Paying VAT in Carribean as a EU citizen owning a US vessel

[Heatherbell]

Hello everyone,

I have a small question that maybe someone could answer here. I bought a US registered boat and want to use it as a liveaboard vessel. I am a EU citizen, and would like to work in the Carribean on one of the French or Dutch Islands, as I can legally work there. Since Martinique and Guadeloupe for example are departments of France, do I need to pay VAT and import tax on my boat there (like in the EU) or can I go there freely and be a happy camper work there and be tax free what the boat is concerned?

Thank you.

 

[KellysEye]

As you say the two main French islands are full departments of France thus French/Euro laws applies - VAT is due on imported boats.

I'd be inclined to reflag to the UK or whichever Euro country you are/were in before going to the islands.

On the other hand the French islands don't seem to be that interested in yacht paperwork and you might get away with not paying VAT. I prefer to sleep at night though and wouldn't take the risk.

We have also heard that Dutch St Martin has cracked down on 'immigrant' workers. St Martin is part of the Netherlands Antilles and does not have the same government status as the main French islands and you have no rights as an EU citizen to work there. I don't know the status of French St Martin.

 

[Tranona]

You will have to in theory pay VAT in the first country you enter in the EU. I don't think you can claim temporary exemption because you are an EU resident. In theory the process is the same in all states, as is the method of valuation, although the method gives a choice of bases, but normally your purchase price if recent. The rates are similar. I do not know how strict the authorities out there might be.

On matters of principle, the RYA provides good information, even though many of the issues are not clear, particulalry in relation to proving payment on existing boats. It is however, very clear on importation.

Hope this helps.

 

[Oliveoyl]

Would the 180 day rule not apply? In which case French VAT would be due 180 days after entering Guadeloupe/Martinique. A short spell in non EU Caribbean waters before the end of the 180 days would set the counter back to zero.

 

[Tranona]

From memory, I thought the 180 day "rule" applied to boats built (or supplied) in the EU that were subsequently exported. This is different as it is an existing boat being imported.

I might be wrong and it is probably worth checking.

 

[Oliveoyl]

A Belgian friend, lives in Mexico, bought US flagged boat and brought it to the Med in June. Currently in Spain, but he aims to get it to Tunisia before his 180 days are up. Then another 180 days next summer before wintering in Croatia

 

[Koeketiene]

The French islands are departments of France - EU law applies. The official currency is Euro.

The Dutch islands are NOT part of the EU - EU law does not apply. Official currency is guilder (not the currency the Dutch used to have before the Euro).

A Dutch sailor coleague advised me to stay away from the Dutch Antilles (he had just finished a tour there). Lots of crime, official corruption is endemic.
The Dutch even offered them independence, and they refused it. Independence = no more subsidy.

 

[Troutbridge]

No No No. Sorry, all wrong. On behalf of a friend who exported a new boat from the UK VAT-free from the UK (registered in the UK) and was worried about visiting French islands (due to an IOM-registered boat being checked for VAT in Martinique). I rang UK Customs who said that although the French Isles are a department of France they are not part of the EU and VAT regulations do not apply. This info was confirmed by the boat agents in the UK.
What they do locally about import duty may be up to them, but if they come the old 'we are part of the EU' it's bollocks

 

[Koeketiene]

An IoM boat was checked for VAT on Martinique.
What interest would authorities on Martinique have in VAT if they were not part of the EU? /forums/images/graemlins/confused.gif /forums/images/graemlins/confused.gif

As to the status of the French islands in the carib, my first port of call would not be UK customs or UK boat agents but rather French Douanes.

 

[HoratioHB]

Right - as the bloke referred to by Troutbridge - this is the whole story.
Anchored of Schoelcher in Martinique. Late PM a large UK (IoM) ketch anchors near by. About dusk a Martinique Coastguard cutter anchors up and sends its RIB ashore to stop an illegal beach barbecue (on the way it runs over some fishermens nets and a real row starts up - great fun to watch!!). Once sorted the RIB goes over the the ketch and stays for several hours. The Coastguard cutter then stays overnight and leaves the next morning.
Later that morning a henchman on the ketch runs the owners ashore and I call to him on the way back. He says the Coastguard were querying the VAT status of the boat. He said that as an IOM boat they had some sort of agreement to pay VAT in stages and the owners had gone ashore to explain it to the local office.

