pre 1985 boats and EU VAT

[charybdis55]

Probably my age but I'm trying to understand the deemed as VAT paid status of pre 1985 boats. YBW published an article that defined a scenario whereby boats built before 1985 and had evidence they were in EU waters (UK included) at 23:59 31/12/1992 were deemed as VAT paid.

Its the last paragraph of this article I don't get : Once in "Free Circulation" a yacht built before 1/1/1985 is treated as any other boat in connection with Brexit related changes in VAT status arising from location on 31/12/2020.

So in my case, I'm on a pre 1985 boat and entered the EU Aug 2021 and have remained in the EU since then. I have both the original invoice from when the boat was first sold new in the UK in 1993 and a berthing invoice from a UK marina for the period Oct 1992 to Mar 1993.

Is my boat deemed as EU VAT paid and if yes, is there an EU Directive / Article I can reference to support this?

I would guess that "Brexit related changes in VAT status arising from location on 31/12/202" voids the VAT paid status of pre 1985 boats. If the boat was in the UK 31/12/2020 it retains UK VAT paid status, likewise in EU waters on the 31/12/2020 it retains EU VAT paid status. So what purpose is the pre 1985 VAT paid status and can it be applied anywhere?

 

[Tranona]

Simple as far as I can see. It was in the UK on 31/12/2020 and is therefore a UK VAT paid boat, not EU. It is therefore in the EU under temporary admission and the nominal 18 months is getting close. You have 2 choices - leave the EU after 18 months and re-enter or pay EU VAT and it becomes both EU and UK VAT paid. You can then retain the UK VAT paid status by returning every 3 years using the Returned Goods relief.

 

[Graham376]

I had a discussion with Policia Maritima about proving my boat was present on B day. Their stance was that a boat present on that day maintained it's status, whatever that was. I agree with Tranona. In your case you weren't present and entered the EU during August 2021 so, not EU VAT paid and subject to 18 months TA or, pay VAT.

In practical terms though, unlikely you will be asked to prove status on an old boat.

 

[charybdis55]

Simple as far as I can see. It was in the UK on 31/12/2020 and is therefore a UK VAT paid boat, not EU. It is therefore in the EU under temporary admission and the nominal 18 months is getting close. You have 2 choices - leave the EU after 18 months and re-enter or pay EU VAT and it becomes both EU and UK VAT paid. You can then retain the UK VAT paid status by returning every 3 years using the Returned Goods relief.

Thanks for the reply. Still puzzled where the pre 1985 deemed as VAT paid status could be used or is it just a myth?

 

[charybdis55]

I had a discussion with Policia Maritima about proving my boat was present on B day. Their stance was that a boat present on that day maintained it's status, whatever that was. I agree with Tranona. In your case you weren't present and entered the EU during August 2021 so, not EU VAT paid and subject to 18 months TA or, pay VAT.

In practical terms though, unlikely you will be asked to prove status on an old boat.

The customs here in Italy are asking just that, they're saying pay the VAT or leave the EU after 18 months.

I'm going for EU Returned Goods Relief based on: The boat was briefly in France July 2019 and returned to France Aug 2021. As this was within the three year period, it should qualify for EU RGR.

 

[Tranona]

Largely irrelevant. The pre 1985 status dates back to the Lisbon treaty and the creation of the single market. The point about VAT "status" on the single market is that it allows free circulation in the market. The treaty rules allowed boats originally sold within member states over 7 years previously to be "deemed VAT paid" even though many states did not have VAT then, so therefore permitted free circulation. This date only applies to the original members as those who joined later also had the 7 years previously rule but of course is a different year. All that comment is doing is confirming that status still applies, so if your boat had been in the EU on the day it would be EU VAT paid and have free circulation. For your boat the status still applies in the UK because that is where it was located on the day.

You cannot use that to override the change in status on 31/12/2020.

 

[Tranona]

The customs here in Italy are asking just that, they're saying pay the VAT or leave the EU after 18 months.

I'm going for EU Returned Goods Relief based on: The boat was briefly in France July 2019 and returned to France Aug 2021. As this was within the three year period, it should qualify for EU RGR.

No, you cannot do that. The fact that it was in France in 2019 is irrelevant. The withdrawal agreement determines the current VAT status. Italian customs are correct - after your 18 months you have to either import the boat or leave - although they might be generous and allow you an extension if it is difficult to leave before the crunch day. Your boat will always be a third country boat unless you pay VAT, which on an old boat is likely to be low. You are lucky in one way in that the EU retained the pre 1997 exemption from the RCD (unlike the UK) so you won't have to certify the boat.

 

[dunedin]

Thanks for the reply. Still puzzled where the pre 1985 deemed as VAT paid status could be used or is it just a myth?

Not a “myth” but just now irrelevant in your case. As ever, Tranona in post #2 is spot on, AFAIK.

 

[charybdis55]

No, you cannot do that. The fact that it was in France in 2019 is irrelevant. The withdrawal agreement determines the current VAT status. Italian customs are correct - after your 18 months you have to either import the boat or leave - although they might be generous and allow you an extension if it is difficult to leave before the crunch day. Your boat will always be a third country boat unless you pay VAT, which on an old boat is likely to be low. You are lucky in one way in that the EU retained the pre 1997 exemption from the RCD (unlike the UK) so you won't have to certify the boat.

Extract From EU EUROPEAN COMMISSION DIRECTORATE-GENERAL TAXATION AND CUSTOMS UNION:
The Brexit Guidance clarifies that, where Union goods were taken from the Union to the
UK before the end of the transition period and then such goods move back to the Union
after the end of that period, the provisions on returned goods referred to in Article 203
UCC apply if the economic operator can provide evidence that the Union goods were
transported to the UK prior to the end of the transition period and returned to the Union with three years. The goods must not have changed significantly and been exported and reimported by the same person.
Perhaps its my external optimism but I can fit the above to my scenario.

 

[Tranona]

But your boat is not "union goods" just because it happened to be in France for a short period in 2019. That would apply then to all the boats that visited the EU from the UK in the transition period which is clearly not the case.

From what you say your boat is a UK (third country) boat being imported into the EU and the only relief available (and this is only for third country residents) is temporary admission which you are currently using. Once you pay EU VAT it becomes union goods and you can use RGR in both the UK and EU.