VAT nightmare

[Flyer295]

I am a UK resident and am in the process of buying a yacht. It is US flag Transit Status. (whatever that means) it is moored in a marina in Greece and has been for some considerable time.

How do I stand regards VAT (post Brexit) and customs status etc. if I go ahead with the purchase?

I wish to live aboard, How can this be done without being stung?

Bob

 

[Ningaloo]

Complete the sales transaction outside EU waters to escape immediate VAT? Then get a TA for 18 months.
But first investigate what "some considerable time" means. If more than 18 months VAT may already be due.

 

[Irish Rover]

As @Ningaloo says It's important to establish the current status of the boat. Most likely it entered Greece on TA [temporary admission otherwise known as a transit log] which would have been granted for 18 months. If it has overstayed it's temporary admission I'd walk away. However it could be there much longer than 18 months and still be OK if the transit log was surrendered to the Customs authorities and the boat effectively placed in bond.
I bought a VAT NOT paid boat in Greece a few years ago. The boat was on the hard and the transit log was lodged with Customs. The sale was completed via email exchange of documents. I had no issues with Customs when I came to collect the boat and renew the transit log.

 

[Charlie Boy]

Given the current ongoing balls up, I wouldn’t be touching that with a 100 foot barge pole. I can imagine a situation where you get charged vat twice, once in the eu and then again when it arrives here

 

[Flyer295]

Complete the sales transaction outside EU waters to escape immediate VAT? Then get a TA for 18 months.
But first investigate what "some considerable time" means. If more than 18 months VAT may already be due.

Not sure how that can be done as the marina is temporarily closed due to Covid. Would a marina tell me how long a boat has been there. The seller may not tell me accurately

 

[V1701]

Living aboard has no relevance with regard to VAT but if you're intending to do it in the EU & you're a UK resident bear in mind we're now subject to Schengen visa rules (90 days in 180)...

 

[Stemar]

With all the complications, this may not be workable, but could you put a clause in the bill of sale stating that, should EU VAT be due, it is the responsibility of the current owner?

 

[Flyer295]

With all the complications, this may not be workable, but could you put a clause in the bill of sale stating that, should EU VAT be due, it is the responsibility of the current owner?

Doubt if that would work as how would the EU get their money, the seller lives in America. I would have to pay.
As I said in the title of this post VAT NIGHTMARE. It's starting to look as if I might have to walk away.

 

[TernVI]

As Irish Rover says, you may be able to buy it and immediately export it VAT free to somewhere like Turkey. Then as a non-EU resident you could sail it in the EU under temporary admission, without paying VAT, for a limited time. You might have to pay to import it to Turkey, or might have to prove you're going to be sailing out of EU waters long term.

Alternatively the EU VAT (and maybe duty) can be paid and the boat becomes EU consumer goods. you should value the boat on this basis.

There may be non-tax issues associated with 'importing' the boat, like RCD compliance, you may have to pay for inspection and certification.

Some boats are cheap for good reasons! There loads of attractive looking bargain boats in the US on Yachtworld, but the true cost of bringing one back to the UK or EU is high.

Get proper up to date advice.

 

[Flyer295]

As Irish Rover says, you may be able to buy it and immediately export it VAT free to somewhere like Turkey. Then as a non-EU resident you could sail it in the EU under temporary admission, without paying VAT, for a limited time. You might have to pay to import it to Turkey, or might have to prove you're going to be sailing out of EU waters long term.

Alternatively the EU VAT (and maybe duty) can be paid and the boat becomes EU consumer goods. you should value the boat on this basis.

There may be non-tax issues associated with 'importing' the boat, like RCD compliance, you may have to pay for inspection and certification.

Some boats are cheap for good reasons! There loads of attractive looking bargain boats in the US on Yachtworld, but the true cost of bringing one back to the UK or EU is high.

Get proper up to date advice.

Thanks for your help.
I can understand to a certain extent the VAT system if I'm importing to live aboard and stay in one place/country. If I intend to cruise in and out of the EU only stopping for a month or two, how would that work. I would have to change registration upon purchase. Assuming that the boat has not been in Greece for the full 18mths max would VAT be payable by and to anyone or is it payable upon re-registering.

 

[Tranona]

Doubt if that would work as how would the EU get their money, the seller lives in America. I would have to pay.
As I said in the title of this post VAT NIGHTMARE. It's starting to look as if I might have to walk away.

It is the current owner's responsibility to deal with VAT - that is a condition of TA unless the boat is removed from the EU. Brexit has nothing to do with this as the boat is in Greece. You do not say what the boat is or where it was built. If it was not built in the EU or EEA then it will also have to comply with the RCD, which is an expensive or even impossible task for US built boats. The only way of buying the boat legally as already suggested is for the owner to remove it from the EU and you buy it outside and then re-enter under TA - or the possibility that it is effectively in bond so you can buy it without moving and then apply for TA . Either way you will need to register it on Part 1 as you are unlikely to qualify for US registration. This of course limits you to 18 months in the EU. You are limited to 90 days at a time in Schengen, so living on board is not really practical unless you get residence - and then you can no longer keep the boat in the EU under TA.

Everything leading to walking away and leaving the current owner to deal with the problems.

Seen your latest post which crossed with mine. I think this answers most of your questions. Yes, if you remove the boat from Greece, say to Turkey you can then re-enter the EU and apply for TA which will give the boat 18 months, but you will be limited to max 90 in 180 days. Yes, you can move in and out of the EU/Schengen living aboard provided you can mange within your limits. However, in practical terms most of the northern Med coast is EU with the obvious exceptions of Turkey, Montenegro, Albania and for Schengen currently Croatia. The N African coast is non EU, but cruising areas are limited.

