VAT free in Europe?

[driver0606]

It seems the next problem in line seems to be the Small Ship Register. Apparently users are getting hassle in Greece and it is likely it will become unacceptable in the rest of Europe soon, whatever that means.

 

[DavidJ]

I’m interested when eventually I get back to Spain (Catalonia) whether they are positive towards the UK and Brexit. I know in previous conversations with marina staff they are all for this independence stuff.

 

[ShaneAtSea]

There are ways to avoid the tax (apparently) . You can buy the boat as a company asset and then charter it to yourself

Or you can pay less tax by registering the boat in somewhere like Malta

 

[Hurricane]

Now here is a thing.
I've only been stopped once - in France.
I that case, they were only (initially) interested in the boat's registration docs.
Our boat is registered on the Part 1 register as a "Pleasure Yacht" under private ownership.
AFAIK, the only way to have this "status" is for the boat to have been supplied to a genuine "end user" thus having had VAT paid.
There were three of us "pulled up" at that time.
We were all Part 1 registered but only two of us were marked as "Pleasure Yachts"
So, the French authorities just seemed to check the British register to confirm this information.
In our case (and the other registered "Pleasure Yacht") were "sent on our way".
But the other boat registered as not a "Pleasure Yacht" (I think the registration said Commercial") was asked to produce VAT/tax paperwork.

The point that I'm now making is that if that WAS the case and that the French authorities were happy with "Pleasure Yacht" status on the Part 1 registration, that might not now be case, now that the UK is outside the EU.

 

[Hurricane]

I’m interested when eventually I get back to Spain (Catalonia) whether they are positive towards the UK and Brexit. I know in previous conversations with marina staff they are all for this independence stuff.

SCM is in Catalonia (just) but I won't be asking that specific question.
Rather, I will try and avoid any conversations with the marina staff about Brexit.
Most of us in SCM get along very well - and with the staff/manager.
Being in Catalonia, there are some very strong differing views about Catalonia's independence - likewise for Brexit.
So, I will be trying to maintain our great relationship with all the staff and locals that we know so well.
And it is not our place to discuss Catalonia's future.

Just looking forward to seeing them all again.

 

[Portofino]

Now here is a thing.
I've only been stopped once - in France.
I that case, they were only (initially) interested in the boat's registration docs.
Our boat is registered on the Part 1 register as a "Pleasure Yacht" under private ownership.
AFAIK, the only way to have this "status" is for the boat to have been supplied to a genuine "end user" thus having had VAT paid.
There were three of us "pulled up" at that time.
We were all Part 1 registered but only two of us were marked as "Pleasure Yachts"
So, the French authorities just seemed to check the British register to confirm this information.
In our case (and the other registered "Pleasure Yacht") were "sent on our way".
But the other boat registered as not a "Pleasure Yacht" (I think the registration said Commercial") was asked to produce VAT/tax paperwork.

The point that I'm now making is that if that WAS the case and that the French authorities were happy with "Pleasure Yacht" status on the Part 1 registration, that might not now be case, now that the UK is outside the EU.

Yes historically the French , Italians ( and a few others ?) in order to get on there private use section of there boat register , or the U.K. eq your ” pleasure yacht “ description they had to have paid the tax , the IVA , VAT eq .
We know to get on the U.K. register proof of VAT payment is not a gateway , but it is is in the EU s various boat registers .

Hence my point , they eye ball the U.K. reg cert and soon get distracted , even with the VAT BOS invoice on the table .

The Italians issue a blue book which you keep a copy .Think the U.K. car V5 reg doc when you buy a car .When the first owner sells the car , and if many owners , say you buy a 4 year old car with 3 owners , nobody phaffs with the VAT paid status .
” excuse me mr Swiss Tony can you prove the VAT has been paid “ You just do not hear it .This is because to have issued the V 5 in the first place all the taxes inc VAT where taken car of by the first owner / dealer .

Once it’s registered for private use it’s VAT paid ( not talking commercial) .

 

[Portofino]

There are ways to avoid the tax (apparently) . You can buy the boat as a company asset and then charter it to yourself

French will bust you if you are caught running a faux company , or they suspect.
As I said they will apply the elephant test . Not sure what the proportion of time you can even legitimately pay for and what proportion of punter weeks they accept as a genuine charter concern .Obviously they will never disclose as once in the public domain folks will work the system to these numbers .

