Vat Paid Invoice????

Nick_H said:
Sorry to keep this thread going, but I don't quite get that. The MCA Bill of Sale has no mention of where the transaction took place, so how can it be the key document that determines which state is responsible for VAT?

As an example, say a UK co. buys a British registered boat, reclaims the VAT, and then ships it out to the French Med to run a charter business. They then sell the boat to a British individual, and the parties complete an MCA Bill of Sale. As you said, VAT follows the goods, not the nationality of the buyer/seller, or where the boat is registered, so surely they have to account for French VAT on the sale? An MCA Bill of Sale doesn't prove to the Douanes that the boat wasn't purchased in France.
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I think you are correct, VAT would be payable in France on the transaction but as a separate payment to French Customs and not shown on the invoice from the seller to the buyer. In fact the buyer/seller would have choice when and where to pay the VAT. If the VAT% was lower in Spain, for example, the boat could be moved there prior to the sale taking place in order to pay the VAT. In fact that would be highly desirable because the VAT would be assessed on a notional value of the boat which, AFAIK, is usually lower than the actual value
 
...in addition:

Rightly or more likely wrongly, many dealers still don't supply a Bill of Sale with the first purchase.

They do supply an original invoice and and a declaration of conformity (where applicable), but some are still alien to Builders Certificates and Bills of Sale.

...some can't even be bothered with a Bill of Sale for future transactions which makes the lives of those of us that like the paperwork tidy very tricky indeed.

Rather than argue about the legality of having a VAT invoice available, let's simply leave it that it is highly sensible to have it along with all the other relevant paperwork needed to prove payment, title, history etc etc.
With any of the paperwork missing, ultimately the seller will lose out to a shrewd buyer who will negotiate accordingly.

Tom
 
Tranona said:
Could you explain that please?
It is very difficult to avoid VAT when buying a new boat.
...
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Sorry, I saw only now your question.
Though I'm sure you don't really need my explanations.
So, the only sense I can see in such question is to check if I know what I'm talking about.
Well, in this respect, feel free to think what you please! :)
 
The Dutch seem to have the right idea. In the absence of the original BoS or other proof, Custom officials will visit you and examine whatever paperwork is available. They will then search their own records and if satisfied that BTW (VAT) was paid, will issue you with a formal certificate to that effect. I don't know how much, if anything, is charged for this service as I assume the vendor paid whatever was due when we were purchasing our boat. I do know that the Dutch are proud of being the only EU country providing this service (only works for Dutch boats of course) and the certificate contains a sort of warning to other authorities to the effect that if the Dutch are satisfied, so should they be!
 
Nick_H said:
Sorry to keep this thread going, but I don't quite get that. The MCA Bill of Sale has no mention of where the transaction took place, so how can it be the key document that determines which state is responsible for VAT?

As an example, say a UK co. buys a British registered boat, reclaims the VAT, and then ships it out to the French Med to run a charter business. They then sell the boat to a British individual, and the parties complete an MCA Bill of Sale. As you said, VAT follows the goods, not the nationality of the buyer/seller, or where the boat is registered, so surely they have to account for French VAT on the sale? An MCA Bill of Sale doesn't prove to the Douanes that the boat wasn't purchased in France.
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The company selling the boat has to take care of the VAT. It is the tax inspectors of the country of registration of the company who are responsible for auditing the accounts of the company from time to time.

It is never the problem of a private buyer unless he is importing the boat into the EU. The bill of sale identifies that it is a private buyer in the EU who is buying a boat from an EU entity. The buyer does not have to account for the VAT. Although the seller will have to if it is not a private person doing the selling.

I think the company will have to be French in order to run a charter operation in France.

Companies usually end up in deep poo if they try to fiddle VAT returns.
 
michaelchapman said:
The company selling the boat has to take care of the VAT. It is the tax inspectors of the country of registration of the company who are responsible for auditing the accounts of the company from time to time.

It is never the problem of a private buyer unless he is importing the boat into the EU. The bill of sale identifies that it is a private buyer in the EU who is buying a boat from an EU entity. The buyer does not have to account for the VAT. Although the seller will have to if it is not a private person doing the selling.

I think the company will have to be French in order to run a charter operation in France.

