VAT - When is it not payable?

[Monique]

Looking at a Belgian registered yacht. The boat is from 1990; the first owner was a Swiss and paid no VAT. Second owner is French and registered the boat in Belgium.

Boat is VAT NOT PAID. What are the facts?

TA as always.

 

[MoodySabre]

Second owner didn't declare it. VAT payable by you when boat is brought the UK or even if left in EU. You could even be charged VAT on value when it was new unless the Swiss owner kept it outside the EU. I'd get the vendor to pay the VAT before I bought it.

 

[Monique]

Thank you. Boat was kept by the Swiss in Spain. Second owner too.

Will tell the second owner the facts. Thank you.

 

[Monique]

Thank you. Boat was kept by the Swiss in Spain. Second owner too.

Will tell the second owner the facts. Thank you.

 

[Tranona]

Not quite as simple as suggested. Much more information needed about its history, where the transactions took place and the status of the owner(s). Registration is largely irrelevant for VAT purposes. You need to look at each individual transaction to determine if a "chargeable event" took place, where the transaction took place and who would have been responsible for accounting for VAT at the time. If there was a liability in the past it lies with the person responsible, but the debt may also attach to the boat.

If it proved that the boat has been illegally imported into the EU then it is a criminal offence with penalties and VAT would be payable by the person who committed the offence.

 

[KellysEye]

Are you sure no VAT has been paid it's a legal requirement to pay it when you buy a boat and was in 1990 as it is now.

 

[AndrewB]

Will tell the second owner the facts. Thank you.

It's usually easier to negotiate a price reduction than to expect the present owner to pay. Be prepared for the owner to tell you that the unpaid VAT was taken into account in the asking price.

 

[Tranona]

Are you sure no VAT has been paid it's a legal requirement to pay it when you buy a boat and was in 1990 as it is now.

Not in Switzerland! Read the post.

 

[Tranona]

It's usually easier to negotiate a price reduction than to expect the present owner to pay. Be prepared for the owner to tell you that the unpaid VAT was taken into account in the asking price.

Not as simple as that. You can't just walk into customs and pay. they will need the details of the transaction or the circumstances of the import to calculate the tax, determine if there are any penalties to pay and assign responsibility for payment.

 

[KellysEye]

>Not in Switzerland! Read the post.

The OP said the boat was bought by a Swiss and the VAT rate there is 8%. I'm not aware that Switzerland makes yachts so it was presumably bought in a different country and registered in Switzerland and then Belgium by the French owner, VAT would have been paid in the country it was bought in. If the boat was delivered by ship to Spain without VAT paid then VAT would be paid there on arrival. Another issue is if you keep a boat in Spain for more than six months and the owner spends more than six months on the boat there is a matriculation tax that can be avoided by registering the boat under a Spanish flag. So it seems no owner stayed more than six months. Any way you look at it VAT must have been paid or fraud committed.

 

[Tranona]

>Not in Switzerland! Read the post.

The OP said the boat was bought by a Swiss and the VAT rate there is 8%. I'm not aware that Switzerland makes yachts so it was presumably bought in a different country and registered in Switzerland and then Belgium by the French owner, VAT would have been paid in the country it was bought in. If the boat was delivered by ship to Spain without VAT paid then VAT would be paid there on arrival. Another issue is if you keep a boat in Spain for more than six months and the owner spends more than six months on the boat there is a matriculation tax that can be avoided by registering the boat under a Spanish flag. So it seems no owner stayed more than six months. Any way you look at it VAT must have been paid or fraud committed.

The OP specifically said that VAT was not paid by the original purchaser. There is too little information other than it is in Spain to to be able to say whether VAT should have been paid, and by whom. There are many different ways in which a boat can be used in the EU without VAT being paid.

So, without knowing the exact circumstances of each transaction in its history, one can only speculate.

 

[Monique]

Thank you all.... me think a fraud has been committed. There are other boats... lots of them in fact!