VAT - no proof - Dutch yacht

[easycruiser]

Hello All.

I would be most grateful for some practical advise. I am about to purchase a yacht in Holland, subject to the following point. The yacht is Dutch designed and built, current asking price circa. GBP40K, built 1990. It is currently owned by a German who keeps it in Holland. Its value in the UK would be wost case scenario (for market value purposes) GBP 50K (confirmed by a competent broker - difference is just due to this being a popular boat in Holland, and extremely well built and cared for, and unusual to get this type of boat in the UK.)

It does not have proof that VAT was paid. Only a builder's certificate which confirms who it was sold to - a Dutchman, a private individual.

Putting aside all the practical avenues to pursue - contact the yard / contact the old owner etc., I am interested to know what my worst case scenario in the future would be and whether anyone has any practical experience of this. I am not too concerned about this being an issue when I am using the boat in the UK, and I appreciate that I may have to negotiate a reduced price with a buyer when I eventually sell the boat in the future, to mitigate against the risk of them having to pay VAT on the boat.

My hypothetical worst case scenario: if I were stopped in e.g. France / Belgium / Holland and asked to produce proof of VAT, and I could not, and the authorities impounded the boat until I paid VAT on it, then my understanding is that I would have to pay VAT on the current market price (assessed by them) at the current VAT rate - so approx GBP 10K is my worst case scenario financial downside.

But what happens in practice? Is this a reasonable summary of my risk? Can the authorities impound the boat? Do the authorities just assess market value, send you an invoice, you pay, they issue a receipt and you sail away? How long does this process take? Do they add all kinds of admin charges?

I have also read (elsewhere on this forum) that the Dutch authorities will consider a boat's VAT status and confirm in writing it is deemed VAT paid, if they are satisfied of this having considered the case. If anyone has any info on this or contact details they would be gratefully received.

Many thanks

 

[Boo2]

My hypothetical worst case scenario: if I were stopped in e.g. France / Belgium / Holland and asked to produce proof of VAT, and I could not, and the authorities impounded the boat until I paid VAT on it, then my understanding is that I would have to pay VAT on the current market price (assessed by them) at the current VAT rate - so approx GBP 10K is my worst case scenario financial downside.

I don't know the details of Dutch law in this respect, but in the UK anyway my understanding is that VAT is due on the value at import from outside the EU, or first sale (if built and sold within the EU). This means that VAT would be due on the original purchase price, not the current value. I have been given to understand that the VAT would be owed (if it had not been originally paid) by the first importer or builder, but that the unpaid VAT is a charge against the boat.

This means, in principle (again in the UK) that you could be made to pay the VAT on the original purchase price of the boat.

BUT :

1. In the UK at least, there is only a requirement to keep records for 6 years, HMRC can only open records before then if they have reason to suspect fraud.
2. The liability for proving VAT has been paid is not on you anyway as a private buyer of a second hand boat from a non-VAT-registered seller.
3. I assume there is a "statute of limitations" for VAT debt in Holland ? (Don't believe that is true for the UK though ?)

ISTM that 1. above would be a real stumbling block for anyone to try to impound a boat in the UK on the basis of a supposed VAT charge.

As I said, I don't know what the relevant law is in France/Holland/Belgium but if there is a time limit for retention of records in those countries, and if that limit is less than 20 years, then you should be safe.

Boo2

 

[westernman]

As part of the sale contract, get something put in there whereby the current owner warrants that there is no VAT due on the boat and that he is a private individual and not selling in the course of business.

That should be as good as a VAT receipt to all intents and purposes - particularly for a boat of that age.

For my boat I have a real VAT receipt from UK customs. It is a small slip of pink paper - a third carbon copy of a handwritten receipt from when my boat was imported into the UK 10 years ago. It is really is very unconvincing!

 

[Pinnacle]

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[pappaecho]

I used to have an opinion from the C&E VAT centre at Dover -shut years ago.

As I see it, you only need to prove that the yacht was built in the EU and NOT EXPORTED.
If it was exported it would have been VAT free. If sold in 1990 it would have had by law to be sold in Holland at the prevailing VAT rate.
If for example it say a SClass Mercedes at the equivalent of £70k new, and it was sold in Holland to you now, nobody would be asking if VAT was paid, because again unless it was exported, VAT would have ben paid. Granted that the yacht might just have been sneaked back in VAT free, but if you can prove it was kept in Holland since it sale, I think that you will be OK .

 

[Aeolus]

I bought my boat in Holland and it also did not have proof of VAT paid. However the Dutch VAT authorities will issue a 'deemed paid' certificate. I know that my broker obtained it (not sure whether he did it himself or whether he prevailed on the owner to obtain it) for me. It is called a....just looked at the form. It says Belastingdienst Douane on the left hand side and Verklaring voor een pleziervaartuig on the right hand side. You could contact HISWA (the combination RYA / Marine Trade Assoc)- I found them very helpful when I had a query about some legal aspect of the purchase.