At this stage I was in a mild state of panic as I had paid no VAT on my boat, as it was exported within 90 days - was I now liable for a bloody great bill???
I contacted my brokers and several friends as Troutbridge states. The uneqivocal answer from everyone (including HMRC) is that whilst being departments of France, the Caribbean islands are 'not in the EU for fiscal/VAT purposes'. My panic was over but to this day I do not really know what was going on with the IOM boat - maybe it was something else that they did not want to admit to, who knows.

I did have a link to the reference on the HRMC web site but can't find now - sure it can be accessed if needed.

Oh and I did not want to ask the French authorities in case I was liable!!!!! Now I have the answer from Blighty I am happy to defend my position if asked but I am not going to look for trouble.

 

[Koeketiene]

[ QUOTE ]

Oh and I did not want to ask the French authorities in case I was liable!!!!! Now I have the answer from Blighty I am happy to defend my position if asked but I am not going to look for trouble.

[/ QUOTE ]

So, after Troutbridge's 'You're certainly wrong' we're down to your 'I saw something happen. Now I'm not 100% sure (you didn't ask the French), but I think...'

At times I'm amazed about what's declared gospel on here, only to learn after some research that it's not exactly true.

A while ago I asked a question about registration of a yacht in the US as a non-US citizen (as away appeases Homeland Security) if/when I get posted there next year.
Was met by a barrage: this was impossible - a non-US citizen could noway, no how register a boat in the US.
Same post on a US board - half an hour later: perfectly possible, links to forms, how to do it and charges to pay...

 

[HoratioHB]

Guapa, I really don't understand your problem. I took advice from the UK Customs and Excise, as well as other sources what could be more certain than that. As I was unsure AT THE TIME - I kept my powder dry until I knew the real answer.


I state again the French caribbean islands are not part of the EU for VAT purposes - what is unclear about that???

Troutbridge and I were trying to answer the original question. If you don't want to believe us I can't stop you but I'm sure of my facts - go to the HRMC web site if your don't believe me.

 

[HoratioHB]

Right - found it and as its useful infor for many of us here, below is the relevant bit from VAT Notice 703:

Para 2.8 Which countries and territories are part of the EC Fiscal (VAT) area?
Austria
Belgium
Cyprus*
Czech Republic
Denmark, except the Faroe Islands and Greenland
Estonia
Finland
France, including Monaco
Germany, except Busingen and the Isle of Heligoland
Greece
Hungary
The Republic of Ireland
Italy, except the communes of Livigno and Campione d’Italia and the Italian waters of Lake Lugano
Latvia
Lithuania
Luxembourg
Malta
The Netherlands
Poland
Portugal, including the Azores and Madeira
Slovakia
Spain, including the Balearic Islands but excluding Ceuta and Melilla
Slovenia
Sweden
United Kingdom and the Isle of Man.
*The European Commission has advised that the application of the 6th VAT Directive (Directive 77/388/EEC of 17 May 1977) shall be suspended in those areas of Cyprus in which the Government of the Republic of Cyprus does not exercise effective control. Goods to these destinations continue to be eligible for zero-rating as exports.
top ^
2.9 Countries and territories outside the EC fiscal (VAT) area
The Aland Islands
Andorra
The Canary Islands
The Channel Islands
The overseas departments of France (Guadeloupe, Martinique, Réunion, St. Pierre and Miquelon, and French Guiana)
Gibraltar
Mount Athos
San Marino
The Vatican City
All other countries which do not appear in paragraph 2.8.

http://customs.hmrc.gov.uk/channelsPorta...ment#P124_10908

 

[Koeketiene]

I knew I would find it!