Here is a friend of mine ran a U.K. co back home in advertising and marketing .
Villa in SoF .Wanted a boat . First buy was a 60 ftr specifically for charter .The uk builder held his hand in the build , coding etc , crew cabin the works ,Hires a seasonal skipper .New boat based St Tropez latest shaper etc .VAT free and claimed VAT back on the fr co side .That Fr co was part of his group The group tax position was put to the U.K. inland revenue .
Did it all above board inc entertaining his own clients through the books all legit .
Back home accountant shoved it through the U.K. books as part of his group of co s , as a entertainment asset or a significant proportion.It was .
French Douanes where relaxed as his personal use was say 3 weeks out of the 10-12 weeks it was charted out in the season .
After a while the uk inland revenue successfully quashed the Co asset angle and disallowed it .
Sold it as the running costs , loan repayments , berthing etc and the depreciation where stacking up .
The wife complained about “ stained mattresses “ Stuff like that and broken part glass sets etc ....you know the underbelly of volume charter .
Had a boat holiday .
Wife developed a degenerative disease problems doing the lines .
Missed the sea so came back in with sub 50 ftr IPS .The parking issue . VAT free .
Set up a Fr charter co , hired a part time skipper .It was partially successful, only two cabins and no crew cabin so was set for day trips ( solve s the stained mattress issue )
He handed the business rains over to other family members so they found more time to boat .
Wary of his wife’s predicament still sailed with the skipper ,liked long boozy SoF lunches any how .He did the lines when berthing etc , Had the odd punters but not many .Continued to claim VAT back on boaty stuff .
On day mid August Douanes turned up , tapped his name ( passport details ) in the system recognised the previous charter boat and started asking probing questions.
Long story short he was issued with sort of “summons “ .Basically had 21 days to present various documents to the Douanes for this current boat or receive a be taken to court up in front of a judge and ........well you can image ?
Thing is most of the documentation was at his accountants in the uk and he ( remember August ) was on a two week holiday.
Took expensive curriers to get the books to the Douanes by the deadline they set .
Iirc they prevented him traveling as well something like that .
Anyhow the books ( copies were never returned ) he just got a Ok to travel .

Theres more he sold that boat IPS issues , not cost as warranty just hassle. He would be port bound awaiting French VP engineers in August as well as sweating worrying over the Douanes investigation, while we just went out every day.

Third boat was straight shafts under 50;ft needed to fit the birth that the U.K. builder provided with the deal .Serial new boat guy .
This boat was VAT paid personal use only and he hired a skipper ad hoc .

 

[chrisrjcox]

Hi All, interesting topic and obviously a new one based on us only leaving the EU 5 month ago.

So what I'm gaining from this conversation is that now a UK Citizen can purchase a ex-rental yacht, from say, Croatia, which is non VAT paid, register it on the SSR and get away without having the VAT due, ever, unless they sail into UK waters? And all the EU customs can do is check the registration, insurance and owner details, then be on their way, i.e. as the owner is not an EU citizen they are not interested in the VAT status. I'm assuming this is the same situation if the owner travels to all the other countries in the world, VAT will not be an issue?

I wonder what the authorities thinks if you are a live aboards as long as they leave with the boat and don't overstay the shengen, they would be ok I assume.

 

[Hurricane]

Hi All, interesting topic and obviously a new one based on us only leaving the EU 5 month ago.

So what I'm gaining from this conversation is that now a UK Citizen can purchase a ex-rental yacht, from say, Croatia, which is non VAT paid, register it on the SSR and get away without having the VAT due, ever, unless they sail into UK waters? And all the EU customs can do is check the registration, insurance and owner details, then be on their way, i.e. as the owner is not an EU citizen they are not interested in the VAT status. I'm assuming this is the same situation if the owner travels to all the other countries in the world, VAT will not be an issue?

I wonder what the authorities thinks if you are a live aboards as long as they leave with the boat and don't overstay the shengen, they would be ok I assume.

The big caveat to that is that you can't leave the boat in the EU for more than 18 months (TA rules).
But if you take it back and forth (into and out of the EU) - even for just one day, you can stay as long as you like with a non VAT paid boat.
Remember, that you as a non EU person cannot stay in the EU yourself for more than 90 days in any 180 (rolling) days.

