean, ie outside of the EU).

Perhaps if Registry is an issue, then would it be possible for Mike to re-register his vessel to somewhere else (perhaps a 'flag of convenience') for 6 months prior to importing the vessel into the EU?

4.11 is very narrow as it only applies to someone changing their residence from non-EU to EU.

If your boat was sold to an EU resident who then wanted to bring it into the EU it would be subject to VAT.

It is the resident status that is the key. Residents may re-import a VAT paid EU boat PROVIDED they are the person who took it outside the EU.

VAT is always about the nature of the transaction, not the asset.

As many have said, registration is irrelevant. In UK there is no compulsion to register and the main register (SSR) only provides an identity number and a self declared owners name. The rules are that you have to be UK resident (but not necessarily citizen) so it is an indicator of ownership, but not proof. The only document that proves ownership is the Bill of Sale and if the boat is on the Part 1 register it shows the ownership is formally registered.

Just to clarify further, the only reason for having registration is to show that your boat is covered by UK registration requirements in respect of equipment and crewing standards. Therefore other countries will not require you to meet their requirements. The extra registration requirements of the Part 1 are therefore optional but have value for some, particularly the ability to formally register a financial interest against the boat.

 

[Observer]

Any help greatly appreciated.
Might take ferry over to Kos next trip for a day out and ask the authorities there.

Rule #1 - never ask a bureaucrat a question you don't already know the answer to.

Rule #2 - (always subject to rule #1) never ask a bureaucrat a question in such a way that permits a response other than the one you want to hear.

Rule #3 - rules #1 and #2 also apply to lawyers.

 

[dannes]

Non EU company registered boat

Hi,

Do you think that a boat registered in the name of a US company (which I happen to own in Florida but this is irrelevant, me being an EU resident), US registered in Florida, while sailing in EU waters non commercially would be considered as required to pay VAT?

I plan to sail the boat myself and maybe store it for winter in a non-EU harbor such as Croatia or Turkey.

I think it shouldn't be subject to any VAT requirement but would like to hear other opinions too.

Thanks,
Dan

 

[Tranona]

Hi,

Do you think that a boat registered in the name of a US company (which I happen to own in Florida but this is irrelevant, me being an EU resident), US registered in Florida, while sailing in EU waters non commercially would be considered as required to pay VAT?

I plan to sail the boat myself and maybe store it for winter in a non-EU harbor such as Croatia or Turkey.

I think it shouldn't be subject to any VAT requirement but would like to hear other opinions too.

Thanks,
Dan

Bears repeating again. The registration of the boat is irrelevant. It is the RESIDENCE of the "importer" that is important. If you, as an EU resident bring a boat into the EU you are liable for both VAT and ensuring it complies with the RCD.

Read this thread again. It has all been said already.

 

[s/v moondancer]

It is as 'Tranona' says It is the residence status of the owner that is determinative And that does not mean just living outside the EU, you need a legal residence and if you don't have one then your 'residence' is to quote the UK VAT office..."where your affections lie" The VAT office says there is no connection between registration and VAT status, again it is the owner's status


ie once a Brit always a Brit unless you can prove otherwise.

VAT form C 104 allows a Brit to bring a boat into UK without tax if he has been resident abroad for a year and is returning to live in the EC. The boat needs to have been owned and use outside EC for 6 months and the owner to have legally have lived out of the EC. It apppears that cruising a Brit boat is equivalent to living in the EC.

I plan to do this but even with a foregiveness note from the UK I am not confident the rest of the EU will honour it.


http://customs.hmrc.gov.uk/channels...HMCE_CL_000289&propertyType=document#P85_8648

 

[goboatingnow]

Vat C104 form is just the UKs implementation of the EU ( the EC is long gone) wide TOR process ( transfer of residence). It will recognised in any EU country

 

[dannes]

Bears repeating again. The registration of the boat is irrelevant. It is the RESIDENCE of the "importer" that is important. If you, as an EU resident bring a boat into the EU you are liable for both VAT and ensuring it complies with the RCD.

Read this thread again. It has all been said already.

Hi there,

I don't think it is the same thing thou.
If the owner is an US company, which has a legal existence of its own, then the owner is an US "resident" in my opinion - the company, and not me - an EU resident, who happens to sail the boat.
I am not talking about importing the boat in any way (and I hope sailing the boat into EU waters does not equal "importing" - which should be common sense imho since otherwise any ship under any pavilion should be imported to EU just to deliver the goods it carries if say the captain is from EU...

Thanks
Dan

 

[Tranona]

Hi there,

I don't think it is the same thing thou.
If the owner is an US company, which has a legal existence of its own, then the owner is an US "resident" in my opinion - the company, and not me - an EU resident, who happens to sail the boat.
I am not talking about importing the boat in any way (and I hope sailing the boat into EU waters does not equal "importing" - which should be common sense imho since otherwise any ship under any pavilion should be imported to EU just to deliver the goods it carries if say the captain is from EU...

Thanks
Dan

But, unfortunately as far as I know a "company" cannot apply for temporary importation for private use. Temporary importation is personal to a non-EU resident and usage of the boat in the EU is limited to personal and private use for the individual and their family.

VAT is related to the nature of the transaction, not the ownership of the asset. If you are EU resident and you bring a boat into the EU you are liable to pay VAT. As I said in an earlier post on this thread why should you be able to avoid paying VAT when every other EU resident in a private capacity has to pay?

And, yes, sailing in EU waters is the same as "importation". The actual term used is "putting into use".

Remove the US connection and imagine what would happen if your interpretation is right. Everybody in the UK would have their boat owned by a Channel Islands company and use it in France or UK or wherever suits them! As it is, Channel Islands residents can do this, but only under the temporary importation rules.

I suspect there is a bit of wishful thinking going on here, but by all means check with HMRC. There is also a good easy to read explanation of the rules on the RYA site.

 

[HinewaisMan]

Oh God, just getting my head around Schlengen and then read this tread.

Us, circumnavigation from Oz - now in Turkey - but no fixed idea of where we might end up.

Me, Brit and Oz passports, Mrs Hinewaisman Oz only.

The yacht is Australian registered, owned by an Australian company, which we do not personally own (albeit - our family trust's do).

A few questions:

1) My understanding was that we would have no worries sailing the yacht in the EU as long as we kept to a max of 18 months - this is the first time I've heard there may be problems with a company owned yacht;

2) and that there was no time limit on exiting the EU - ie pop over to Turkey, Tunisia, Iceland - depending on where you are - for a day or two. Just get proof the yacht has exited - marina receipts, stamps in passports etc - and your 18 months starts again.

From what you are saying, this may not be so?

3) And another thought. Hypothetically, say when we get to the UK s a couple of years, fall in love with the old country and decide to stay. Say, this means importing the yacht - would you get hit with UK VAT or VAT based upon the rate of the country you first entered the EU?

The old brown envelope style of working with officialdom in Indonesia is looking quite nice now.

Thanks

P