VAT not paid boats in the Med

[Pete Carr]

Apologies if this has been covered before (I'm sure it has) but I couldn't find the relevant info in a search.
It may be simply a case of someone pointing me to a relevant thread somewhere

We are looking at buying a sailing yacht possibly by the end of this year, to primarily live aboard in the Med (at least 6 months a year)
I have so far ruled out quite a few boats that are 'VAT not paid' But should I?

1. Do I simply have to factor in an additional 20% and suck it up
2. What are the rules if VAT remains not paid? i.e. how long can the boat stay in Shengen waters, and how long must it leave for? I am guessing such a boat could not be wintered in a shengen country
3. We are British citizens , but I am also an Australian citizen (my wife isn't) I don't know if that could help or hinder? (especially after the brexit transitional period)

Many Thanks in Advance

Pete

 

[Irish Rover]

Apologies if this has been covered before (I'm sure it has) but I couldn't find the relevant info in a search.
It may be simply a case of someone pointing me to a relevant thread somewhere

We are looking at buying a sailing yacht possibly by the end of this year, to primarily live aboard in the Med (at least 6 months a year)
I have so far ruled out quite a few boats that are 'VAT not paid' But should I?

1. Do I simply have to factor in an additional 20% and suck it up
2. What are the rules if VAT remains not paid? i.e. how long can the boat stay in Shengen waters, and how long must it leave for? I am guessing such a boat could not be wintered in a shengen country
3. We are British citizens , but I am also an Australian citizen (my wife isn't) I don't know if that could help or hinder? (especially after the brexit transitional period)

Many Thanks in Advance

Pete

Citizenship is not the issue. Residence is. I bought a VAT not paid boat in Greece a couple of years ago and had no issues as I was able to prove I am resident in Turkey. So if you can prove you're resident outside the EU you can get a transit log of 18 months duration. You can also stop the clock on the transit log when the boat is out of use so if you're planning 6 months per year you could get up to 3 years without having to take a trip out of the EU. But residence is the key.

 

[Pete Carr]

Citizenship is not the issue. Residence is. I bought a VAT not paid boat in Greece a couple of years ago and had no issues as I was able to prove I am resident in Turkey. So if you can prove you're resident outside the EU you can get a transit log of 18 months duration. You can also stop the clock on the transit log when the boat is out of use so if you're planning 6 months per year you could get up to 3 years without having to take a trip out of the EU. But residence is the key.

Oooh! so as Britain is now out of the EU, what you say could actually work ?

 

[Irish Rover]

Oooh! so as Britain is now out of the EU, what you say could actually work ?

I knew you were going to ask that and, truthfully, I don't know the answer but I doubt it would work during the transition period.

 

[Pete Carr]

I knew you were going to ask that and, truthfully, I don't know the answer but I doubt it would work during the transition period.

Hypothetically: if a boat is for sale 'VAT not paid' one would assume it is based in a non EU country, so as long as the boat is kept out of EU waters until after the transitional period, it should all be ok?

Many thanks for your replies by the way

 

[Irish Rover]

Hypothetically: if a boat is for sale 'VAT not paid' one would assume it is based in a non EU country, so as long as the boat is kept out of EU waters until after the transitional period, it should all be ok?

Many thanks for your replies by the way

There are many VAT not paid boats for sale in the EU. As I said earlier I bought mine in Greece - it was owned by a Swiss resident. There are plenty of other VAT not paid boats for sale in the EU which are owned by non EU residents or are ex charter/company boats where the VAT has been reclaimed. The good news is that even as an EU resident you can buy one of these and you can get a short term 30 day Transit Log for the purpose of taking the boat out of the EU.

 

[Chris_Robb]

Citizenship is not the issue. Residence is. I bought a VAT not paid boat in Greece a couple of years ago and had no issues as I was able to prove I am resident in Turkey. So if you can prove you're resident outside the EU you can get a transit log of 18 months duration. You can also stop the clock on the transit log when the boat is out of use so if you're planning 6 months per year you could get up to 3 years without having to take a trip out of the EU. But residence is the key.

