VAT & Import Duty help.

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boatfun

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Hello

I am trying to buy a boat in Portugal.

The seller is UK Citizen and I am UK Citizen the sale is between the two of us "private individuals" the boat is a 2003 yacht that was made outside the EU I think in Canada.

The yacht arrived in Portugal in 2008 and he has paid marina fees since then but for the last 2.5 years it has been on the hard in the marina as he was slowly refurbishing it as a hobby, sadly my friend has become ill has fallen behind on marina fees and is unable to carry on with his project hence why I have offered to buy it from him rather than the marina take the boat.

The problem is: The boat has no CE Certificate and VAT or Import duty was never paid, but he has never been asked to pay it either.

I am buying the boat off him for less than the value of it when he bought it as it does need quite a bit of work, the boat is not currently seaworthy so there is no chance of sailing it out of the EU for another 6 month to a year while it is repaired and refurbished.

The boat is currently registered as a class 3 on the UK Small ships register.

Can anyone advise on what would be the best thing to do with the boat? (except for run).... I do really like the boat.

Are any of the following possible or what are your views on them?

1, As the boat is not CE registered can the boat even legally be sold in the EU? if not what can you advise? CE registering can be very expensive.
2, If we made a "Bill of sale" within the UK would VAT then be due in the UK only? (And what if we never went into UK waters?, could this also work if I made a Bill of sale in another EU country say Bulgaria? (I mention Bulgaria as I have a property there)..
3, As the boat is not CE registered am I correct in thinking a UK citizen should not be allowed to sell it in Europe, and if that's right any advice?
4, I would consider sailing it out of the EU... but as I cant at present due to its condition, What is the score if you can not get it out of EU waters within VAT time limits?
5, What VAT would I be liable on? The value of the yacht when it arrived in 2008? or the value of the yacht now when I buy it? there could be quite a difference.
6, Is there anyway I can get time to finish the boat since I am a new owner?.
7, Does anyone have any experience of owners falling ill or dying and leaving there non EU boat in EU waters? what happens with them, how would you sell them with no CE present??. Could it be sold in Auction legally?

Any advice? any questions also fire away.
 
i've bought a couple of boats from the states & the vat was paid upon entry into the uk but the boats arrived on a ship as cargo I paid vat & duty on the first boat but only vat on the second because it was classed as a sea going vessel this was worked on the invoice price of the boat

dont know how you'd be on in your circumstances as clearly the boat has not been officialy imported yet & customs probably have no record of it although if you want to sell it you will be asked for proof of vat status by the purchaser

as for the value of the boat at the time of purchase all I did was submit the purchase invoice to customs & I susspect it could have said a substantialy less value & got away with it

The CE marking shouldnt be a problem I had a boat certified recently & was pleasently surprised by the cost & how easy it was I used CEproof who were very helpfull & easy to deal with. we had very little to do to make the boat comply so I wouldnt worry too much about that as your doing work anyway

ken
 
1. CE is a mandatory conformation imposed on builders.
2. If the boat was built before 1993 it has none and doesn't need one.
3. If the boat has an SSR registration, and it was in the EC before 1985 , no VAT is due.

It is impossible to give any opinion without knowing the build-date, but the safest way is to write to HM Customs and Excise and get a letter confirming no VAT is due.
The CE is a red herring if the boat is pre-1993.
If VAT is due it would be on the price at which the boat last changed hands at the rate levied in the country in which it changed hands.
 
As mentioned: The boat is a 2003 yacht that was made outside the EU

By this I meant it was Manufactured in 2003, sorry if I was not clear. Any more Q's let me know

CE - Is also mandatory on sales transactions of specific goods, is it not? you cant legally sell goods that are not CE marked in EU (Yes or no?, I am actually not sure)

HMRC will not give a letter saying NO VAT is due. Why would they as it may be due, its been in the EU since 2008 and has not been paid....

I like the sound of your last sentence about the price it last changed hands, but would someone not kick up a fuss if this was considerably less. I have a feeling it goes on a customs valuation not just price paid.
 
boatfun said:
I did not realise the post ever went live, seemed to give me an error when ever I pressed submit. Thanks will read now, but think my questions may have evolved more.
Click to expand...

Pay particular attention to post 3 "Jonic" . He is a well respected Yacht Broker well known on the Forum. Call him and take his advice.
 
Ok, just found your new thread here.

Oh dear Portugal...............NIGHTMARE.