Companies usually end up in deep poo if they try to fiddle VAT returns.
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I'm pretty sure HMRC are not responsible for ensuring that French VAT has been paid, regardless of where the company is registered. Yes, I know it's the sellers responsibility to account for VAT, I was responding to Tranona's ascertion that the BoS is the key document in deciding in which state VAT is due. The company does not have to be French to run a charter operation in France.
 
Nick_H said:
I'm pretty sure HMRC are not responsible for ensuring that French VAT has been paid, regardless of where the company is registered. Yes, I know it's the sellers responsibility to account for VAT, I was responding to Tranona's ascertion that the BoS is the key document in deciding in which state VAT is due. The company does not have to be French to run a charter operation in France.
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If the company is registered in France, it pays French VAT when the boat is sold. If it is registered in England, it pays UK VAT when the boat is sold.

There are a whole set of rules which I don't fully understand about where the company can/cannot be registered which is performing a service in France (and you thought the stuff about domicile and non residence for people was complicated).
 
michaelchapman said:
If the company is registered in France, it pays French VAT when the boat is sold. If it is registered in England, it pays UK VAT when the boat is sold.
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This is just nonsense. Do you literally just invent this stuff and make it up? Or guess it? VAT is payable (or not) depending upon what goods/servcies are sold in which locations, and there is a bunch of rules that determine the location. It has nothing at all to do with where companies are registered

michaelchapman said:
There are a whole set of rules which I don't fully understand about where the company can/cannot be registered which is performing a service in France
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Indeed, but within the EU they are mostly freedoms not prohibitions. Any company registered in the EU may undertake any business in France that a French company is allowed to undertake, under the "freedom of establishment" rule which is one of the "4 Freedoms" in the Treaty of Rome. But if a UK company sets up a business in France, it must account for and charge to its customers FRENCH VAT, not UK VAT
 
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Deleted User said:
Mmm, pretty clear recommendation by HMRC to carry proof of VAT paid documentation. Anybody here going to argue that HMRC are wrong?
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Yup, I will. I lost count, at about 6, of the number of sentences in that para 6.3 that are not correct in law. Starting with the first sentence. It's not very unusual to find HMRC notices that are wrong in law, but that one was particularly bad

But I agree your general/pragmatic view (and always have done) that the strict legalities are not the be all and end all of this, and if a foreign official in Doc Martins boards your boat life is easier if you have a VAT paid invoice or similar, (OR a valid reason why VAT isn't payable) and for that reason (only) it is an advantage to have such a piece of paper (or valid reason for no VAT, with supporting documents for that position).

I'd further agree that unless you are very familiar with the detialed rules and know how to stand yor ground, you're better off with the VAT-paid papers than the "I dont need to pay VAT papers", again for pragmatic reasons. But just on that point I have been boarded by the French douanes 3 times on my previous boat which wasn't VAT paid and had no VAT invoice or similar, and didn't have the slightest problem. They said "You paperwork is excellent jfm; have a nice day". So it can be done. (And that's consistent with my comment that HMRC's first sentence in 6.3 is wrong; I am an EU resident)
 
They said "You paperwork is excellent jfm; have a nice day".

Your French is rubbish. They said "OMG, its that bl**dy tax expert from YBW.. lets get out of here" ;)
 
I do know a guy who bought a new SS50, VAT free in the UK as he had it shipped to the Balearics. Sadly after the boat had been there some time, certainly over six months he bought it to mainland Spain our marina, thats how I met him, and whilst he was in our marina he was traced by the authorities in Mallorca, who demanded he pay 16% VAT or IVA as it is known in Spain plus a fine, for not declaring. Came to a lot of money on a new SS50, about €90k as I recall.

Also my own Princess which was first imported to Gib and then to Mar Menor in 1994 has in the paperwork a certificate to say the owner had been charged and paid spanish VAT back in 1994, cos he bought it new from Princess VAT free, and took it to Gib which was fine, its when he took it to Spain he had to declare, well I assume he declared he may have had his collar felt.
 
