VAT again

Chris_Robb said:
LW395, as Macd said, it is important to understand that VAT has NO connection to the nationality of the owner AT ALL. VAT Once is paid, the Goods have the right of perpetual (subject to non being exported) free circulation within the EU 28 now and the EU 27 on exit (end of transition). Thus any vat paid yacht which currently has EU 28 VAT Goods Status, will retain that EU VAT Status on the date of exit provided it is in a country of the remaining EU27.
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Very easy to assert that on the internet today, not so easy to prove that it will always hold true.
 
lw395 said:
Very easy to assert that on the internet today, not so easy to prove that it will always hold true.
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You write that as though discussing a novel scenario. There are already many leisure vessels in the EU which are "union goods" (i.e. legally and fiscally compliant), which are owned by third country residents. Knowingly or not, you've probably encountered some of them on your travels. In all the decades this has been the case, there has never been the slightest suggestion that they would relinquish such status, except by the intrusion of a chargeable event. Boats owned by Brits would simply swell that existing population.

Further, the EU has been remarkably consistent in its VAT regime since it was extended throughout the Union. Indeed, anyone who doesn't see the obvious parallels between the post-Brexit VAT transitional arrangements, and the transitional arrangements which led to "deemed VAT paid status" etc., hasn't been paying attention.
 
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Be careful inTurkey etc:

"Can a boat lose its VAT paid status?

If a yacht with VAT paid status is exported from the EU it will usually qualify for relief from having to pay VAT again if it is imported back into the EU within 3 years of its export, provided that it is imported by the same person who exported it, i.e. no change of owner whilst outside the EU. However, this will not exempt it from any customs duties that maybe apply. If your boat will be exported for more than 3 years you should check the position with customs."
The VAT problem: top tips for yacht buyers and owners
 
SAPurdie said:
If a yacht with VAT paid status is exported from the EU it will usually qualify for relief from having to pay VAT again if it is imported back into the EU within 3 years of its export,
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Often claimed, but not true for private leisure vessels.
This is a response to a query made to HMRC's NIRU (National Import Reliefs Unit) in January 2019:
"As a private individual, the 3 year rule does not affect you as this is a commercial matter; therefore the 3 year rule would be waived automatically."
 
macd said:
"As a private individual, the 3 year rule does not affect you as this is a commercial matter; therefore the 3 year rule would be waived automatically."
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Correct.

I assume the position will remain the same for the next 12 months as it seems we will remain in line with EU until the final ties are cut. Anyone contemplating buying a boat within the intervening period needs to think carefully about where they wish to base it. Those with UK boats just visiting EU for holiday cruises won't have any problems as visitors in the future but, if wanting to buy a boat in the UK to travel to and base in (say) EU Med, then they need to make sure their boat is within the EU at the end of the transition period or, buy one already there.
 
Is that waiving of the 3 year rule confined to the original exporter/owner..?

my understanding was that the 3 years related to any importer but there was an additional year if the boat did not change hands, so yes the 3 year rule is waived but simply becomes 4 years..

ie can a previously vated boat, owned by a non eu national based outside the EU for 10 years, retain its vat paid status if imported into the EU by new owner.

I'd love to see where that is written.. ( I insisted the seller of my boat paid vat after it had been in Israel for 10 years...) that was the advice from the broker and the local Marine lawyer and the Spanish and Irish vat authorities at the time..

I accept two lawyers often provide three opinions
 
macd said:
Often claimed, but not true for private leisure vessels.
This is a response to a query made to HMRC's NIRU (National Import Reliefs Unit) in January 2019:
"As a private individual, the 3 year rule does not affect you as this is a commercial matter; therefore the 3 year rule would be waived automatically."
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So there's a 'rule' which the UK HMCE currently decides to waive.
Maybe a bt like they currently waiv ethe red diesel rules?

Rules which the UK currently waive could well be enforced by the EU in future.
 
pandos said:
Is that waiving of the 3 year rule confined to the original exporter/owner..? RGR on boats is confined to the original exporter, period. (Plain old Duty Relief, which I think does not cover VAT, is not so confined. In fact goods eligible for Duty Relief can have been acquired anywhere, from anyone.)

my understanding was that the 3 years related to any importer but there was an additional year if the boat did not change hands, so yes the 3 year rule is waived but simply becomes 4 years..
No literature I've seen on RGR makes mention of four years, anywhere. It generally limits duration to three years, but that can be waived in "special circumstances". Although RGR rules are mainly aimed at commercial enterprises, one of these exceptions is "professional and personal effects returned with home coming expatriates". This includes leisure craft (and cars, m/cycles, and much else). The defined special circumstances are EU-wide.

ie can a previously vated boat, owned by a non eu national based outside the EU for 10 years, retain its vat paid status if imported into the EU by new owner.
Seems not.
Incidentally, nationality is nothing to do with any of this. Country of residence is what matters.

I'd love to see where that is written.. ( I insisted the seller of my boat paid vat after it had been in Israel for 10 years...) that was the advice from the broker and the local Marine lawyer and the Spanish and Irish vat authorities at the time..
Sounds like very good advice.
Try Notice 236: Returned Goods Relief
Or, if you want a second opinion, in English, the Irish version: General rules for duty relief on returned goods

I accept two lawyers often provide three opinions.
But charge for four.
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Note that RGR on personal effects seems to be available only to private applicants returning from having been resident in a third country to become resident in the EU. This begs the question of whether an individual cruiser who has not become normally resident in a third country has meaningfully exported their boat at all. I don't know the answer to that. But assuming one had the same "union goods" evidence as sufficed when you left the EU, the temptation would surely be to just cruise quietly back in. Anecdotal evidence of cruisers being hammered for VAT on return (after a leisurely RTW, say), is scarce to non-existent.

