Tax question.

[Allan]

I have seen a number of boats for sale, some in Jersey, which are said to be "not tax paid". If I bought one of them, would I need to pay tax on the new price or the price I pay? Something tells me it may not be quite so simple! Note these would all be boat from Europe not the US.
Allan

 

[LadyJessie]

If you are refering to VAT in the EU: the value would be the market value at the time of importation into the EU, not the new price. That is why it can be very favourable to buy a non-VAT-paid boat and base it in the Channel Islands (or some other place outside the EU) and then bring it back into the EU (probably looking very old and worn when you show up at the tax office) and you have saved yourself a bundle in VAT.

 

[Allan]

Thank you for that, who values the boat?
Allan

 

[LadyJessie]

[ QUOTE ]
who values the boat?

[/ QUOTE ]At the end of the day; the taxman. But you will have the opportunity to give a lot of input into this.

If you just bought the boat, then a copy of your purchase document is the best proof of 'market value' anyone can make and it will almost always be accepted by the tax man. This is unless you play dirty and produce fake 'low value' invoices and get caught; your input will be disregarded and the taxman will assign you a very high value.

If you have bought the boat some years ago and import it later; then your original purchase price with a factor of depreciation will be used. For a very old boat; my experience is that the taxman will be very generous and let you get away with a very low valuation.

In summary; it will be a discussion between you and the taxman and the more 'genuine' documentation you can provide to aid the taxman in assessing 'market value' (be they invoices, ads for similar boats, etcetera); the better off you will be.

 

[PeterGibbs]

Just a small rider: you would be asked what additions or alterations you have made/had made since purchasing, plus any costs of actually bringing the boat into the EU. All are capable of bearing tax.

A valuation by a professional valuer in the country of origin would add weight to your dicsussions, as would a few slected cuttings from the mags showing comparable boats' recent asking values - as a topside from which to negotiate downward, should it be required.

I do endorse the "how can I help you mr taxman" approach. Dellboy will be charged max tax..

PWG

 

[Troutbridge]

A point, Jersey is about to introduce GST (a sales tax) which may be payable on a boat brought there (but not Guernsey). Also note that if you intend to import the boat into the EU then VAT is payable at the first EU port of call, regardless of where the boat is registered, so going to the Azores may save you 2.5% (15% as opposed to 17.5% in the UK) and they might be more 'flexible' on the valuation. I also support the idea of being upfront with Customs and Excise.

 

[Sybarite]

If this were France, the taxman would have a pre-emptive right to acquire your boat at the declared value.

John