VAT/TVA 3 "simple" questions???

[Dave100456]

Can someone cast light on these 3 statements/questions pls?

1) As a UK resident if I buy a EU tax paid boat in the EU from the EU private seller I think it retains EU tax paid status and can remain in free EU circulation under my ownership.

2) However, I have read that if I sail the boat out of the EU (for say a year) it loses its tax paid status; correct?

3) OR.... As a UK citizen, can I get EU RGR on the boat when it comes back into the EU or has it lost EU tax paid status for good?

Thanks

Dave

 

[Irish Rover]

1. Yes
2. No
3. Yes and no respectively

 

[Tranona]

Just ensure that when you leave/return you clarify with customs the exact procedure you need to follow to get RGR as the implementation is the responsibility of individual states. As you might expect processes may vary and not all local customs will necessarily follow the same processes!

 

[Dave100456]

Irish Rover & Tranona,
Thank you both for the quick succinct replies, just what I wanted and much appreciated.
Cheers!

 

[Neil_Y]

Irish Rover & Tranona,
Thank you both for the quick succinct replies, just what I wanted and much appreciated.
Cheers!

That doesn't actually agree with what I've understood from rules and contacts I've had with Swedish tax authorities. As I understand it you need to be an EU resident t be able to keep it in vat paid circulation, or as a UK resident you have (TAP) 18months and it then has to go out of EU for 24hrs. This is not tha same as VAT paid free circulation, it's temporary import. I looked at this when looking at buying a boat (I'm a Swedish resident, UK citizen) I'm going to search through the Swedish rules again ! I'm not a tax lawyer (I'm buying a Swedish boat and keeping it in Sweden with maybe a trip to UK some time.

 

[Irish Rover]

That doesn't actually agree with what I've understood from rules and contacts I've had with Swedish tax authorities. As I understand it you need to be an EU resident t be able to keep it in vat paid circulation, or as a UK resident you have (TAP) 18months and it then has to go out of EU for 24hrs. This is not tha same as VAT paid free circulation, it's temporary import. I looked at this when looking at buying a boat (I'm a Swedish resident, UK citizen) I'm going to search through the Swedish rules again ! I'm not a tax lawyer (I'm buying a Swedish boat and keeping it in Sweden with maybe a trip to UK some time.

In the scenario outlined by the OP no vattable transaction occurred - he bought a VAT paid boat in the EU from a private citizen and the VAT status of the boat didn't change. The same should be true for you if you buy a VAT paid boat in Sweden. When you visit the UK with your boat you will need to apply for TA there.

 

[AngusMcDoon]

As I understand it you need to be an EU resident t be able to keep it in vat paid circulation.

They are wrong. You don't.

 

[lustyd]

Just ensure that when you leave/return you clarify with customs the exact procedure you need to follow to get RGR as the implementation is the responsibility of individual states. As you might expect processes may vary and not all local customs will necessarily follow the same processes!

Any thoughts on which is the best one for this?

 

[temptress]

Can someone cast light on these 3 statements/questions pls?

1) As a UK resident if I buy a EU tax paid boat in the EU from the EU private seller I think it retains EU tax paid status and can remain in free EU circulation under my ownership.

2) However, I have read that if I sail the boat out of the EU (for say a year) it loses its tax paid status; correct?

3) OR.... As a UK citizen, can I get EU RGR on the boat when it comes back into the EU or has it lost EU tax paid status for good?

Thanks

Dave

The UK ceased to be part of the EU customs union at 23:00 GMT on 31 December 2020. The UK is now considered by the EU to be a “third country” and as such VAT treatment of UK pleasure craft in EU waters and EU pleasure craft entering UK waters is affected.

You resident status/Nationality impacts how long YOU (a human) can stay (or not stay) in the EU. A boat (goods) is differnet and treted differently.

If the Boat is in free circulaiton in the EU when you purchase it, it can continue to be kept in the EU wihtout the need to pay additional sales tax (VTS/TVE etc). However once you take the boat out of EU waters the situation becomes compicated and there is no one size fits all set of rules.

When you take the vessel out of the EU it loses it's TAX paid status. However if you are a resident of the EU you can re-import it wihtout additional cost (and often paperwork) as long as the boat dose not spend too much time out of the EU. This is similar concept to the UK 'returned goods relief'. Usually if you are NOT resident in the EU then when the vessel is re-imported into thje EU you ar eliable for VAT. However usually, as a non EU resident, you may keep a private boat in EU waters without paying the import VAT of 20% by using the Temporary Admission or Importation scheme for up to 18 months.

Similarly if you bring the Boat to the UK you are liable to pay VAT on the boat unless you qualify for 'Returned Goods relief' which is unlikely unless you originally took the boat from the UK to the EU in your ownership.

