VAT on possible temporary export

[Portofino]

If a none EU resident was to buy a boat manufactured in the EU , for example a Brit buying a popular Italian brand , can the vessel s hand over for the sake of starting the 18 M VAT free circulation clock be undertaken with out the need to turn up in N Africa or other none EU state ?



Ie - Is there an acceptable distance off shore where by technically the boats considered out of EU waters for this initial start and hand over ?

Kinda using a electronic AIS trace or similar to prove it’s left ?



If so why can’t this be repeated again …..saving the schlump to N Africa every 18 Months ?



Read somewhere a few years ago in “Barche “the Italian government had gained a concession to do this to support there SY and wider boat building industry .For the initial hand over .

Thats why I enquire .

 

[Tranona]

The operation of TA is left entirely to state customs. There is no EU wide procedure. There is in fact a great deal of discretion. In Greece for example, they stop the clock when the boat is not being officially used and paying the cruising tax. This is sensible because of the large number of boats used for a few weeks or months at a time, plus they have a surplus of Port Police to manage the paperwork.

 

[DAW]

It is the same thing different words. You are allowed temporary importation with nil paperwork ( other than that you maybe wise to keep to prove the 18 months ) for 18 months. Then you must leave ( for a few minutes is fine ) and then come back for another 18 months.

As mentioned above by others, details of how the TA scheme is implemented vary greatly from country to country, but in general it is not correct to say you can import your boat temporarily into the EU, stay for 18 months and then leave with "nil paperwork". If you intend to cruise in the Mediterranean for any length of time there are any number of organisations that can (and do on occasions) request details of your boat's registration, ownership and VAT status. If you cannot demonstrate EU VAT-paid status they will ask for evidence of when and where you first entered EU waters.

I don't know about Spain and Italy, but in French waters to satisfy the "Douane" police random checks you need an official document issued by the customs or tax authority of your first country of entry. To obtain this you usually have to go to the customs authorities in the port or to the local tax office, properly record the time and place of entry, pay an administrative fee and obtain and keep the relevant official documentation. Just turning up in a marina and keeping the invoice will not satisfy the French customs authorities if you are unlucky enough to be inspected.

 

[jrudge]

There are 2 sides to this and as I said you maybe wise to get paperwork for the reasons you ( and I ) gave.

However the temp importation to the eu itself has no paperwork requirement. You just arrive and leave. However as I said if asked you have to prove it.

 

[truro expat]

Can i just ask a question, I ave heard that if you buy a VAT free boat in France or EU and you do the sale outside French waters 14 miles or so offshore and when you return to France as the new owner the 18 months starts again? Is that correct?

In addition can you do this via family and transfer the boat owenership around the familt so you do not need to get to a country outside the EU to reset the clock?

 

[Tranona]

Can i just ask a question, I ave heard that if you buy a VAT free boat in France or EU and you do the sale outside French waters 14 miles or so offshore and when you return to France as the new owner the 18 months starts again? Is that correct?

In addition can you do this via family and transfer the boat owenership around the familt so you do not need to get to a country outside the EU to reset the clock?

Broadly correct. A new owner starts the clock if they are non resident. the actual process depends on the the state you are in when you buy the boat and enter the EU. If you buy through a broker they will arrange this for you. You do not necessarily have to go to another country to renew - only leave territorial waters. Again you have to ask local customs for their procedures. A local broker or agent can deal with it for you.

 

[jrudge]

If you sell the boat while under temp importation then duty is payable.

Leaving territorial waters not arriving somewhere else is a grey area and untested and has many conflicting views.

Given the sums involved which can be large and the additional time / cost to get to an overseas port why take the risk ?

 

[DAW]

Can i just ask a question, I ave heard that if you buy a VAT free boat in France or EU and you do the sale outside French waters 14 miles or so offshore and when you return to France as the new owner the 18 months starts again? Is that correct?

In addition can you do this via family and transfer the boat owenership around the familt so you do not need to get to a country outside the EU to reset the clock?