I beg to differ on the residency thing. At the CA we have had multiple occasions for ausiie boat staying longer than 6 months and the owners being told they can no longer sail or live on it. Many had 12 months tourist visas. We know that this is the standard interpretation at KOS.However if 6 months is the max time you stay then IR is right.

I always think that when you sell a boat you dont want any unnecessary objections especially in the form of a VAT query. Especially now with Brexit as now there is an opportunity of a life time to have both VAT status in the EU AND the UK at the same time, thus you can truly "have your cake and eat it" courtesy of the EU and UK trying to find a way round some of the tricky and unforeseen situations that might develop.

 

[Irish Rover]

I beg to differ on the residency thing. At the CA we have had multiple occasions for ausiie boat staying longer than 6 months and the owners being told they can no longer sail or live on it. Many had 12 months tourist visas. We know that this is the standard interpretation at KOS.However if 6 months is the max time you stay then IR is right.

I always think that when you sell a boat you dont want any unnecessary objections especially in the form of a VAT query. Especially now with Brexit as now there is an opportunity of a life time to have both VAT status in the EU AND the UK at the same time, thus you can truly "have your cake and eat it" courtesy of the EU and UK trying to find a way round some of the tricky and unforeseen situations that might develop.

I think the opening sentence of your post is somewhat unfortunate and possibly misleading. I explained the key to qualifying to keep a VAT NOT PAID boat in the EU without becoming liable for payment of VAT is the residency of the owners. I don't see how you can "differ" on that.
The issue you are highlighting is a separate but important one i.e. the length of time an individual owner can stay in the EU without changing the VAT status of the boat. When I took my first transit log in Preveza in 2018 the customs official told me the boat is OK for 18 months but to remember I could only stay 6 months. I pointed out that as an Irish [thus EU] citizen I could stay as long as I liked. She said true, but you are then classed as resident in Greece and the VAT becomes payable on your boat. Makes absolute sense to me.
As regards your second paragraph if you qualify to own a VAT NOT PAID boat and it suits your planned usage then my advice is go for it. You can save a lot of money. When you come to sell it later you will have to price it sufficiently below VAT paid boats to make it attractive but, so what, since you achieved a much bigger saving when you bought it. When the UK finally "leaves" the EU there may well be a much increased demand for VAT NOT PAID boats when UK residents qualify to own them in the EU. There is nothing dodgy about owning a VAT NOT PAID boat as long as you meet the residency requirements and no need for anyone to worry about "unnecessary objections especially in the form of a VAT query".

 

[Tony Cross]

If you are resident in the EU (which British residents are until Dec 31st 2020) you cannot own a non-VAT paid boat in EU waters. Period. Your country of citizenship is irrelevant, it's residence that counts.

 

[Irish Rover]

If you are resident in the EU (which British residents are until Dec 31st 2020) you cannot own a non-VAT paid boat in EU waters. Period. Your country of citizenship is irrelevant, it's residence that counts.

Your first sentence is not factually correct. If an EU resident buys a VAT NOT PAID boat in the EU they can get a 30 day Transit Log which affords them time to take the boat out of the EU.

 

[nortada]

Apologies if this has been covered before (I'm sure it has) but I couldn't find the relevant info in a search.
It may be simply a case of someone pointing me to a relevant thread somewhere

We are looking at buying a sailing yacht possibly by the end of this year, to primarily live aboard in the Med (at least 6 months a year)
I have so far ruled out quite a few boats that are 'VAT not paid' But should I?

1. Do I simply have to factor in an additional 20% and suck it up
2. What are the rules if VAT remains not paid? i.e. how long can the boat stay in Shengen waters, and how long must it leave for? I am guessing such a boat could not be wintered in a shengen country
3. We are British citizens , but I am also an Australian citizen (my wife isn't) I don't know if that could help or hinder? (especially after the brexit transitional period)

Many Thanks in Advance

Pete

You are right. This subject has been done to death in numerous threads on this forum.

