Payment of VAT in Greece ?

Plato

Please do as I suggest and read the HMRC Reference Note. Nowhere does it say that it is a legal requirement to have a receipt showing VAT paid.

The law on VAT is exactly the same for boats as it is for any other goods. Do you have to keep a VAT receipt for your car, or television or the new bathroom suite you have just bought for your house?

The ADVICE from HMRC is that if they suspect fraud the evidence they will accept that VAT has been paid is the original receipt. This is not unreasonable as there is no other record of payment - and after 6 years the person responsible for accounting for VAT (the vendor) can destroy his records. This advice, like the whole document comes with the health warning that it should not be read as law, but is their interpretation of the law.

This means it is open to challenge in the courts. However as far as I (and others who are much more knowledgeable about these matters than me) know this issue has never been tested in the courts.

It is unfortunate that this advice is interpreted in the narrow way that it is, particularly by such bodies as mortgage lenders, but despite the efforts of many lobbyists, HMRC do not seem inclined to clarify what this advice actually means.

You talk about random checks and people being "penalised" for not having this document. Please can you cite the cases with evidence where this has happened, or point me to the legislation that makes it an offence not to be able to produce the document. The examples you quote are fraud and the penalties are for fraud - not failing to produce a document.

Lets be clear, there will be cases of VAT fraud involving boats because of the nature of the asset and the financial incentives to evade paying VAT. This is quite right because the law is equal for everybody. But an ordinary citizen who has legally bought a boat is in no danger of being penalised just because he cannot produce a receipt. If, however, he has committed fraud - and I have given the most common examples of how this might happen he should be penalised.
 
Tranona, I've already cited you the instances and I've already not only read the HMRC guidance by posted the link.
Conclusion - you can lead a horse to water.......etc.
As I said, you won't have a problem because your paperwork is pukkah (from what you say).
It is (I maintain) irresponsible, however, for you to advise someone to set off with what he says is a non vat paid boat on a journey across the Med.
Voila,
:cool:
 
plato-gb said:
Tranoma, to return to VAT - all the legistlation - both from the EU and HMRC as well as other EU states and the RYA advice, states that you must carry proof of boat's vat status at all times.
I have given a few of the many documents that litter the internet regarding those who have been penalised because they didn't have these documents - either because the vat had not been paid on import or because the documents they did submit were not genuine. I have explained that HMRC did random spot checks on vessels moored in UK ports to get verification from boat owners on vat status.
There is ample proof, both legislative and anecdotal regarding this.
Why do you persist in your assertion that customs across the EU cannot/will not/do not demand proof of vat status?
:cool:
Click to expand...

Do you have proof of the VAT paid status of your house, your car?

Same situation.

I have bought property without paying VAT. Of course when I sell it I have to charge VAT on the selling price and pass that to the tax authorities.
 
Car registration in the UK covers this. If you take your car abroad and re-register, see below:

First steps to re-registration

There are no customs formalities if you're bringing a vehicle to France from another EU member state. However, you are supposed to go to your local tax office for a "certificat de régularité fiscale", which shows that you've already paid Value Added Tax (VAT) on the car at home.

If the VAT has not been paid, you'll be eligible to pay VAT in France.
http://www.expatica.com/fr/essentia...-cars-and-driving-licences-in-france-905.html
 
plato-gb said:
Tranona, I've already cited you the instances and I've already not only read the HMRC guidance by posted the link.
Conclusion - you can lead a horse to water.......etc.
As I said, you won't have a problem because your paperwork is pukkah (from what you say).
It is (I maintain) irresponsible, however, for you to advise someone to set off with what he says is a non vat paid boat on a journey across the Med.
Voila,
:cool:
Click to expand...

But as far as I can see all you have done is made vague, unsubstantiated references to cases where people have been penalised for committing fraud.

There is a world of difference between this and people being penalised for not having a VAT receipt!

If you are unable to see this difference than there is absolutely no point in continuing!

Just to state it again clearly.

If you import a boat into the EU you are responsible for paying VAT. If you fail to do so you have broken the law and can suffer the consequences.

If you are a VAT registered trader and you failed to account for VAT correctly in a transaction involving a boat then you have broken the law.

If you are a private citizen and EU resident and you have bought a boat legally from another EU citizen, you cannot be guilty of any VAT offence because VAT was not involved in the transaction. Possession of a receipt related to a previous transaction is irrelevant.

If you buy a boat from a VAT registered trader it is HIS responsibility for accounting for VAT, not yours. So again you cannot be guilty of any offence.