Below a link to the website of French C&E

http://www.douane.gouv.fr/page.asp?id=205

[ QUOTE ]


La taxe sur la valeur ajoutée (TVA) est applicable dans les départements de la Guadeloupe, de la Martinique et de La Réunion dans les mêmes conditions que sur le territoire métropolitain



[/ QUOTE ]

(Rough) translation: Value Added Tax (VAT) is applicable in the departments of Guadeloupe, Martinique and Réunion under the same conditions as in Metropolitan France.

When it comes to VAT in French territories, I'd rather believe French C&E than HMRC. But that's just me.

 

[Oliveoyl]

But the rate in the DOM is 8,5% - would be a dream for all boat importers - stop off in Guadeloupe/Martinique, import your US boat into the EU and pay only 8,5%.
Our PC is playing up something awful, but at work have access to lots of VAT documentation, where I'm sure I saw that French VAT is applicable to transactions between France and its DOMs, but not on imports into mainland EU.
Having said this, a mate considers his boat "VAT paid" because the point of entry into the EU of his Australian bought boat was Martinique

 

[KellysEye]

>A Dutch sailor coleague advised me to stay away from the Dutch Antilles (he had just finished a tour there). Lots of crime, official corruption is endemic.

I don't know what rattled the Dutch guys chain but the crime comment is so far from the truth it beggars belief. The Netherlands Antilles islands are regarded as the safest of all the islands and all the countries that surround the Caribbean.
If by official corruption he means politicians tell me a country that isn't corrupt. We have never met a corrupt customs, immigration or police official or been asked for a bribe by anybody in any of the NA. countries

>The Dutch even offered them independence, and they refused it. Independence = no more subsidy.

Again that's total nonsense. Aruba negotiated a high degree of independence (except for defence and a few other issues) after they discovered oil. There are ongoing negotiations between Holland and Bonaire/Curacao for example regarding the degree of independence. My reading is Bonaire wants to stay the same, Curacao wants more but the politicians on both islands are split on the subject.

 

[Tranona]

Think you are mixing up issues here. A non EU resident can temprarily import a non EU flagged vessel into the EU for up to 18 months subject to certain conditions such as it can only be used by the individual or family who are also non-resident. (HMRC Notice 200 - on the RYA site)

The 180 days in Spain are, I think you will find, related to whether the boat is liable to pay Spanish taxes.

Back to the OP, if he works in the EU he will probably be deemed resident in the EU, so all this is irrelevant and he will have to pay VAT, assuming the conflicting advice about Martinique is clarified!

 

[Oliveoyl]

Indeed the TI rules are 18 months. As to who's in and out of EU VAT, the official EU website has 3 categories of exceptions:
- territories of member states excluded from EU VAT territories - this excludes the French DOM, Guadeloupe and Martinique, and GB axclusions are Channel Islands and Gib

- Countries which are not part of the EU, but are deemed to be EU VAT territories (Monaco, IOM)

- countries which, though "belonging to" an EU member, are themselves not in the EU, therfore not part of EU VAT territories (French TOM, Dutch Antilles....

The OP could probably minimise his VAT bill by ending his TI period in a VAT friendly country (Cyprus 15%, Spain 16%), but probably well worth finding out on which basis the VAT is applied - I've heard that some Spanish VAT authorities are more lenient than others, and that in Greece its almost arbtitrary

 

[Tranona]

But he can only have TI if he is non-resident. excepting the exclusions where presumably he can keep the boat there as long as he likes without paying VAT, as soon as he becomes EU resident he will have to pay if he brings it into a VAT area.

The interesting issue would be whether working in Martinique as an EU citizen make him EU resident?

 

[Salty John]

"A while ago I asked a question about registration of a yacht in the US as a non-US citizen (as away appeases Homeland Security) if/when I get posted there next year.
Was met by a barrage: this was impossible - a non-US citizen could noway, no how register a boat in the US.
Same post on a US board - half an hour later: perfectly possible, links to forms, how to do it and charges to pay... "

Actually, you can't own or skipper a DOCUMENTED boat unless you are a US citizen. You can, in fact you must, State register your boat in the State it is mainly kept in.
State registration doesn't make it a US flagged vessel - Coast Guard Documentation does that - registration is only so they can collect the registration and use fee.