If there is one place where you are likely to fall foul of not having the right import or VAT documents, Portugal is one of them.

Give me call tomorrow.
 
UK HMRC have no interest in the boat. VAT is due at the first state of entry into the EU - Portugal in this case. The UK registration is irrelevant, the liability depends on the nature of the transaction and in this case it is entry into Portugal from outside the EU that gives rise to the liability. The rules allow VAT based on the market value, which may be the purchase price if recent or a valuation agreed by customs.

If you are going to try and get it legally imported then you need to get an agent in Portugal to negotiate with the authorities there. In theory it is the current owner's responsibility to do this but you may well find customs will deal with you through an agent. The RCD is probably more tricky as this is not a customs responsibility, but the equivalent of Trading Standards. First you will have to determine what modifications need to be carried out to meet the RCD and collect the necessary documentation, particularly for the engine to show that it meets the required standard. There are specialists such as CE Proof who can advise on this, but be aware that it is likely to be costly and time consuming.

All this will substantially reduce the value of the boat, plus Canadian built boats, even if fully legal almost certainly have a lower value than comparable EU built boats. So assume that you will have to pay VAT of around 20% and possibly duty on the agreed value, up to £10k on getting it through the RCD plus professional expenses before you even consider the cost of making it seaworthy.
 
Tranona said:
UK HMRC have no interest in the boat. VAT is due at the first state of entry into the EU - Portugal in this case. The UK registration is irrelevant, the liability depends on the nature of the transaction and in this case it is entry into Portugal from outside the EU that gives rise to the liability. The rules allow VAT based on the market value, which may be the purchase price if recent or a valuation agreed by customs.

If you are going to try and get it legally imported then you need to get an agent in Portugal to negotiate with the authorities there. In theory it is the current owner's responsibility to do this but you may well find customs will deal with you through an agent. The RCD is probably more tricky as this is not a customs responsibility, but the equivalent of Trading Standards. First you will have to determine what modifications need to be carried out to meet the RCD and collect the necessary documentation, particularly for the engine to show that it meets the required standard. There are specialists such as CE Proof who can advise on this, but be aware that it is likely to be costly and time consuming.

All this will substantially reduce the value of the boat, plus Canadian built boats, even if fully legal almost certainly have a lower value than comparable EU built boats. So assume that you will have to pay VAT of around 20% and possibly duty on the agreed value, up to £10k on getting it through the RCD plus professional expenses before you even consider the cost of making it seaworthy.
Click to expand...

+1
 
Tranona said:
UK HMRC have no interest in the boat. VAT is due at the first state of entry into the EU - Portugal in this case. The UK registration is irrelevant, the liability depends on the nature of the transaction and in this case it is entry into Portugal from outside the EU that gives rise to the liability. The rules allow VAT based on the market value, which may be the purchase price if recent or a valuation agreed by customs.

If you are going to try and get it legally imported then you need to get an agent in Portugal to negotiate with the authorities there. In theory it is the current owner's responsibility to do this but you may well find customs will deal with you through an agent. The RCD is probably more tricky as this is not a customs responsibility, but the equivalent of Trading Standards. First you will have to determine what modifications need to be carried out to meet the RCD and collect the necessary documentation, particularly for the engine to show that it meets the required standard. There are specialists such as CE Proof who can advise on this, but be aware that it is likely to be costly and time consuming.

All this will substantially reduce the value of the boat, plus Canadian built boats, even if fully legal almost certainly have a lower value than comparable EU built boats. So assume that you will have to pay VAT of around 20% and possibly duty on the agreed value, up to £10k on getting it through the RCD plus professional expenses before you even consider the cost of making it seaworthy.
Click to expand...

What I do not get is: If you are a EU citizen: Legally you can not sell a boat manufactured in 2003, pay VAT, import duty or in fact import a boat into the EU if there is no CE Mark & RCD on the boat.

If it has none of these sorted out or even paid then a EU citizen (Legally) can not even sail it in EU waters, let alone try and sell it.

So my problem lies what happens with the boat?, what if the marina took the boat as payment (do not forget the boat is currently not seaworthy) how could they sell the boat on, surely they would then be required to pay the VAT on the boat and put a RCD on the boat.

What happens if a US national dies whilst travelling in EU waters on a US boat (with no CE or RCD) with no relatives to pass the boat too? what would happen with the boat how could the marina sell it?
 