As to giving advice to others, nowhere does this conflict with the law. In the case of the OP, if he is correct in saying that he bought the boat from a private UK/EU resident then There is no need for him to have a receipt for VAT - because no VAT was involved in the transaction. If the sale was completed in the UK then any issues to do with VAT (if there were any) are the responsibility of UK HMRC and therefore of no interest to the authorities in any other country.

So, if HMRC believe an offence has been committed (such as a boat being inported from outside the EU or a boat that appears to be a business asset, but does not seem to be used for any business) then it is not unreasonable for them to write to the owner and ask for evidence that VAT has been accounted for properly. Clearly a receipt showing that VAT has been paid is likely to be enough to satisfy them in the case of an import. In the case of a business committing fraud they will want to see the records you are required to keep by law to record your VAT transactions.

I am not sure what you are trying to do here. If you are trying to show that individuals have been penalised for not having a VAT receipt I cannot find any cases in your posts. If you are trying to show that it might happen then I have found no reference in your posts to any law that says it is an offence.

Therefore everything you say on the subject is just speculation based on your own misunderstanding of the law.
 
Tranona said:
But as far as I can see all you have done is made vague, unsubstantiated references to cases where people have been penalised for committing fraud.

There is a world of difference between this and people being penalised for not having a VAT receipt!

If you are unable to see this difference than there is absolutely no point in continuing!

Just to state it again clearly.

If you import a boat into the EU you are responsible for paying VAT. If you fail to do so you have broken the law and can suffer the consequences.

If you are a VAT registered trader and you failed to account for VAT correctly in a transaction involving a boat then you have broken the law.

If you are a private citizen and EU resident and you have bought a boat legally from another EU citizen, you cannot be guilty of any VAT offence because VAT was not involved in the transaction. Possession of a receipt related to a previous transaction is irrelevant.

If you buy a boat from a VAT registered trader it is HIS responsibility for accounting for VAT, not yours. So again you cannot be guilty of any offence.

As to giving advice to others, nowhere does this conflict with the law. In the case of the OP, if he is correct in saying that he bought the boat from a private UK/EU resident then There is no need for him to have a receipt for VAT - because no VAT was involved in the transaction. If the sale was completed in the UK then any issues to do with VAT (if there were any) are the responsibility of UK HMRC and therefore of no interest to the authorities in any other country.

So, if HMRC believe an offence has been committed (such as a boat being inported from outside the EU or a boat that appears to be a business asset, but does not seem to be used for any business) then it is not unreasonable for them to write to the owner and ask for evidence that VAT has been accounted for properly. Clearly a receipt showing that VAT has been paid is likely to be enough to satisfy them in the case of an import. In the case of a business committing fraud they will want to see the records you are required to keep by law to record your VAT transactions.

I am not sure what you are trying to do here. If you are trying to show that individuals have been penalised for not having a VAT receipt I cannot find any cases in your posts. If you are trying to show that it might happen then I have found no reference in your posts to any law that says it is an offence.

Therefore everything you say on the subject is just speculation based on your own misunderstanding of the law.
Click to expand...
Tell him Stewart, stubborn, obstinate twot!
Stu
 
Tranona said:
If you are a private citizen and EU resident and you have bought a boat legally from another EU citizen, you cannot be guilty of any VAT offence because VAT was not involved in the transaction. Possession of a receipt related to a previous transaction is irrelevant.
Click to expand...

My understanding is slightly different. I think it is:

If you are a private citizen and EU resident and you have bought a boat in the EU legally from another EU resident [it is residence that is important, not citizenship], you cannot be guilty of any VAT offence because VAT was not involved in the transaction. Possession of a receipt related to a previous transaction is irrelevant.
 
This continues to be a thorny subject.

Regarding the OP if you were asking someone for advice that could be relied on legally (and I am not giving that here, this all just for information).

The only advice they can give you is that for free movement in the EU a vessel must have been vat paid and must carry the original vat invoice.


Sounds straightforward, but what happens if documents are missing?

Another EU Customs authority will not necessarily take the same view as HMRC regarding deemed VAT paid status.

Advice to it's members from ABYA is:

"In most cases you should only need to prove that VAT has been paid on your vessel when you are arriving in the EU from a non-EU country. However, in practice, some Customs authorities are asking all visitors to provide evidence of the vessel’s VAT status."

(Note a VAT paid boat that is sold outside of the EU and then returns under new ownership loses it's original VAT paid status)

The RYA have tried hard to get a definitive answer and have produced a document that is available from their legal department.


I've reproduced a part of the document below. It's based on questions raised by them to HMRC.