The lesson mainly taken from this, is don't buy a used, VAT-paid boat in a third country if there's a convenient work-around, like popping across to Greece from Turkey to do the deal. (Unless the price is irresistible, perhaps.)
Important also to remember that, post-Brexit, all UK resident boat owners entering the EU27 from a third country on their way back to the UK would be eligible for 18 months VAT-free Temporary Importation, anyway, which would far exceed their ability to personally remain in the EU27. Then they'd just have the UK authorities to satisfy.
 
lw395 said:
So there's a 'rule' which the UK HMCE currently decides to waive.
Maybe a bt like they currently waiv ethe red diesel rules?

Rules which the UK currently waive could well be enforced by the EU in future.
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No, there's a 'rule' that HMRC is following.
Any comparison with the UK's red diesel position is disingenuous. That is prohibited and has been subject to infringement procedures. Special circumstances exceptions for the three year limit of RGR, on the other hand, are specifically provided for in the union customs code. They're entirely legal, and by no means confined to the UK.
Of course anything may change in the future. Not least, we'll both stop posting.
(Supporting the concept of change, the HMCE to which your refer disappeared in 2005.)
 
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I've just spoken to the VAT enquiry Office who advise that the 3 year Returned Goods Relief DOES apply to private individuals. They referred me to NIRU (National Imports Relief Unit) but their phone line is very busy and cuts callers off at the moment. I will email them to see if any info is available but, according to the VAT officer I spoke to, re-import rules of goods from EU, can not be defined until the withdrawal agreement terms are known. The NIRU web site has the following info, applicable now -

For goods to be entitled to use RGR for duty relief:
  • there must be adequate evidence to use as reference to show the goods were originally exported from the Customs Union of the UK and EU - this evidence must be supplied at re-import
  • the goods were in free circulation in the UK and EU prior to export and no refund of duty or VAT was claimed at export
  • the goods are being returned within 3 years of the original export
  • the goods are returning to the UK and EU in their original unaltered state
Additionally, for eligibility for VAT relief, the application to use RGR on re-import must be made by the original exporter.

A T2L should satisfy the second point about goods in free circulation.
 
macd said:
Well done, Graham.
I presume you'll be pointing out to NIRU the inconsistency between what you've just been told, and NIRU's written advice of last January. I'm told that the NIRU officer who dealt with that was Elaine Ewing.
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Just had an auto reply from them -

Please be aware that we are currently processing a backlog of work. **NIRU has a 15 working day turnaround – please do not progress chase until after this time
 
macd said:
Well done, Graham.
I presume you'll be pointing out to NIRU the inconsistency between what you've just been told, and NIRU's written advice of last January. I'm told that the NIRU officer who dealt with that was Elaine Ewing.
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It's quite normal for anything to do with VAt to appear inconsistent when you don't get the full 87page answer which covers all possibilities.
And that's before you involve e.g. the Italians.
Yachts are not exactly ordinary 'goods in circulation' they have special characteristics of being 'registered' like vehicles and being able to leave the territory and return as ships do.
Tread carefully.
 
I suspect the larger problem will be for UK boat owners, whose boat is safely tied up in Blighty on the appointed day, who then decide to spend a couple of years sailing the portugese coast and the med ... you eventually become liable for EU VAT and import duty, even if you paid VAT in the UK when you bought her.
 
rszemeti said:
I suspect the larger problem will be for UK boat owners, whose boat is safely tied up in Blighty on the appointed day, who then decide to spend a couple of years sailing the portugese coast and the med ... you eventually become liable for EU VAT and import duty, even if you paid VAT in the UK when you bought her.
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The solution for those able to do so, is to have the boat in one of the EU States for a short visit at crunch time, to keep EU VAT status. Fine if that's in summer but not so good at this time of year.
 
Do we know definitely that any change in vat status will only apply at the end of the transition period and not January 31st? My new Dufour will be commissioned in France and moved immediately to Spain 1st week of March and I'd planned to get the UK selling dealer to provide a zero rated invoice and I was going to pay Spanish Vat so I could be sure it has EU vat paid status. This would be unnecessary if Jan 31st isn't a cut off day?
 
dune16 said:
Do we know definitely that any change in vat status will only apply at the end of the transition period and not January 31st? My new Dufour will be commissioned in France and moved immediately to Spain 1st week of March and I'd planned to get the UK selling dealer to provide a zero rated invoice and I was going to pay Spanish Vat so I could be sure it has EU vat paid status. This would be unnecessary if Jan 31st isn't a cut off day?
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Does the UK dealer have an office with a VAT registration in Euroland?
Where will it be registered?
 
dune16 said:
Do we know definitely that any change in vat status will only apply at the end of the transition period and not January 31st?
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Yes. In practical terms, nothing changes on Brexit day (assuming there's a deal, the legislation for which is currently going through Parliament). The main change is that the UK will have relinquished EU voting rights.

lw395 said:
Where will it be registered?
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Where it's registered is irrelevant. Union goods status hinges on fiscal compliance.
 
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