Question about VAT & the Canary Islands

[Kemp]

Hello all,

Please help me with the following question. I consider buying a boat, which is currently in Maroc. It is owned by Cayman Islands IBC and registered there, VAT is not payed. We would like to sail to the Canary Islands and stay there for some time. We are EU residents. The Canary Islands are outside the EC fiscal (VAT) area: “This Directive shall not apply to the following territories forming part of the customs territory of the Community: (a) Mount Athos; (b) the Canary Islands; (c) the French overseas departments; (d) the Åland Islands; (e) the Channel Islands.”

So could it be any questions/problems in the Canary Islands regarding boat's VAT status?

Thanks.

 

[GrahamM376]

You are unlikely to have problems within EC if it's not a very new boat and has been registered on the SSR with appropriate Port name on the transom. Don't forget RCD requirements with an imported boat, that can be very expensive.

 

[Pota de Fusta]

The VAT (IVA) is a tax when buying or selling and variable depending on the country of Europe. If the item is "second hand" or used item the VAT paid on the profits of the seller (if the boat was purchased for € 10,000 and instead sells 12,000 € VAT can be charged only over profits 2000 (16% 2000 = € 320). But the Spanish state, pay a tax "special", called "impuesto de matriculación" only citizens Spanish (Spanish or Residens according to the documentation of the flag of the ship) is 12%. If resident ("enpadronado") in the Canary Islands is 11%. This tax is paid later, according to the invoice amount of the transaction.. I hope I have clarified something.

 

[macd]

You are unlikely to have problems within EC if it's not a very new boat and has been registered on the SSR with appropriate Port name on the transom. Don't forget RCD requirements with an imported boat, that can be very expensive.

Aren't you rather assuming that Kemp is a British resident? He may not be eligible for SSR.

My own experience of visiting the Canaries is that the tax status of a boat is of little concern: most boats that arrive are just passing through. But others may have a different experience, and it may be different, anyway, if the boat is to be kept there for some time.
Normally VAT would be payable on an EU resident's boat's first arrival in the EU VAT zone, wherever that might be. Perhaps the most common place for VAT to be paid on yachts arriving in the EU is the Azores which, unlike the Canaries, is part of the common VAT area. It also has pretty low rates.

 

[Tranona]

There is a lot of misinformation here.

The Canary islands are NOT part of the EU VAT area, so there is no problem keeping a non VAT paid boat there, irrespective of who owns it or where it is registered.

The boat will, however become potentially liable for VAT based on its value at the first state of entry into the EU unless it and the owner qualify for one of the limited exemptions. From the what the OP has said so far, it is unlikely that any exemptions will apply. The boat will also need to comply with the RCD, which may or may not be easy depending on the boat and its history.

 

[Kemp]

We have no plans sailing to EU VAT area any time soon, so I'm particularly interested in the Canary Islands.

 

[prv]

registered on the SSR with appropriate Port name on the transom.

What would be the "appropriate port" for a boat on the SSR?

Cardiff, perhaps?

Pete

 

[RichardS]

What would be the "appropriate port" for a boat on the SSR?

Cardiff, perhaps?

Pete

Too true!

When I cleared back into Croatia after a cruise to the Ionian the Port Police officer asked me for the port of registration for his paperwork. I said Cardiff and he wrote that on the form. I remember thinking thank God the the SSR office is in Cardiff. Imagine if they relocated to Birmingham! I would probably still be in a Croatia slammer trying to talk my way out of that one!

Richard

 

[Tranona]

What would be the "appropriate port" for a boat on the SSR?

Cardiff, perhaps?

Pete

The SSR does not have a port of registry so you can put anything you want as it has no meaning other than to satisfy foreign officials.

If you are a Bill Bryson fan then "Little Dribbling" might be appropriate!

 

[macd]

There is a lot of misinformation here.

The Canary islands are NOT part of the EU VAT area, so there is no problem keeping a non VAT paid boat there, irrespective of who owns it or where it is registered.

The boat will, however become potentially liable for VAT based on its value at the first state of entry into the EU

Far from 'misinformation', Tranona, I think the fact that the Canaries is not part of the EU VAT area, and that VAT would become due on eventual entry to that VAT area, has been described quite clearly in the posts preceding yours.

 

[Tranona]

Far from 'misinformation', Tranona, I think the fact that the Canaries is not part of the EU VAT area, and that VAT would become due on eventual entry to that VAT area, has been described quite clearly in the posts preceding yours.

Apologies, yes, you did, but not so in earlier posts from others. I should have made that clear by quoting the specific posts.

 

[macd]

Apologies, yes, you did, but not so in earlier posts from others. I should have made that clear by quoting the specific posts.

No worries, but I was thinking as much of the OP, who evidently had made some effort to check out the Canary's status.

 

[nigelmercier]

I've been there four years, VAT status has never been requested.

 

[prv]

The SSR does not have a port of registry

I think they call that a "whoosh!" moment

Pete

 

[Kemp]

I've been there four years, VAT status has never been requested.

Do you mean 'you' as a person? Or just kept your boat there? From legal perspective person staying longer than 90 days in Spain should register to be added to the Central Register of Foreign Nationals and get foreigners tax identification number (Número de Identificación de Extranjero - NIE). I suppose it is not the same as Spain resident. But if I spend more than 183 days in one calendar year and my center of vital interests in the Canaries, I would become Spain resident. How this then affects situation with boat's VAT in the Canaries? To sum up 1) boat in the Canary Islands = not EU VAT area 2) boat owned by Cayman Islands IBC company 3) boat registered under Cayman Islands flag 4) I live aboard for more 183 days = Spain resident

 

[Kemp]

Anyone else?

 

[Kemp]

"In December 2012 a British yacht which had been in the Canaries for some months was boarded by Customs (aduana) while at anchor prior to departure for the Cape Verde islands. They departed after the owner had completed the usual forms, but returned shortly afterwards to ask how long both boat and crew had been in the Canaries. This resulted in a further form, which the owner was told had to be completed and presented at the Customs Offi ce within four days, together with proof that all those aboard had been out of Spain in the last six months, or the boat would be seized. Fortunately they had kept their flight boarding cards from their last visit to the UK, and these were accepted without question. It seems likely that Customs were checking for a possible infringement of the rules governing long-term stays in the islands."

Maybe someone has any recent experience?