• Temporarily leaving the UK

If you are a UK (that is, non-EU) resident and your vessel was in the UK on 31 December 2020, you may temporarily leave the UK to sail into EU waters, for the purposes of a holiday or competition under the Temporary Admission procedure (“TA”) without paying VAT, provided your vessel is registered outside of the EU - which now includes the UK - and owned by a person established outside of the EU. Your vessel would be allowed to remain in EU waters for up to 18 months, but may not be sold or chartered whilst in EU waters and under the TA provisions.

• Bringing an EU VAT paid pleasure craft into the UK

If you are a UK resident owner of a pleasure craft upon which EU VAT has been paid, your vessel was in the one of the remaining EU 27 countries on 31 December 2020 and you bring your vessel into UK waters, VAT and import duty will need to be paid on the current value of the vessel at the time of importation.

If you are an EU resident and your pleasure craft was in EU waters on 31 December 2020, your vessel may enter and remain in UK waters for private use by a non-UK resident for up to 18 months without incurring UK VAT under the temporary admission procedures.

• Bringing back a UK VAT paid boat into the UK (Returned Goods Relief)

If you have previously paid UK VAT on your vessel and exported it to the EU, you can bring it back to the UK without having to pay VAT again (Returned Goods Relief), provided:

• it is returned within 3 years of the date of export by you (there must have been no change of ownership) (the “three year rule”); and
• it has not undergone more than running repairs outside the UK that did not increase its value.

HMRC advises vessel owners to carry on board at all times evidence of their vessel’s UK VAT status, such as an original invoice or receipt or evidence that VAT was paid on importation. Readers should note that a registration document does not prove the UK VAT status of a vessel as there is no link between registration of a vessel and payment of VAT. Upon arrival from outside of the UK, you must fly the yellow “Q” flag as soon as you enter UK waters.

Prospective boat owners

• Buying a pleasure craft in the UK for use in the UK

Brexit has not affected the payment of VAT in this scenario. VAT must be paid at 20% on all new vessels purchased in the UK by UK residents where the vessel is to be kept in the UK.

• Buying a pleasure craft in the UK for use in the EU

If you are a UK resident buying a vessel for use in the EU you may be able to purchase the vessel VAT free if the seller arranges for export to a destination outside of the UK and you take delivery of the vessel there.

If you are a non-UK resident and are considering buying a pleasure craft in the UK but intend to permanently keep it in the EU, you may be eligible to purchase your vessel VAT-free using the Sailaway Boat Scheme. The scheme does not apply to vessels which are for business use or which are exported as cargo and vessels must be exported within 6 months of delivery from the manufacturer or supplier. Local VAT advice should be sought as to whether VAT will need to be paid in the EU export destination.

 

[Tranona]

The UK ceased to be part of the EU customs union at 23:00 GMT on 31 December 2020. The UK is now considered by the EU to be a “third country” and as such VAT treatment of UK pleasure craft in EU waters and EU pleasure craft entering UK waters is affected.

You resident status/Nationality impacts how long YOU (a human) can stay (or not stay) in the EU. A boat (goods) is differnet and treted differently.

If the Boat is in free circulaiton in the EU when you purchase it, it can continue to be kept in the EU wihtout the need to pay additional sales tax (VTS/TVE etc). However once you take the boat out of EU waters the situation becomes compicated and there is no one size fits all set of rules.

When you take the vessel out of the EU it loses it's TAX paid status. However if you are a resident of the EU you can re-import it wihtout additional cost (and often paperwork) as long as the boat dose not spend too much time out of the EU. This is similar concept to the UK 'returned goods relief'. Usually if you are NOT resident in the EU then when the vessel is re-imported into thje EU you ar eliable for VAT. However usually, as a non EU resident, you may keep a private boat in EU waters without paying the import VAT of 20% by using the Temporary Admission or Importation scheme for up to 18 months.

Similarly if you bring the Boat to the UK you are liable to pay VAT on the boat unless you qualify for 'Returned Goods relief' which is unlikely unless you originally took the boat from the UK to the EU in your ownership.

• Temporarily leaving the UK

If you are a UK (that is, non-EU) resident and your vessel was in the UK on 31 December 2020, you may temporarily leave the UK to sail into EU waters, for the purposes of a holiday or competition under the Temporary Admission procedure (“TA”) without paying VAT, provided your vessel is registered outside of the EU - which now includes the UK - and owned by a person established outside of the EU. Your vessel would be allowed to remain in EU waters for up to 18 months, but may not be sold or chartered whilst in EU waters and under the TA provisions.

• Bringing an EU VAT paid pleasure craft into the UK

If you are a UK resident owner of a pleasure craft upon which EU VAT has been paid, your vessel was in the one of the remaining EU 27 countries on 31 December 2020 and you bring your vessel into UK waters, VAT and import duty will need to be paid on the current value of the vessel at the time of importation.

