VAT on boat purchased outside the EU

[Petronella]

I'm thinking of buying a used boat in the Caribbean. Ex-European boats for sale there nearly always say whether or not European VAT has been paid or not. But does it really make any difference to me whether it is currently VAT registered?

My understanding is that whether or not the previous owner had paid VAT, I will be liable again if I bring it back to the UK/Europe as this importation constitutes a chargeable event. Is the position really as simple as this or am I missing something here?

[I do realise there are CE Marking issues too but let's leave them to one side for now].

 

[davidej]

Last time I looked at this, the best option was to sail to the Azores and register for VAT there. Was then only 12% but I don't know if it is still the same. There are plenty of agents to handle the paperwork.

 

[rob2]

I believe you are quite right, a boat that is VAT paid, exported and sold outside the EU loses its VAT paid status and is liable for VAT on re-importing it to the EU. Only the original owner who exported it may be able (subject to limitations) to return it to the EU and retain its VAT status.

If we are both right, then a one-time VAT status has no meaning or value for a sale outside tha UK VAT area - but the exact location of the sale may have some bearing, if within the UK VAT area.

Rob.

 

[Jamesuk]

Last time I looked at this, the best option was to sail to the Azores and register for VAT there. Was then only 12% but I don't know if it is still the same. There are plenty of agents to handle the paperwork.

I think on boat tax it is 5% in Croatia although perhaps this was something they were encouraging at the time of succession.

 

[davidej]

I believe you are supposed to register at first port of entry to the EU. I imagine it would be quite difficult to sail non stop to Croatia.

 

[Jamesuk]

I believe you are supposed to register at first port of entry to the EU. I imagine it would be quite difficult to sail non stop to Croatia.

Yacht in Transit - Also you can get an 18 month "temporary import" and so avoid paying VAT on a second hand boat. Every 18 months just sail to Gibraltar get some diesel and "re-temporary import it".

Cyprus, Madeira or Malta - good places I

Although perhaps be "proud" to pay VAT on a boat, I would frame it!

 

[duncan99210]

Yacht in Transit - Also you can get an 18 month "temporary import" and so avoid paying VAT on a second hand boat. Every 18 months just sail to Gibraltar get some diesel and "re-import it".

Although perhaps be "proud" to pay VAT on a boat, I would frame it!

The temporary importation exemption only applies to non EU nationals.

OP - you're not selling Petronella are you?

 

[macd]

The temporary importation exemption only applies to non EU nationals.

That's correct -- although EU residents, I think.

The OP's initial analysis of the VAT situation is correct.

The Azores is popular as an import destination for reasons obvious and not so obvious:
1. It's on the way to Europe.
2. The standard rate of VAT is relatively low: 18%.
3. The VAT paid will also hinge on the determined value of the boat. The Azores has been widely reported as quite accomodating on this.
4. There are agencies on the islands well-versed in VAT import affairs for yachts.
I've no doubt that Google will throw up a lot more detail.

The Azores is in the Eurozone, so it would be worth arranging the means of payment in that currency in advance.

 

[Stork_III]

Parts of the Caribbean are within the EU Customs zone. Would a sale in one of these avoid VAT?

 

[macd]

Parts of the Caribbean are within the EU Customs zone. Would a sale in one of these avoid VAT?

Indeed. Parts of the Carib are actually Departments of France. These and other "Outermost Regions" are, as you write, part of the EU customs area, but have much reduced rates and seem to be excluded from the main EU VAT area. Happy to be corrected on this.

"The French overseas departments are not regarded as Union territories for the purposes of applying VAT, in accordance with Article 6 of Directive 2006/112/EC"
From: http://ec.europa.eu/internal_market/outermost_regions/docs/report2011_en.pdf

 

[Tranona]

I think on boat tax it is 5% in Croatia although perhaps this was something they were encouraging at the time of succession.

That applied only in very restricted circumstances at the time of accession.

VAT rates vary very little across the EU, with most at +/- 20%, although Sweden and Greece are higher.

Establishing a value as a base for VAT is however variable across states because the rules leave it to customs to agree to the value. Therefore worth exploring with the possible ports of entry how they would value the boat.

 

[john_morris_uk]

I thought that there were also issues over the EU Craft directive over pleasure boats. (Or whatever the regulation is called?) Not insurmountable but not necessarily cheap.

 

[nauticalnomad]

What if you make it look as derelict as possible upon entry into eu. The thing could be valued at a minimal price if purchased as a project and you pieced it together to transport it to a yard for a "refit"..

 

[Tranona]

I thought that there were also issues over the EU Craft directive over pleasure boats. (Or whatever the regulation is called?) Not insurmountable but not necessarily cheap.

The OP clearly states that it is an "ex-European" boat he is considering. So, if it was built in the EEA it will either comply with the RCD if it is post 1998 or be exempt. It may also be exempt if it was in the EEA (which includes a number of caribbean territories) on the qualifying date in 1998. It is only boats built outside the EEA that need to comply with the RCD on import.

 

[john_morris_uk]

The OP clearly states that it is an "ex-European" boat he is considering. So, if it was built in the EEA it will either comply with the RCD if it is post 1998 or be exempt. It may also be exempt if it was in the EEA (which includes a number of caribbean territories) on the qualifying date in 1998. It is only boats built outside the EEA that need to comply with the RCD on import.

Good explanation. I was having a senior moment and couldn't remember the details (except that there are potentially problems with the RCD when importing a boat.)

 

[Petronella]

Thanks for your replies. Some very interesting points...

macd: I will read and digest the, very comprehensive .pdf file!

Stork_III: Yes, I had wondered about Martinique, Guadeloupe etc.

Duncan99210: Yes, she is for sale (https://joshuasale.wordpress.com/)

Tranoma: I had not appreciated the CE advantage of buying an EU built boat. Thanks for that.

J

 

[Tranona]

Tranoma: I had not appreciated the CE advantage of buying an EU built boat. Thanks for that.

Just be a bit careful as it is "built in the EEA" that is important which brings in a few other types of boats that were not built in what is now the EU. Also there are Boats built in the EU now that do not necessarily have a CE mark, and boats of EU design (such as Beneteau) which are actually built in the US and therefore do not have a CE mark.

The thing to look for is the Certificate of Conformity for a post 1998 boat (which an EU or EEA built boat will have) or that the boat was built in the EEA (pre 1998). The certificate will normally be bound in the original owners handbook and you may even find a CE plate still attached to the boat.

J