Registering on the SSR would be a good thing but not essential to keeping the boat (VAT free) in the EU.
Registration has nothing to do with any of this.
The boat is (in its own right) a "good" and is treated as such.

All this is as I understand it.

 

[chrisrjcox]

The big caveat to that is that you can't leave the boat in the EU for more than 18 months (TA rules).
But if you take it back and forth (into and out of the EU) - even for just one day, you can stay as long as you like with a non VAT paid boat.
Remember, that you as a non EU person cannot stay in the EU yourself for more than 90 days in any 180 (rolling) days.

Registering on the SSR would be a good thing but not essential to keeping the boat (VAT free) in the EU.
Registration has nothing to do with any of this.
The boat is (in its own right) a "good" and is treated as such.

All this is as I understand it.

This is very interesting indeed, so UK boat shoppers now have a much larger list of boats they can view/buy, this is great news, as taking the boat out of the EU in the Med is pretty easy.

Does anyone know a good source of VAT info, for us boaters, that takes into account any changes since the start of this year?

Does anyone know of any countries where people might come into VAT issues? Obviously the Owner cannot sail the boat to the UK, as VAT would be due. My assumption is, that due to the VAT rules, more and more boats will fall outside VAT, as its a pain to have to sail back to the UK every three years to re-register the VAT (if UK VAT registered).

Chris

 

[DavidJ]

........this is great news, as taking the boat out of the EU in the Med is pretty easy.

You may find this list interesting. I’m not sure where you are thinking of taking your boat to reset every 18 months.
Territorial status of EU countries and certain territories - Taxation and Customs Union - European Commission

 

[Portofino]

Re 90 in 180 , you could try a long stay tourist visa .
Or say in currently Croatia ( I think or some other ex Yugoslavian new state ? Montenegro? ) hop in there not just for the EU VAT dodging Marina picture + Marina bill , but to stop the EU clock .You will start another 90 in 180 there .
Or I think Cypress has cracked and waived it all ready .....if not others will pretty soon .

 

[James L]

I do wonder if this rule will remain unchanged.
As I see it the point is that you may be cruising through the EU and it means you don't have to pay Vat a second time.
If we see a lot of Vat free boats in the Med I would predict they change the rule that you have to have the boat Vat paid in your home country to avail of the TA.

Up until now it hasn't really mattered as there would have been few people to take advantage of it.

 

[Portofino]

I do wonder if this rule will remain unchanged.
As I see it the point is that you may be cruising through the EU and it means you don't have to pay Vat a second time.
If we see a lot of Vat free boats in the Med I would predict they change the rule that you have to have the boat Vat paid in your home country to avail of the TA.

Up until now it hasn't really mattered as there would have been few people to take advantage of it.

VATs a Eu hang up now they created it .
There is a big wider world outside the EU , that’s just got a tiny bit bigger .

SY s growth has accelerated , it was pretty steep pre Covid , so has all that comes with it inc “ Georgetown “ and the like company ownership.
So you are right in the sense of VAT leakage today must be already massive compared to Onassis s day on Cristina O in the 60 s , and certainly previous decades .
In the early 70 s a 20 -25 M boat was massive backed up to St Tropez. Today the SYs anchor outside in the bay , maybe 1 or 2 small ones side on the S quay inside , like in the pic below .

Can,t see them changing it to hit the little man , the odd Brit with £1-3 M to play with .Bigger and they end up chartering properly anyhow .



The TA scheme I suspect has been ragged about behind doors in Brussels anyhow , with ears to the ground from various ship yards and tourism , marine trade groups .

Best way to think is a kids party with one of guys making dogs etc by twisting sausage balloons .All you do as you twist is redirected the air from one end of the ballon to the other .The air being the trade , knock in effect of SY s or in this case Brits ending up with VAT free boats that wouldn’t have other wise . Turkey , Montenegro anyone?

Nah !

 

[James L]

VATs a Eu hang up now they created it .
There is a big wider world outside the EU , that’s just got a tiny bit bigger .

SY s growth has accelerated , it was pretty steep pre Covid , so has all that comes with it inc “ Georgetown “ and the like company ownership.
So you are right in the sense of VAT leakage today must be already massive compared to Onassis s day on Cristina O in the 60 s , and certainly previous decades .
In the early 70 s a 20 -25 M boat was massive backed up to St Tropez. Today the SYs anchor outside in the bay , maybe 1 or 2 small ones side on the S quay inside , like in the pic below .

