VAT Confusion

[Sailing.Kythera]

Hello,

So I have been trying to figure out things myself online, but I can't seem to get a grasp of things. I will try and lay out my issue.

I am a Canadian citizen with Greek residency, not citizenship. I used to live in the UK and bought a classic wooden boat, built 1929, and have been restoring her for a few years, boat is UK registered. My wife (Greek) and I now live in Greece and would like to sail the boat here. My questions are will we need to import the boat and pay the VAT? Better to register the boat in an EU country under my wife (Greek)? Keep things as is and sail out of the EU every 18 months and reset the clock?

Any help or advice would be greatly appreciated.

 

[Biggles Wader]

No idea about VAT on a boat that age but a nice piccie of it would go down well.

 

[srm]

If your boat is in the UK and seaworthy you could import it into the EU in the Azores, currently max rate 16% VAT. As it's an old boat a documented low valuation (such as your original Bill of Sale) might help keep cost low. All you need to keep a boat in the EU, without time limit, is a VAT receipt from any EU country.

An alternative may be to register in an EU country (Poland is currently popular for people wanting to avoid national regulations) and hope you never get asked to produce a VAT receipt.

However, Tax status and registration are two different things. If EU tax has been paid (or the boat is otherwise exempt) you can keep the boat in the EU with its British registry as I did with a boat that was in EU on Brexit day. Likewise an Australian friend bought a boat that was VAT paid in the Netherlands and legally keeps it in the EU without time limit having put it on the Australian registry.

I am not a tax adviser and the above is only my understanding of a potentially complex subject.

 

[Irish Rover]

So you're a Greek thus EU resident and the boat is in the UK. Assuming the boat was in the UK on Brexit day I see no way for you to bring it into the EU without importing it and paying the VAT. Others may be better placed to advise you how best to minimise the amount of VAT you have to pay.

 

[Tranona]

Yes, as an EU resident you cannot enter under Temporary Admission and leave every 18 months. You will need to import the boat into the EU and pay VAT. You may be able to keep the UK registration if it is Part 1, but not part3 (SSR) because that is not available for non UK residents. Your biggest challenge will be to get Greek Customs to agree to importing a 1929 boat.

 

[lustyd]

classic wooden boat, built 1929

You just need to maintain the story that old wooden boats are worthless and a money pit. You do have to import it, although in theory can bring it in as a posession if moving permanently which may avoid tax. If you can get a low valuation I'd just pay tax and get the paperwork if you love the boat.

Will it meet EU certification though?

 

[srm]

Will it meet EU certification though?

Well it predates the formation of the EU and of the EEC, so there may be an argument that it is exempt from the RCD. A boatbuilder friend used to build wood boats to traditional designs. As long as they were "replica" Orkney Yoles they did not need to meet the requirements of the RCD. Modernising them, with say built in buoyancy, would have made them liable to certification though.

The UK reg boat I have just sold (and cancelled the registration of) predated the RCD by a few years and is being put on the Polish register. I understand that the application has been accepted. The owner is waiting for the full documents.

 

[Tranona]

Well it predates the formation of the EU and of the EEC, so there may be an argument that it is exempt from the RCD. A boatbuilder friend used to build wood boats to traditional designs. As long as they were "replica" Orkney Yoles they did not need to meet the requirements of the RCD. Modernising them, with say built in buoyancy, would have made them liable to certification though.

The UK reg boat I have just sold (and cancelled the registration of) predated the RCD by a few years and is being put on the Polish register. I understand that the application has been accepted. The owner is waiting for the full documents.

Prior to Brexit life was much simpler for older boats. When the RCD came in (1998) boats either built in the EEA or in use in the EEA before that date were exempt from the RCD. However boats importing from outside the EU after the date did have to comply. This killed the steady trade of boats from the US coming to the UK in particular - mostly boats of the style that were not available in the UK.

The effect of Brexit is that boats from the UK to the EU if built in the EEA would still be exempt, but the UK government seems to have removed that exemption for boats coming the other way. so in theory the OPs boat should be OK but given Greece's record of variable application of EU law on movement of boats it would be sensible to get agreement from Greek Customs before making the journey. This will be needed for VAT purposes anyway as if sailed there it will have to enter the EU via another state. While this is allowed, it is only with agreement of the state where it will be kept and VAT paid.

Your old boat is different as it has been an EU boat since 31/12/2020. Where it si (or has been) registered is irrelevant fom a VAT point of view. The new owner could keep it on the UK Part 1 if they wished. Far better than polish registration.