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Sun_Coast said:
I do know a guy who bought a new SS50, VAT free in the UK as he had it shipped to the Balearics. Sadly after the boat had been there some time, certainly over six months he bought it to mainland Spain our marina, thats how I met him, and whilst he was in our marina he was traced by the authorities in Mallorca, who demanded he pay 16% VAT or IVA as it is known in Spain plus a fine, for not declaring. Came to a lot of money on a new SS50, about €90k as I recall.
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That does sound like the precise facts have got lost in the telling. If it is as you say, the boat owner has no VAT liability in UK or Spain. The UK dealer should have accounted for Spanish VAT as a "distance sale". If on the other hand the dealer charged no VAT becuase the boat was first delivered to Jersey (say) and the owner then took it to Spain as a non NMT, then the owner would be liable for the Spanish VAT on the import. A further possibility is the owner bought it and paid UK VAT which was refunded under the NMT rules, and somehow managed to evade Spanish VAT due under NMT rules on import to Spain, which is very unlikely but if it happened the owner would be liable for the Spanish VAT

There is much devil in the detial as to where physically the boat went, whether or not it was an NMT as it crossed each border, who was the importer into Spain, etc. Without knowing those facts you should not deduce that the outcome in this case would apply in other superficially similar cases.
 
you should not deduce that the outcome in this case would apply in other superficially similar cases.


It was applied to my Princess also see post
 
jfm said:
Yup, I will. I lost count, at about 6, of the number of sentences in that para 6.3 that are not correct in law. Starting with the first sentence. It's not very unusual to find HMRC notices that are wrong in law, but that one was particularly bad

But I agree your general/pragmatic view (and always have done) that the strict legalities are not the be all and end all of this, and if a foreign official in Doc Martins boards your boat life is easier if you have a VAT paid invoice or similar, (OR a valid reason why VAT isn't payable) and for that reason (only) it is an advantage to have such a piece of paper (or valid reason for no VAT, with supporting documents for that position).

I'd further agree that unless you are very familiar with the detialed rules and know how to stand yor ground, you're better off with the VAT-paid papers than the "I dont need to pay VAT papers", again for pragmatic reasons. But just on that point I have been boarded by the French douanes 3 times on my previous boat which wasn't VAT paid and had no VAT invoice or similar, and didn't have the slightest problem. They said "You paperwork is excellent jfm; have a nice day". So it can be done. (And that's consistent with my comment that HMRC's first sentence in 6.3 is wrong; I am an EU resident)
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But did Les Flics ask for the VAT docs? I was boarded twice in about 3 months in SoF with my current boat and they didn't ask for VAT docs. They seemed to be more interested in insurance, registration and passports, in fact everything but VAT
 
Sun_Coast said:
I do know a guy who bought a new SS50, VAT free in the UK as he had it shipped to the Balearics. Sadly after the boat had been there some time, certainly over six months he bought it to mainland Spain our marina, thats how I met him, and whilst he was in our marina he was traced by the authorities in Mallorca, who demanded he pay 16% VAT or IVA as it is known in Spain plus a fine, for not declaring. Came to a lot of money on a new SS50, about €90k as I recall.

Also my own Princess which was first imported to Gib and then to Mar Menor in 1994 has in the paperwork a certificate to say the owner had been charged and paid spanish VAT back in 1994, cos he bought it new from Princess VAT free, and took it to Gib which was fine, its when he took it to Spain he had to declare, well I assume he declared he may have had his collar felt.
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Agree with jfm about your Balearic story. There must have been something specific which alerted the authorities. There are many ex VAT boats in the Balearics operating as charter or school boats. Also what I dont understand is why he seems to have fled the Balearics for mainland Spain instead of getting out of Spain altogether
 
Sun_Coast said:
you should not deduce that the outcome in this case would apply in other superficially similar cases.


It was applied to my Princess also see post
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Eh? You said your princess was exported when new, outside the EU, then later imported back into the EU. The sunseeker, you said, was sold new "VAT free in the UK as he had it shipped to the Balearics". So, shipped UK to Spain, ie not outside the EU.

The two boats therefore have totally different facts, at least from your description.
 
Deleted User said:
But did Les Flics ask for the VAT docs? I was boarded twice in about 3 months in SoF with my current boat and they didn't ask for VAT docs. They seemed to be more interested in insurance, registration and passports, in fact everything but VAT
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With that boat they knew I was using the commercial boat program. They would have guessed but they asked me and I said yes. They then checked I was operating the program correctly by checking my papers for 20mins. On one of the inspections they rang back to base to ask a tech question when we disagreed on something, and they conceded I was correct. They did not ask to see the VAT paid evidence for the boat; I think they assumed the boat wasn't VAT paid as that is what is meant by the commercial boat program. If I had said "you dont need to check whether I'm operating the commercial program correctly cos I am vAT paid" I expect they would then have asked to see my VAT -paid papers.
 
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