Can,t see them changing it to hit the little man , the odd Brit with £1-3 M to play with .Bigger and they end up chartering properly anyhow .


View attachment 115780
The TA scheme I suspect has been ragged about behind doors in Brussels anyhow , with ears to the ground from various ship yards and tourism , marine trade groups .

Best way to think is a kids party with one of guys making dogs etc by twisting sausage balloons .All you do as you twist is redirected the air from one end of the ballon to the other .The air being the trade , knock in effect of SY s or in this case Brits ending up with VAT free boats that wouldn’t have other wise . Turkey , Montenegro anyone?

Nah !

That made very little sense to me, but I think you're trying to say that the TA scheme will never be changed because of the knock on effect on Super Yachts, Chartering etc etc.
It would be pretty easy to change it so these are not affected. Just insisting the boat is Tax compliant in your home waters would cover it, as companies etc would be unaffected.

 

[Portofino]

That made very little sense to me, but I think you're trying to say that the TA scheme will never be changed because of the knock on effect on Super Yachts, Chartering etc etc.
It would be pretty easy to change it so these are not affected. Just insisting the boat is Tax compliant in your home waters would cover it, as companies etc would be unaffected.

The VAT on Jeff Bezos new boat ( and the like ) est £350 M is far greater than number any fairprinsunnys 50 s .

How can they , the EU stick it’s nose into AN Others tax rules ?
Be it 11000 miles away in NZ or 22 miles the U.K. .
If you bought a Ferretti product , wadda you mean “ home waters “ Boats never been to the U.K. or likely to !
If you had a work permit to say work elsewhere like HK , whose home waters ? Been there 25 years .U.K. passport holder .
Dual Nationality , U.K. + AN other but not an EU ....say Panama ?

Or as I said you are just squeezing air from one part of the sausage ballon to another .......U.K. citizens just put the boat in a company .Or a newby just avoids the EU and thus the EU UKs boaty scene shrinks , while Turkey / or where ever in the Adriatic? etc grows .

As I said I suspect they have had blazing rows and if I was them right now I would be looking stimulate the EU economy .

Reminds me of a Brownism .Remember GB went large on disclosure of U.K. nationals holding Swiss bank accounts.
Estimated a extra £30 bn of extra windfall tax take .The budget before splurged this £30 bn on something , kinda pre spent it in his budget .
Actual tax take ended up under £5 Bn a whopping £25 bn deficit to toss onto the already Labour generated huge one growing .
Iirc Labour left Cameron / Osbourne with then record £185 Bn deficit.Indeed Liam Brynes note “ there is nothing left “

What happened money moves .It did .Or was legitimate.

Boats move they do in pretty much the same way .
You could sit down right now with the U.K. big three tot up the volumes sold into the EU owned by VAT free qualified owners from now on .Thoses prepared to TA and play the 18 months rule game .

If you were to go ahead and stymie this as you suggest .......well the Swiss windfall £5 bn out of a forecasted £30 Bn ....that went well didn’t it Gordon .
A similar thing would happen to the EU by squeezing the odd U.K. new owner who happened to run with the TA after Brexit .
Its a benefit for a few prospective owners .

Advantage of being a 3P . Current rules are simple easy to understand and workable for the EU and 3 P s citizens.

No different to AN Other Eu rim state eg Turkish , Egyptian or Tunisian guy keeping his boat in the EU under TA should he wish .

 

[James L]

The VAT on Jeff Bezos new boat ( and the like ) est £350 M is far greater than number any fairprinsunnys 50 s .

How can they , the EU stick it’s nose into AN Others tax rules ?
Be it 11000 miles away in NZ or 22 miles the U.K. .
If you bought a Ferretti product , wadda you mean “ home waters “ Boats never been to the U.K. or likely to !
If you had a work permit to say work elsewhere like HK , whose home waters ? Been there 25 years .U.K. passport holder .
Dual Nationality , U.K. + AN other but not an EU ....say Panama ?

Or as I said you are just squeezing air from one part of the sausage ballon to another .......U.K. citizens just put the boat in a company .Or a newby just avoids the EU and thus the EU UKs boaty scene shrinks , while Turkey / or where ever in the Adriatic? etc grows .

As I said I suspect they have had blazing rows and if I was them right now I would be looking stimulate the EU economy .