 

[srm]

The new owner could keep it on the UK Part 1 if they wished. Far better than polish registration.

As a Portuguese citizen with no UK connections he is not eligible. The Polish registration is to sidestep local regs, for the time being at least. The value of the boat does not justify the costs of setting up a UK registered company to keep it on UK Part 1.

 

[Irish Rover]

As a Portuguese citizen with no UK connections he is not eligible. The Polish registration is to sidestep local regs, for the time being at least. The value of the boat does not justify the costs of setting up a UK registered company to keep it on UK Part 1.

All EU citizens can register a boat on UK Part 1. I'm in the process of doing it right now. If they have no connection to the UK they need to appoint a representative person in the UK - a simple inexpensive process. No need for a company.

 

[lustyd]

The effect of Brexit is that boats from the UK to the EU if built in the EEA would still be exempt

Not sure this will be accurate here? If the boat was built and exempt then it won't have certification. The exemption is for boats that have certification already, so they can keep what certification they have if moved. This would theoretically be an import of an uncertified boat since it's not in the EU and (probably) has no certification.

 

[Tranona]

Not sure this will be accurate here? If the boat was built and exempt then it won't have certification. The exemption is for boats that have certification already, so they can keep what certification they have if moved. This would theoretically be an import of an uncertified boat since it's not in the EU and (probably) has no certification.

No. The pre 1997 exemption is for boats built in the EEA or in the EEA on the qualifying date in 1998. By definition they do not have any CE certification (unless they have been through a post construction assessment). That exemption was EU wide and it seems that it is still the case in the EU but not in the UK.

 

[lustyd]

No. The pre 1997 exemption is for boats built in the EEA or in the EEA on the qualifying date in 1998. By definition they do not have any CE certification (unless they have been through a post construction assessment). That exemption was EU wide and it seems that it is still the case in the EU but not in the UK.

Surely similar to the VAT situation though where on that date they were deemed to have complied but any notable change could alter that?

 

[Sailing.Kythera]

An alternative may be to register in an EU country (Poland is currently popular for people wanting to avoid national regulations) and hope you never get asked to produce a VAT receipt.

 

[Sailing.Kythera]

Well first off thank you all so much for the replies. It seems that things are not as simple as I had hoped.

All EU citizens can register a boat on UK Part 1. I'm in the process of doing it right now. If they have no connection to the UK they need to appoint a representative person in the UK - a simple inexpensive process. No need for a company.

It is UK registered under Part 1 (as I am not a UK citizen). Would this mean I am okay?
I do have the original bill of sale which is quite low as she was in pretty sorry state and does not take into account the full restoration. So I could contact the Greek Customs and say this is the value of the boat and just take the VAT hit and import.

 

[Irish Rover]

Well first off thank you all so much for the replies. It seems that things are not as simple as I had hoped.

It is UK registered under Part 1 (as I am not a UK citizen). Would this mean I am okay?
I do have the original bill of sale which is quite low as she was in pretty sorry state and does not take into account the full restoration. So I could contact the Greek Customs and say this is the value of the boat and just take the VAT hit and import.

As often happens this thread has gone off on a few tangents. My post which you quoted was in reply to another poster. It's good you're on UK Part 1 but it really doesn't change my advice in #4 and endorsed by our resident expert @tran in #5.

 

[Tranona]

Well first off thank you all so much for the replies. It seems that things are not as simple as I had hoped.

It is UK registered under Part 1 (as I am not a UK citizen). Would this mean I am okay?
I do have the original bill of sale which is quite low as she was in pretty sorry state and does not take into account the full restoration. So I could contact the Greek Customs and say this is the value of the boat and just take the VAT hit and import.

Registration is unconnected with VAT status so in theory you can keep the registration. You do not say when you moved residence from UK to Greece, but that may be important as under EU VAT law there is a thing called "Transfer of Residence Relief" which allows personal effects to be imported into your new state of residence without paying duty or VAT. There are conditions related to the boat, but from what you say it will comply. The unknown is whether Greek customs will accept that and grant the relief. Implementation is the responsibility of the state and Greece has a (deserved) reputation of not doing that very well.

In your position I would try TRR first and if that does not work then import it and pay VAT. There are no EU wide "rules" on valuation just the principle that it should equate to market value so clearly there is scope for getting as low a valuation as you can using a professional surveyor. Age is still problematic as although in theory the boat should be exempt from certification I suspect your boat will be a novel experience for Greek Customs. In fact certification is nothing to do with VAT or registration and I do not know which body in Greece is responsible for it - in the UK it is Trading Standards, not customs.

Good luck with your visit to customs.