 

[Chris_Robb]

Your first sentence is not factually correct. If an EU resident buys a VAT NOT PAID boat in the EU they can get a 30 day Transit Log which affords them time to take the boat out of the EU.

Irish Rover. Yes, I did overstate that. But my worry is the variations on enforcement that happens.
In reference to the post the 30 day TL is a concession only. Good news is that the most difficult customs in Greece at Kos allows it

Buying a VAT paid boat now will increase your market to the EU27 and the U.K. luckily we 'll have our cake and eat it! Who said that could not be done?

 

[Irish Rover]

Posted in error

 

[Irish Rover]

Irish Rover. Yes, I did overstate that. But my worry is the variations on enforcement that happens.
In reference to the post the 30 day TL is a concession only. Good news is that the most difficult customs in Greece at Kos allows it

Buying a VAT paid boat now will increase your market to the EU27 and the U.K. luckily we 'll have our cake and eat it! Who said that could not be done?

I'm a bit confused. I replied to Tony but you replied taking credit for what he overstated.
As regards your second paragraph I'm also confused. Is it not the case that the market size for most UK owned boats will be reduced after the fateful day. If your UK owned boat is in UK on the day will you not lose your EU VAT PAID status and if an EU resident buys it subsequently and wants to bring it back to the EU will they not have to pay the VAT again

 

[Chris_Robb]

I'm a bit confused. I replied to Tony but you replied taking credit for what he overstated.
As regards your second paragraph I'm also confused. Is it not the case that the market size for most UK owned boats will be reduced after the fateful day. If your UK owned boat is in UK on the day will you not lose your EU VAT PAID status and if an EU resident buys it subsequently and wants to bring it back to the EU will they not have to pay the VAT again

And why not - and what is this about taking credit for it - its just what I answered! I thought that the forum was an open discussion - and sometimes an issue becomes clearer even when mistakes are made and corrected by others - not that your was a mistake......I was over stateing the case - and you corrected me - thats fine by me!

Regarding UK and EU VAT after B-day, If you are correct if it remains in UK waters. However, you would miss the chance of having your cake and eating it, if you did NOT make sure the vessel was in EU27 waters over B-day.

 

[Irish Rover]

And why not - and what is this about taking credit for it - its just what I answered! I thought that the forum was an open discussion - and sometimes an issue becomes clearer even when mistakes are made and corrected by others - not that your was a mistake......I was over stateing the case - and you corrected me - thats fine by me!

Regarding UK and EU VAT after B-day, If you are correct if it remains in UK waters. However, you would miss the chance of having your cake and eating it, if you did NOT make sure the vessel was in EU27 waters over B-day.

I'm still confused about the first part but happy to move on.
I'd imagine very few UK owners who are normally based in the UK will be in a position to have their boats in the EU on "have your cake and eat it" day. Thereafter I'd also imagine there will be an increased market and increased prices for VAT NOT PAID boats in the EU with all UK residents eligible to buy them. The OP may well be on the right track buying a VAT NOT PAID boat now before the demand increases if he can keep it outside the EU until B day.

 

[Graham376]

I'd imagine very few UK owners who are normally based in the UK will be in a position to have their boats in the EU on "have your cake and eat it" day.

Someone (who shall remain nameless) suggested he may email a marina across the Channel to book in for B day, pay by debit/credit card and ask them to email the receipt. The boat would of course never arrive due to unforseen circumstances but would appear to have been there thus maintaining its status. Not very honest but who cares about screwing the EU.

 

[Tony Cross]

Your first sentence is not factually correct. If an EU resident buys a VAT NOT PAID boat in the EU they can get a 30 day Transit Log which affords them time to take the boat out of the EU.

Yes, you're right. That is true.

 

[Pete Carr]

You are right. This subject has been done to death in numerous threads on this forum.

My apologies, I did try various searches , but were fruitless

 

[Pete Carr]

Many thanks for everyone's input.
I guess a lot will now depend on what happens at the end of this year, regarding British requiring Shengen Visa's?