Tranona said:
UK HMRC have no interest in the boat. VAT is due at the first state of entry into the EU - Portugal in this case. The UK registration is irrelevant, the liability depends on the nature of the transaction and in this case it is entry into Portugal from outside the EU that gives rise to the liability. The rules allow VAT based on the market value, which may be the purchase price if recent or a valuation agreed by customs.

If you are going to try and get it legally imported then you need to get an agent in Portugal to negotiate with the authorities there. In theory it is the current owner's responsibility to do this but you may well find customs will deal with you through an agent. The RCD is probably more tricky as this is not a customs responsibility, but the equivalent of Trading Standards. First you will have to determine what modifications need to be carried out to meet the RCD and collect the necessary documentation, particularly for the engine to show that it meets the required standard. There are specialists such as CE Proof who can advise on this, but be aware that it is likely to be costly and time consuming.

All this will substantially reduce the value of the boat, plus Canadian built boats, even if fully legal almost certainly have a lower value than comparable EU built boats. So assume that you will have to pay VAT of around 20% and possibly duty on the agreed value, up to £10k on getting it through the RCD plus professional expenses before you even consider the cost of making it seaworthy.
Click to expand...

I just had a 38 ft twin engined us boat CE marked by CEProof & it cost me around 10% of the above qouted figure for inspection & traveling expences flights etc for the surveyor including build plate owners manual & all neccessary documentation from the third party european notified body

the upgrades amounted to 2 fuel shut offs & a manual bilge pump + a few lables etc cost about £100 and an afternoons work I wouldnt worry too much about the rcd as it realy is easy nowadays as so many boats have been done & the experts know how & what to do to make a boat comply

obviously yours will cost a little more due to the further distance but nowhere near the above figure

Id speak to CEproof for a qoute

We used to import a lot of vehicles & while customs do occasionaly ask to look at the item being imported they rarely looked at ours & we routinely submitted a low value purchase invoice

but we were importing into the uk of course

ken
 
boatfun said:
What I do not get is: If you are a EU citizen: Legally you can not sell a boat manufactured in 2003, pay VAT, import duty or in fact import a boat into the EU if there is no CE Mark & RCD on the boat.

If it has none of these sorted out or even paid then a EU citizen (Legally) can not even sail it in EU waters, let alone try and sell it.

So my problem lies what happens with the boat?, what if the marina took the boat as payment (do not forget the boat is currently not seaworthy) how could they sell the boat on, surely they would then be required to pay the VAT on the boat and put a RCD on the boat.

What happens if a US national dies whilst travelling in EU waters on a US boat (with no CE or RCD) with no relatives to pass the boat too? what would happen with the boat how could the marina sell it?
Click to expand...

It can go into customs bond whilst the work is done or a buyer willing to take it on is sought.
 
As already said, VAT is due on the value (much reduced if not seaworthy) and it needs RCD compliance which can be very costly with an unknown boat type. Portugal is a paperwork nightmare and with translations, lawyer's and notaries fees, I suggest you don't try to sort it out there. VAT is also 23%.

It's rare for anyone to be asked for proof of VAT payment if the boat is UK registered so If I were you, I would just keep my head down, do the work and get it to the UK and then sort it out. If you want to PM me, I can give you contact details of a UK surveyor based on the Algarve who could answer all of your questions and establish value - if you employed him.
 
charles_reed said:
1. CE is a mandatory conformation imposed on builders.
2. If the boat was built before 1993 it has none and doesn't need one.
3. If the boat has an SSR registration, and it was in the EC before 1985 , no VAT is due.

It is impossible to give any opinion without knowing the build-date, but the safest way is to write to HM Customs and Excise and get a letter confirming no VAT is due.
The CE is a red herring if the boat is pre-1993.
If VAT is due it would be on the price at which the boat last changed hands at the rate levied in the country in which it changed hands.
Click to expand...
Sorry - your dates are wrong - CE marking is 1998 and VAT (in the UK) is 1973. The 1985 reference is a very common misconception based on an "amnesty-with-strings-attached" clause.
 
My US built boat was on the Canadian register when she entered the EU (France).
I cannot help with the CE mark as entry was just prior to 1998 so she is exempt.
VAT was paid in France at the then rate of a survey value.
By then the boat needed work and a sympathetic surveyor came up with a figure very much less than her "done up" value which was accepted by the Duane.
I still have the VAT receipt and a letter from CE Proof regarding the RCD position.
 
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