Brexit has definitely reduced the choices for cruising and living aboard in the Med, but the issues surrounding the US owned boat you are looking at would have been the same pre Brexit. As suggested, this is why such boats are cheap as the problems really limit the potential market.

 

[RJJ]

It is the current owner's responsibility to deal with VAT - that is a condition of TA unless the boat is removed from the EU. Brexit has nothing to do with this as the boat is in Greece. You do not say what the boat is or where it was built. If it was not built in the EU or EEA then it will also have to comply with the RCD, which is an expensive or even impossible task for US built boats. The only way of buying the boat legally as already suggested is for the owner to remove it from the EU and you buy it outside and then re-enter under TA - or the possibility that it is effectively in bond so you can buy it without moving and then apply for TA . Either way you will need to register it on Part 1 as you are unlikely to qualify for US registration. This of course limits you to 18 months in the EU. You are limited to 90 days at a time in Schengen, so living on board is not really practical unless you get residence - and then you can no longer keep the boat in the EU under TA.

Everything leading to walking away and leaving the current owner to deal with the problems.

...makes sense to me. Except that he's quite possibly aware of the problems....there may be scope to get it priced-in or sort it out collaboratively.

 

[Irish Rover]

Thanks for your help.
I can understand to a certain extent the VAT system if I'm importing to live aboard and stay in one place/country. If I intend to cruise in and out of the EU only stopping for a month or two, how would that work. I would have to change registration upon purchase. Assuming that the boat has not been in Greece for the full 18mths max would VAT be payable by and to anyone or is it payable upon re-registering.

If the boat is not in breach of it's Temporary Admission conditions meaning if it's less than 18 months since it last entered the EU or is in bond then you can buy it without paying VAT and, based on my experience of a similar purchase, Greek customs will give you a new transit log for 18 months. Many of the US flagged boats in the Med are actually owned by companies registered somewhere like Delaware so you'd need to watch out for that. The seller should be able to give you details of the transit log status. When I got details I emailed the customs authorities in the local port Preveza and they confirmed the status for me. If the seller doesn't give you this info then beware.

 

[Ningaloo]

I see this as an opportunity for you to negotiate hard on the price if you feel the boat is worth it.
We are all going to have to find ways around both the 18 month VAT issue and the 90 day Schengen issue. I have kept my boats in EU (France, Portugal and Germany) since 2004 so accepting the new restrictions is hard for me.
I only live aboard for 5 months year and hold an Australian passport which gives me a visa free extension beyond Schengen in some countries (Italy looks useful for the Med). But really, I'd rather have paid the VAT and kept my freedoms.

 

[superheat6k]

I looked into buying a US boat and shipping it over. The RCD meant this was simply a non starter as it applies to all boats even those built before the RCD nonsense was introduced in 1997.

It would be a good thing if this EU protectionist nonsense flying under the guise of "Elf & Safety" was included on the supposed bonfire of EU red tape post Brexit.

 

[Concerto]

Might be worth checking out the information on the RYA web site. If you cannot find an answer, then if you are member, you can ask the legal department for a legal opinion on what you should do if you decide this is the boat for you. You will have to sort out all the necessary paperwork and probably pay the VAT, so this cheap boat will have to be hugely cheaper than usual.

As already mentioned this boat would already have been a problem purchase before Brexit, but now has the 90 day limit in any 180 day moving period. You may find the advice of walk away is still the best option as there are plenty of boats for sale in the Med.

 

[Irish Rover]

Might be worth checking out the information on the RYA web site. If you cannot find an answer, then if you are member, you can ask the legal department for a legal opinion on what you should do if you decide this is the boat for you. You will have to sort out all the necessary paperwork and probably pay the VAT, so this cheap boat will have to be hugely cheaper than usual.

As already mentioned this boat would already have been a problem purchase before Brexit, but now has the 90 day limit in any 180 day moving period. You may find the advice of walk away is still the best option as there are plenty of boats for sale in the Med.

90/180 has sweet fanny Adam to do with the boat.

 

[sailaboutvic]

90/180 has sweet fanny Adam to do with the boat.

Sorry I done a lot of research on the subject but I can't find who this sweet fanny Adam is ,
Would it be some one related to Bois government?

 

[Crisby]

90/180 has sweet fanny Adam to do with the boat.

Directly, yes but indirectly it does. A lot of brits have taken Greek residency in the past few years to gat around the 90/180 Schengen issue in Greece but now find they are only allowed a 1 month Transit log with a UK flagged and VAT paid boat! (At the moment..........)

Chris

 

[sailaboutvic]

Directly, yes but indirectly it does. A lot of brits have taken Greek residency in the past few years to gat around the 90/180 Schengen issue in Greece but now find they are only allowed a 1 month Transit log with a UK flagged and VAT paid boat! (At the moment..........)

Chris

Chris from day one some have gone on and on about resident being a way of getting around 90/180 rule some where suggesting in the early days that residence will give you free movement thought-out the EU shouting down anyone who didn't agree with then and they still doing it .
My option as always been that residence is fine if that what you want to do , live in one country but to use it to get over the 90/180 rule could and probably will back fire .
Whats happening in Greece doesn't surprise me and maybe if it turn out there are breaking some kind of EU rule it maybe over turned,
But I doubt that be the end of it , countries are looking at ways at making money after covid so it wouldn't surprise me if in year or so they want resident with boats to reflag under that country and pay agents and taxes which are involved as well as abiding by all of that country rules concerning the boat.
These countries are not stupid they know while people who don't have property in said country are using marinas address for application to become resident.