Reminds me of a Brownism .Remember GB went large on disclosure of U.K. nationals holding Swiss bank accounts.
Estimated a extra £30 bn of extra windfall tax take .The budget before splurged this £30 bn on something , kinda pre spent it in his budget .
Actual tax take ended up under £5 Bn a whopping £25 bn deficit to toss onto the already Labour generated huge one growing .
Iirc Labour left Cameron / Osbourne with then record £185 Bn deficit.Indeed Liam Brynes note “ there is nothing left “

What happened money moves .It did .Or was legitimate.

Boats move they do in pretty much the same way .
You could sit down right now with the U.K. big three tot up the volumes sold into the EU owned by VAT free qualified owners from now on .Thoses prepared to TA and play the 18 months rule game .

If you were to go ahead and stymie this as you suggest .......well the Swiss windfall £5 bn out of a forecasted £30 Bn ....that went well didn’t it Gordon .
A similar thing would happen to the EU by squeezing the odd U.K. new owner who happened to run with the TA after Brexit .
Its a benefit for a few prospective owners .

Advantage of being a 3P . Current rules are simple easy to understand and workable for the EU and 3 P s citizens.

No different to AN Other Eu rim state eg Turkish , Egyptian or Tunisian guy keeping his boat in the EU under TA should he wish .

The likes of Bezos will never pay Vat on their boats, they haven't in the past and they're unlikely to in the future.
For their boats and the amount of time they spend on them, they will have a genuine company set up and will easily comply with the rules etc.

As I'm usually resident in the UK I can have my UK reg car in Ireland for 12 months at a time. But it has to be taxed etc in the UK. It would be quite simple to apply the same rules to boats, you have to be compliant wherever you are resident.
Which means for a brit you need to have UK vat paid.
For a super yacht, they would setup the company somewhere with 0 vat on boats, which they are probably already doing.

If it happens in small numbers it won't be a problem, but if huge numbers of brits are taking advantage it won't be long before they tweak the rules.

 

[Portofino]

The likes of Bezos will never pay Vat on their boats, they haven't in the past and they're unlikely to in the future.
For their boats and the amount of time they spend on them, they will have a genuine company set up and will easily comply with the rules etc.

As I'm usually resident in the UK I can have my UK reg car in Ireland for 12 months at a time. But it has to be taxed etc in the UK. It would be quite simple to apply the same rules to boats, you have to be compliant wherever you are resident.
Which means for a brit you need to have UK vat paid.
For a super yacht, they would setup the company somewhere with 0 vat on boats, which they are probably already doing.

If it happens in small numbers it won't be a problem, but if huge numbers of brits are taking advantage it won't be long before they tweak the rules.

That’s VED , the car was eligible for VAT it’s been paid .French and Spaniards tax there leisure boaters annually as well on top fwiw ?

Why should the EU help the U.K. treasury? I mean the cash , should your wish come true goes to Rishi not Brussels.
UK is not interested in joining anything it’s left the EU and taken 3P status
As I said how can the EU poke its nose into none EU states matters inc taxation ? U.K. has well and truly kissed goodbye to federalism.

If it moves the bar changes it’s own rules then none EU folks will work to that .

Its a loverly Brexit benefit for those based near none EU states thinking of buying a boat for Med use .

 

[Hurricane]

Re 90 in 180 , you could try a long stay tourist visa .
Or say in currently Croatia ( I think or some other ex Yugoslavian new state ? Montenegro? ) hop in there not just for the EU VAT dodging Marina picture + Marina bill , but to stop the EU clock .You will start another 90 in 180 there .
Or I think Cypress has cracked and waived it all ready .....if not others will pretty soon .

What planet are you on????
Starting another 90 in 180 - What on earth are you talking about?
The rule is for ALL Schengen countries - you must not stay longer than 90 days is any rolling 180 days - it can't be simpler to understand.

And getting a long stay visa - where the hell do you get one of those???

 

[Bandit]

I assume for you people living in England, Wales and Scotland now ( no idea about Northern Ireland) the Eu is the same as it has been for me as a Guernsey resident:

I can keep a boat in the EU not EU VAT paid for up to 18 months then I have to export it out of EU to Channel Islands, Gibraltar , Tunisia, Croatia etc for a day to reset the clock.

Except you people post Brexit can now own a VAT free boat and cruise the EU and anywhere outside England, Scotland or Wales?