VAT Problems in Croatia .... again!!! This is getting beyond a joke ....

[Baggywrinkle]

I am buying a German registered EU VAT paid boat in Croatia from a German citizen and I am going to register it on the U.K. Ships Register .... this should be simple - the boat is EU VAT paid, there is an invoice to show this, and the boat has never left Croatia - it's union goods currently in free circulation sitting in a marina in Croatia.

Guess what the Broker was told when going to a freight agency to check up on the VAT paperwork?

This morning I was at the office of one freight agency, just to check the protocol if you decide to register the boat under the UK flag.
In that case, the export has to be done with the boat, and again import in the territory of EU. Meaning, the VAT status of the boat will be lost, and later if you decide to sell the boat in the territory of EU, for individuals with the residence in EU that could be an issue, because they will have to import the boat again, and therefore pay the customs duties.

You couldn't make this up.

I don't want or need to export the boat but it looks like this freight agency thinks that registering a boat in the UK requires it to exported, lose it's VAT status, and then be imported under TA. WTF???

Which flag the boat is registered under is irrelevant, it's the boat and it's current status as union goods, along with it's location at the point of sale, that are important. It will be sold in Croatia with a bl00dy invoice detailing VAT from one EU resident to another EU resident.

Why does this keep happening? I was told that my last U.K. registered boat would lose it's VAT status if registered in Slovenia or Croatia by the new owner - after a bit of a fight, and production of a T2L it was solved ...

... but here we go again. FFS .... ...

Is anyone else having these kind of issues in the EU?

 

[Tranona]

They really do not understand EU law. Ask them to show the law that requires you to do what they say - either Croatian or EU. Don't envy you the battle. It would be exactly the same if you were not EU resident. There is no EU law that says an EU VAT paid boat can only be owned by an EU resident.

 

[Baggywrinkle]

They really do not understand EU law. Ask them to show the law that requires you to do what they say - either Croatian or EU. Don't envy you the battle. It would be exactly the same if you were not EU resident. There is no EU law that says an EU VAT paid boat can only be owned by an EU resident.

They can't .... I'm currently trawling the taxation-customs.ec.europa.eu website for the related law, and when I find it I'll download the Croatian translation and go stuff it so far up '*%&!§%§%!!!!! ... actually, I probably wont, I will be very calm and polite, like last time, I am British after all ... count to 10 ... calm down ... these things will get resolved in the end.

 

[Irish Rover]

Sorry for your trouble, but wtf has a "freight agency" got to do with this?

 

[Baggywrinkle]

Sorry for your trouble, but wtf has a "freight agency" got to do with this?

I really don't know ... the brokers use them to check VAT status from the documents supplied by the seller .... they are the agencies that issue T2Ls, I got one in order to sell my last boat VAT paid.

I could use my German citizenship and residency to get a German registration from the ADAC for about €30 and the problem would go away .... that's my backup if the manufactured UK Flag problem proves to be unsurmountable. Then I will cancel the German registration and register it in the U.K. ... with a full set of U.K. paperwork and the invoice stating VAT paid it won't be a problem down the line ... just hassle I don't need.

 

[Seastoke]

Baggy you are angry because you are trying to manipulate two systems , that’s why wanted to leave the German union .

 

[Seven Spades]

If the boat is exported and re-imported it will have the benifit of returned goods relief so it will retain its VAT paid status provided it does not changed hands whilst outside the EU.

 

[capnsensible]

, that’s why wanted to leave the German union .

How's that working out?

 

[benjenbav]

I suspect the freight agency folk are assuming (even if the broker isn’t) that the boat is also being moved out of the EU. Otherwise why would anyone be asking their opinion?

Tell the broker to speak to someone whose job it is to advise on the law and come back to you.

 

[Baggywrinkle]

I suspect the freight agency folk are assuming (even if the broker isn’t) that the boat is also being moved out of the EU. Otherwise why would anyone be asking their opinion?

Tell the broker to speak to someone whose job it is to advise on the law and come back to you.

That's basically what I assume too ... sent the broker this ...

Is it considered an exportation, if I register my boat with a non EU registration within the European Union?
a simple answer is NO. Registration is not related to the tax status. The definition for export is: “bringing Union goods outside the customs territory of the Union. Union goods leaving the customs territory of the Union should be placed under the export procedure”. You must therefore submit an export declaration.