There are too many variables in your question to give a simple answer. To be in the EU and non VAT-paid a boat must normally be new, already present under TA arrangements and owned by someone not resident in the EU, or involved in some form of commercial activity such as charter. Purchase of a new vessel from a broker/builder is relatively straightforward, but as the future owner of a used boat you would want to ensure that the seller has properly resolved any tax issues related to his residency and period of ownership before you take possession, otherwise you run the risk that the liabilities transfer to you with the vessel. This will include dealing with import/export to and from the EU.

I was recently involved in the purchase of a vessel used for charter purposes. The seller was a Cayman Islands company (non-EU), the boat was registered in Malta (EU), had been imported to the EU in Malta under a TA arrangement, was registered for charter use in Greece, and was physically located in Croatia. We wanted to transfer ownership to a new company and move the vessel to France/Spain for mixed private/charter use. In order to complete the sale, the vessel had to be first moved back to Greece and deregistered for charter purposes. It was then exported from the EU by the current owner (with departure duly registered in Greece and all liabilities settled by the current owner). It was then sailed into international waters where transfer of ownership took place. Once under new ownership, the vessel was moved to Malta to allow survey and registration formalities for the new owner to be completed. Finally it was relocated to France and reimported to the EU in France under a new TA arrangement. Its presence was then registered with the French authorities as a Malta flagged vessel available for charter use in France.

It's a hugely complex area with extensive anti-avoidance provisions. As mentioned by jrudge, the amounts of money involved can be material relative to the value of the boat, so why take the risk of trying to flout the rules.

 

[Bandit]

I know, it is not quite the Med weather wise but assuming you are a UK resident, You could buy the boat VAT free, moor it in Guernsey or Jersey and use it tax free for a year or two (or More?) tax free, de snag it in CI and either send to the med for 18months tax free and import it paying VAT in Med country or import it to UK on arrival, but with Med and UK it would then be an 18month or more old boat by then so you would pay lower VAT.

 

[Hurricane]

I know, it is not quite the Med weather wise but assuming you are a UK resident, You could buy the boat VAT free, moor it in Guernsey or Jersey and use it tax free for a year or two (or More?) tax free, de snag it in CI and either send to the med for 18months tax free and import it paying VAT in Med country or import it to UK on arrival, but with Med and UK it would then be an 18month or more old boat by then so you would pay lower VAT.

Why not just buy it VAT free for export in the UK and TA it into the Med? - Assuming you are UK resident.

 

[Irish Rover]

If you sell the boat while under temp importation then duty is payable.

Leaving territorial waters not arriving somewhere else is a grey area and untested and has many conflicting views.

Given the sums involved which can be large and the additional time / cost to get to an overseas port why take the risk ?

In practice this is not so. I previously bought A VAT not paid boat in Greece and had no issues. Customs issued a new transit log for 18 months once they were satisfied I was not an EU resident.
I'm currently buying a VAT not paid boat in Croatia which will have to be physically taken out of Croatia once I take possession but there's no question of the sale creating a VAT liability.

 

[dunedin]

In practice this is not so. I previously bought A VAT not paid boat in Greece and had no issues. Customs issued a new transit log for 18 months once they were satisfied I was not an EU resident.
I'm currently buying a VAT not paid boat in Croatia which will have to be physically taken out of Croatia once I take possession but there's no question of the sale creating a VAT liability.

Is there perhaps a distinction between selling a vessel which was commercially operated (eg ex charter yacht) vs a yacht privately imported under the Temporary Import regime?

 

[Irish Rover]

Is there perhaps a distinction between selling a vessel which was commercially operated (eg ex charter yacht) vs a yacht privately imported under the Temporary Import regime?

The one in Greece was privately owned by a Swiss couple and in Greece under TA. The one I'm buying now in Croatia is ex charter.

 

[Bandit]

Why not just buy it VAT free for export in the UK and TA it into the Med? - Assuming you are UK resident.

I did not follow the OP's original Idea 18 months in Med the bring it back to the UK.
If new boat is a UK build it is useful too have it near by to factory for warranty issues. Warranty issues are complex to sort out in a small port in the middle of nowhere and very time consuming. A friend told me the sweet spot when you own a boat is after the second year when you have sorted out all of the snagging problems under warranty and before 8 to 10 years later when things start to go wrong with age.