VAT is due if there is a chargeable event. This could be

1. When a vessel is supplied in the course of business by a
taxable person who is (or should be) registered for VAT.

2. When a vessel is imported into the UK from a place
outside the EU, and the importer is not eligible for a
relief of charges, import VAT must be paid by the person
or business importing the vessel. This includes cases
where the vessel is imported by rail, cargo ship or trailer.

3. When a UK resident buys a new vessel VAT free in
another EU Member State under the ‘new means of
transport’ arrangements, the vessel must be declared
on arrival and UK VAT paid.


RYA:I own a boat which I
believe is VAT paid, but I
don’t have any documentary
evidence, what do I do now?

HMRC:Without knowing the circumstances and the specific
reason(s) why the vessel’s owner is concerned about
the VAT status of the vessel, it is not possible for us to
comment, or to provide advice.

RYA COMMENT:
There is very little that can be done to rectify the situation.
The owner should attempt to locate previous owners in order
to trace the original or copies of the VAT documentation.
The paperwork no longer being in existence does not
remove the need for the owner of a vessel permanently
based in the EU to be able to satisfy the relevant
authorities (both here and across the EU) that the vessel is
VAT paid or ‘deemed’ VAT paid. However the RYA has little
evidence of UK registered vessels being stopped, simply to
ask them to prove their VAT status, whilst cruising within
UK territorial waters and those of other EU states.
In the unlikely scenario that the documents are not
available because the VAT was not paid at the time of the
chargeable event, the liability for VAT usually remains
with the person from which the monies were due (i.e. the
person involved in the chargeable event), even if the vessel
subsequently changes hands.
A new owner should however be aware that if they do not
obtain suitable proof that the vessel is tax paid at the time
of purchase, should they do something with the vessel
which results in another chargeable event (such as taking
the vessel to the Channel Islands), they will be unable, on
their return to the EU, to prove that they are entitled to
relief from VAT, the new chargeable event will over-ride
the un-paid liability and the new owner will be liable to pay
the monies due as a result of this latest chargeable event.
HMRC has the right to impose sanctions in the event of
unpaid VAT on a vessel; this may involve civil proceedings
against the person liable for the VAT payment. HMRC are
only likely to exercise the right to impose sanctions against
the person liable for VAT as a last resort. There is a time
limitation on HMRC enforcing sanctions but this is very
much dependent upon the circumstances of the case. If
HMRC take action against you as the current owner then
you may have recourse via civil action against the person
involved in the chargeable event.

So what really happens?

As I said at the beginning the only advice that can be given is that the vessel must be vat paid and the original vat invoice must be carried.

And I'm going to state again here I am not offering advice

But it seems to be rare to be challenged, and depending on the circumstances does not mean that VAT will automatically be levied, unless of course it is clearly VAT fraud.

But no one on here really knows how different Customs offices whilst overseas will interpret the regulations. And with no "chargeable event" what happens?

What I'm interested in is why the OP's vessel is not vat paid, did it come in from Turkey?

It's a little complicated by the fact that it is knowingly not VAT paid and we are not talking about a vessel that is deemed vat paid or has lost it's documents. From the OP he seems willing and able to pay any liability to clear it up.

When asked if a UK citizen could pay VAT to give a vessel vat paid status HMRC replied to the RYA:

NO A chargeable event (see A1) must occur in order for a
private individual to pay VAT. UK Customs can only accept
a VAT payment if the chargeable event occurs within their
jurisdiction.

When VAT is due in another Member State, it
should be paid there as that is the place it is legally due. In
such cases the vessel owner should contact the Customs
Authorities in the Member State concerned, or their
Embassy in the UK, for advice.
 
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bbg said:
My understanding is slightly different. I think it is:

If you are a private citizen and EU resident and you have bought a boat in the EU legally from another EU resident [it is residence that is important, not citizenship], you cannot be guilty of any VAT offence because VAT was not involved in the transaction. Possession of a receipt related to a previous transaction is irrelevant.
Click to expand...

Yes, you are right on both counts. That is why the Bill of Sale is so important. The HMRC Reference makes a specific point that it is the bill of Sale that determines the nature of the transaction and who is responsible for VAT (ie which state).
 
Thanks, Jonic for posting the RYA advice. However it should be noted that thousands of boats have never been liable for VAT because of their age or are "deemed VAT paid" by virtue of being in the EU on the appropriate date.

As to why the OP is asking the question about his "non VAT paid" boat there are three possible explanations. The first and most obvious is that all he means is that he does not have a receipt - he has yet to clarify this. The second is that the boat is too old and was never subject to VAT. If it was originally sold in Greece, then VAT did not come in until much later than in UK - one of the reasons why the transition arrangements created the odd "deemed VAT paid" category. The third reason I have explained previously. Prior to 2002 (and in some case later) boats sold out of the charter fleets were sold without VAT, although usually accompanied by a piece of paper saying that no taxes were due.