If you are an EU resident and your pleasure craft was in EU waters on 31 December 2020, your vessel may enter and remain in UK waters for private use by a non-UK resident for up to 18 months without incurring UK VAT under the temporary admission procedures.

• Bringing back a UK VAT paid boat into the UK (Returned Goods Relief)

If you have previously paid UK VAT on your vessel and exported it to the EU, you can bring it back to the UK without having to pay VAT again (Returned Goods Relief), provided:

• it is returned within 3 years of the date of export by you (there must have been no change of ownership) (the “three year rule”); and
• it has not undergone more than running repairs outside the UK that did not increase its value.

HMRC advises vessel owners to carry on board at all times evidence of their vessel’s UK VAT status, such as an original invoice or receipt or evidence that VAT was paid on importation. Readers should note that a registration document does not prove the UK VAT status of a vessel as there is no link between registration of a vessel and payment of VAT. Upon arrival from outside of the UK, you must fly the yellow “Q” flag as soon as you enter UK waters.

Prospective boat owners

• Buying a pleasure craft in the UK for use in the UK

Brexit has not affected the payment of VAT in this scenario. VAT must be paid at 20% on all new vessels purchased in the UK by UK residents where the vessel is to be kept in the UK.

• Buying a pleasure craft in the UK for use in the EU

If you are a UK resident buying a vessel for use in the EU you may be able to purchase the vessel VAT free if the seller arranges for export to a destination outside of the UK and you take delivery of the vessel there.

If you are a non-UK resident and are considering buying a pleasure craft in the UK but intend to permanently keep it in the EU, you may be eligible to purchase your vessel VAT-free using the Sailaway Boat Scheme. The scheme does not apply to vessels which are for business use or which are exported as cargo and vessels must be exported within 6 months of delivery from the manufacturer or supplier. Local VAT advice should be sought as to whether VAT will need to be paid in the EU export destination.

Most of this is either wrong or totally irrelevant to the OPs question which has been answered correctly in the first 2 responses.

Just to clarify, the VAT status of a boat and therefore freedom of circulation within the EU is NOT connected to the citizenship or residence of the owner(s) nor its Country of registration. To qualify for RGR it is necessary to show that the boat is EU VAT paid (either by documentary evidence or under the terms of the withdrawal agreement) is being returned by the same owner (that is has not changed ownership outside the EU) and returned normally within 3 years. These rules have been in place unchanged since 1992 when the common EU VAT zone came into being.

The OP does not say he is bringing the boat to the UK, but if he does, and is resident in the UK he will have to import it and pay VAT. If he is resident outside the UK then the boat is eligible for TA.

 

[temptress]

Most of this is either wrong or totally irrelevant to the OPs question which has been answered correctly in the first 2 responses.

Just to clarify, the VAT status of a boat and therefore freedom of circulation within the EU is NOT connected to the citizenship or residence of the owner(s) nor its Country of registration. To qualify for RGR it is necessary to show that the boat is EU VAT paid (either by documentary evidence or under the terms of the withdrawal agreement) is being returned by the same owner (that is has not changed ownership outside the EU) and returned normally within 3 years. These rules have been in place unchanged since 1992 when the common EU VAT zone came into being.

The OP does not say he is bringing the boat to the UK, but if he does, and is resident in the UK he will have to import it and pay VAT. If he is resident outside the UK then the boat is eligible for TA.

I stand by what I have posted. please read it .

 

[Irish Rover]

I stand by what I have posted. please read it .

I agree with @Tranona - your post is inaccurate in some respects. More to the point your post is unnecessarily long and detailed. The OP asked for clarification on 3 specific points or issues. Try answering these in concise simple terms instead of blinding the OP with how knowledgeable you think you are.

 

[Tranona]

I stand by what I have posted. please read it .

I have read it - and it is mostly just a regurgitation of UK government guidelines which are nothing to do with the OP who has an EU VAT paid boat. Your third paragraph is simply wrong, Both for the EU and UK. you do not have to be a resident to claim RGR.

 

[Tranona]

Any thoughts on which is the best one for this?

Just thoughts really rather than direct experience, but it would make sense to use an exit and entry port that has a lot of such transactions. Unlike the UK where entry and exit for yachts is essentially handled centrally on line or over the phone through the C1331 system and the newer portals most EU states have physical customs offices in individual ports and clearance is carried out on the spot by local officers. Logically the states that have the most traffic in and out of the EU are France, Spain and Portugal for going west and Greece for going east. Now the UK is out of the EU the northern states will see an increase in activity, but the trend here seems to be toward on line clearance.

Given the RGR rule has been in place for nearly 30 years pretty sure the major ports will have well established routines. The potential problems post Brexit are likely to be proof of VAT status, particularly for boats that acquired it through the Withdrawal Agreement and the common issue of conflating flag state, ownership and residence with VAT status.