Boat, Yacht & MMSI Registration | Boat flag registration specialist | About us

I’m British. Can I buy a vessel with Union status and keep it in the EU? Or do I need to re-register it?
If the seller of the boat can show proof that VAT has already been paid in the EU, then the boat will retain the status of Free Movement on purchase, even if you choose to flag it to a UK registry. If you wish to import the boat into the UK you will be liable to pay UK VAT. If you want to keep it in the EU then, as it already has Union status, you can do so. Essentially, as far as customs is concerned, the ownership of a vessel is not relevant, it is VAT paid Union status which is relevant.

BOAT SALES - VAT - How does leaving the EU affect the VAT status? - Boatshed Knowledge Base

EU Law: NOTE ON MEANS OF TRANSPORT
Therefore, in principle, means of transport located in the Union or released for free circulation therein are deemed to be Union goods. The flag, plate or any other means of registration of the means of transport is irrelevant to determine the customs status to means of transport, except in the case of motorised road vehicles mentioned in Article 208 of the UCC-Implementing Act (UCC-IA) 2 . This means that, for example, the fact that a boat flying a flag of a third country and/or that an aircraft is registered in a third country does not necessarily mean that this boat is a non-Union good, i.e. it can have Union status.

https://taxation-customs.ec.europa.eu/system/files/2021-07/Note%20on%20means%20of%20transport.pdf
https://taxation-customs.ec.europa.eu/customs-4/union-customs-code/ucc-guidance-documents_en

The second link may have document translations into Croatian.

I'm confident I'll get it sorted out, just a pita.

 

[Baggywrinkle]

Baggy you are angry because you are trying to manipulate two systems , that’s why wanted to leave the German union .

 

[Hooligan]

Not sure if this is relevant as your boat hasn’t left Croatia but re T2Ls HMRC just sent me the following advice

The Union Customs Code Implementing Regulation (EU) 2015/2447 (Article 199) details means of proving the customs status of Union goods (proof of Union status), which might include the invoice or a T2L. Whilst the UK was a member of the EU, it was possible to obtain a retrospective T2L from HMRC. According to the European Commission, documentation such as a T2L or a customs opinion letter, issued by the UK before the end of the Brexit transition period, is no longer valid in the EU. The European Commission advised that "for a boat lying in the EU at the end of the transition period, the person concerned needs to submit a new request to obtain a proof of Union status to one of the Customs authorities in the EU”.

I am focussed on the Greek shambles but sounds like Croatia as bad. I have an Irish passport and will reflag the boat in Ireland now along with many others who are doing this. In fact any U.K. citizen can do this as well under Irish rules. Apart from never having to deal with EU officials again you get another advantage. Insurance Premium Tax is lower over there so likely your premiums go down. Downside is the admin to get it done.

 

[Zing]

If I were you, I’d flag in the EU. It will eliminate the risk any moronic authorities that don’t know the rules from causing you any hassle. If it can happen once, it can happen again.

 

[Baggywrinkle]

If I were you, I’d flag in the EU. It will eliminate the risk any moronic authorities that don’t know the rules from causing you any hassle. If it can happen once, it can happen again.

It's a matter of principle ... ... and the more port authorities that eventually get it the better. German registration is my plan B

 

[benjenbav]

It's a matter of principle ... ... and the more port authorities that eventually get it the better. German registration is my plan B

I think I have heard it suggested that Polish registration is becoming a popular EU choice as being relatively unbureaucratic.

 

[benjenbav]

I think I have heard it suggested that Polish registration is becoming a popular EU choice as being relatively unbureaucratic.

And the flag is an upside down version of Monaco’s. So you could look rather chic…

 

[LePacha]

A distressed Monaco?

 

[Baggywrinkle]

A distressed Monaco?

I can't afford anything in Monaco, not even their flag

 

[Irish Rover]

Seems from what you say Baggy the Croatians want it every way. You registering in the UK is regarded as an export for VAT purposes but when I did the same recently it wasn't enough to enable the previous owner to reclaim VAT - we had to go through a completely separate export procedure. Give them hell.

 

[prinex]

As long as you dont want to import the boat in the uk ... leave it registered in croatia ? Croatia allows non-resident to register you just need a croatian tax number, a local agent in Croatia can do this for you.
Or does it work only for EU citizens ? Not sure..