As I (and others) have pointed out on many occasions there is a difference between HMRC "advice" that the only proof they will accept is an original invoice and saying that it is an offence not to have the invoice. In the same way there is a difference between the authorities in another state asking for proof and being able to take any action. They can't because the law is quite clear that it is the responsibility of the state in which the transaction took place. As the RYA advice says, confirmed by other peoples' experiences there is no hard evidence that authorities in other EU states are demanding to see VAT payment "proof" from visiting UK yachtsmen.
 
The other possibility with the op's boat is that it has been out of the EU and has not come back in with the same EU owner who took it out.

If that is the case VAT paid status and deemed VAT paid status is lost as a new chargeable event has occured.

VAT and possibly import duty of 1.7% (if the boat is under 12m) can be levied by the first EU port of call. This also includes pre 1973 boats.

Of course this is irrelevant if the boat has not been sold whilst outside the EU.

We really need to know why the boat is being described as VAT not paid to give a full answer.
 
Tranona said:
Thanks, Jonic for posting the RYA advice. However it should be noted that thousands of boats have never been liable for VAT because of their age or are "deemed VAT paid" by virtue of being in the EU on the appropriate date.

.
Click to expand...

Quite right. And for those that don't know. (Part reproduction from ABYA document)

4.2 My pleasure craft was built before 1985. Do I need VAT documents?

Vessels that have evidence that they were in use as private pleasure craft prior to 1 January 1985 and were in the EU on 31 December 1992 are deemed VAT paid. Pleasure craft that meet the criteria will be treated as VAT paid and, subject to the other RGR conditions being met, will qualify for that relief when returning to the UK. Many other EU countries apply the same rules, but it is best to check with the relevant customs authorities before arrival there.
 
jonic said:
The other possibility with the op's boat is that it has been out of the EU and has not come back in with the same EU owner who took it out.

If that is the case VAT paid status and deemed VAT paid status is lost as a new chargeable event has occured.

VAT and possibly import duty of 1.7% (if the boat is under 12m) can be levied by the first EU port of call. This also includes pre 1973 boats.

Of course this is irrelevant if the boat has not been sold whilst outside the EU.

We really need to know why the boat is being described as VAT not paid to give a full answer.
Click to expand...

Yes, that is a possibility but that would be really tricky as the responsibility for collecting VAT would be the first state of entry into the EU. The only thing that would trigger of an interest is a Bill of Sale that showed the sale was outside the EU. Normally the authorities are only interested (if at all) in a BoS that establishes ownership by the current owner.

As you probably know there are boats in the UK (and I am sure EU) that have been imported and no VAT paid. Once they are sold on it is difficult for anybody to trace back unless they have the record of previous BoS, registration papers or other evidence that the boat has not always been in the EU.
 
Hi, I'm back. Sorry not to have answererd any of your questions but i work away a lot and dont have internet access. I seem to have sparked a bit of a debate about the vat situation. To clarify, I am a UK resident who purchased a non vat paid ex charter yacht from another uk resident who had owened it privatly for a few years previous. I have owned the yacht for Five years now and due to recession it is nolonger possible to keep a Yacht in Greece so i must bring it home. The yacht is now twenty years old and probably worth around 30,000 euro on a good day. The previous owner placed her on the SSR when he bought her from a broker in Greece. I will probably chance it homeward and have the money handy just in case i'm asked for it. Once again, thanks for your replies and sorry i did'nt get back sooner.
 
gregorymc said:
Hi, I'm back. Sorry not to have answererd any of your questions but i work away a lot and dont have internet access. I seem to have sparked a bit of a debate about the vat situation. To clarify, I am a UK resident who purchased a non vat paid ex charter yacht from another uk resident who had owened it privatly for a few years previous. I have owned the yacht for Five years now and due to recession it is nolonger possible to keep a Yacht in Greece so i must bring it home. The yacht is now twenty years old and probably worth around 30,000 euro on a good day. The previous owner placed her on the SSR when he bought her from a broker in Greece. I will probably chance it homeward and have the money handy just in case i'm asked for it. Once again, thanks for your replies and sorry i did'nt get back sooner.
Click to expand...

It does not sound like you own any body VAT, although maybe the previous owner does. But that is not your affair.

Keep the original bill of sale to hand (which should show that the boat was sold in the EU, from one private EU resident to another EU resident). If that is the case, that is all the proof you need to show that you do not owe any VAT.

The fact the it is already on the SSR means the likely hood of ever being challenged anywhere in anycase is very small.
 
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