VAT

[dina]

We are buying a non VAT paid boat in Turkey, and will be importing it into the EU, and eventually back to the Uk. Does anyone have any info on where is the cheapest place to pay the VAT(i.e. lowest vat rate and most flexible on valuation)? Someone has said Portugal is good, if so do we have to go straight there?

 

[longjohnsilver]

Why don't you contact the RYA, they must know the answer.

 

[steve_cronin]

There is an RYA publication

about buying & selling new & used boats. It gives comparative rates of VAT.* It is 18% in Greece for example unless it is registered in the name of a Greek at offered for charter (aids the tourist industry)

Steve Cronin

* may be downloadable

 

[Seafort]

How long is eventually?

The Times suggested Cyprus as a potential member of the EEC and if you were to be registered there at the time, VAT wouldn't pose a problem. (No idea what this would involve though).

 

[AndrewB]

Re: VAT, also the RCD - sources of info..

AAssuming you are an EC resident, you will almost certainly be obliged to pay VAT at your first port of entry into the EC. (See the UK VAT rules at http://www.hmce.gov.uk/notices/8.htm).

Where to enter and pay is a toss-up between the rate of VAT, which varies between country, and the valuation local customs officials put on the boat, which may or may not bear any relation to the price you paid. It was said at one time that Portugal made low valuations, but this is strictly gossip, as you don't get a chance to shop around.

You do know about the Recreational Craft Directive, don't you, which you will also have to satisfy, a problem if your boat wasn't originally built in the EC.

The RYA are definitely the place to go for information and help. First take a look at their FAQ on boats bought in Turkey etc at http://www.rya.org.uk/cruising/faq_3.html#Heading5

 

[jamesjermain]

Portugal has the cheapest rate of VAT at 12 per cent. There officials are reasonably flexible on valuations but, if the boat has recently changed hands they will want to see the Bill of Sale and/or receipt. The valuation will be based on this but if they think it is a 'massaged' sale price they have the right to insist on an independent valuation at your expense.

To take advantage of Portugese VAT you must sail there directly and make no other landfall on the way - this may not only be frustrating but also potentially dangerous if you are caught out in a gale.

Greek VAT is 17.5 per cent, I think, and would be the easiest place to go to register.

Is the boat CE marked in conformity with the RCD directive? If it is not, then forget it. The cost and trouble of getting the boat certificated will not be worth it. However, if the boat was built in trhe EEA (European Economic Area, not quite the same as the EU or EC), before 1998, it may be exempt. I would check on any paperwork you will need to prove this before buying and importing the boat.
Web sites: www.rya.org.uk and www.hmce.gov.uk (then search the site for 'yachts').


JJ

 

[Guest]

Re: getting to portugal

Can't you you can get to Portugal via non-EU countries, including Cyprus, Malta, Tunisia, Morocco?

 

[chrisc]

Re: getting to portugal

it is easier to move the boat to portugal and then do the transaction.
why not hire it from the present owner until you arrive in Portugal ?

 

[lezgar]

I am not sure about Portugal but in Spain you have to have painted number plates in your boat and to pay a tax every year.

 

[AndrewB]

You aren\'t quite right about the RCD.

To quote from DTI guidance (see http://www.cruising.org.uk/rcd.htm):

Boats that will not need to comply with the Directive include:-
- Boats completed or put into service in the EEA prior to 16 June 1998.
- Boats built in the EEA prior to 16 June 1998 even if exported and subsequently re-imported after 16 June 1998.
- Boats built for own use provided they are not subsequently placed on the EEA market during a period of five years.
- Canoes kayaks, gondolas, pedalos, sailing surfboards, powered surfboards and personal watercraft.
- Boats designed before 1950, built predominantly of the original materials and labelled as such by the manufacturer, his agent or the importer.
- Boats entering the EEA for reasons of tourism or one in transit.

It is very likely that a yacht bought secondhand in Turkey will have been built in the EEA prior to June 1998, in which case PROVIDED THIS CAN BE PROVED, it will not fall foul of the RCD on importation. But of course if it was built in Turkey or elsewhere, there will be a problem.

 

[jamesjermain]

I was just keeping it short for clarity(?)nm

.

JJ

 

[Neal]

I have done a lot of research recently into VAT on 2nd hand yachts, for personal reasons.

In order of usefulness, I found the following to be the best sources of advice:

- 1 - the local VAT helpline. You will find their number in your local yellow pages.
- 2 - the BMIF, who will send you their excellent VAT leaflet, and can offer pretty informed advice on the phone.
- 3 - the Directorate of VAT and other turnover taxes at the EU Commission in Brussels.

Personally, I failed to find anyone with any depth of specialist knowledge on this topic at the RYA.

I was told that VAT is not payable until a yacht has been in a member state for 6 months. If this is correct, you cannot just arrive in, say, Italy and pay VAT there, unless you will be there for that period. You may therefore need to investigate the procedure for goods in transit, which defers payment until you return to the UK. The starting point for valuation is then based on purchase price, as evidenced by the Bill of Sale.

Hope this is helpful.

 

[jamesjermain]

Non-EU citizens only

The six month 'temporary importation dispensation (now 18 months, incidentally) only applies to citizens of non-EU states, as I understand it. If you, as an EU citizen, brings a non VAT-paid boat in to the EU you must pay straight away.

HMC&E publish a booklet, VAT Guide for YAchts.

JJ

 

[Neal]

James, I refer to the EU T1 transit procedures,

which do relate to EU Citizens, and have nothing to do with the 'temporary importation dispensation'.

My sources of information are: 1) my local VAT helpine 2) the HMCE national helpline in London 3) the personal transport unit at HMCE Dover. In the last 11 months, I've also read as many VAT books and leaflets from as many sources as I could find.

One of the difficulties is getting informed opinion - ask one so-called expert and you'll get one answer, ask another and the advice can be very different. It can be a real mess.

Therefore, it is imperative to do lots of in depth research yourself, so that you know what questions to ask, and if answers aren't consistent you must follow them up the hierachy.

If the T1 system is used, it will ultimately be the Customs at the UK port of arrival who will give a decision on VAT status and liability. It is logical, therefore, to obtain their views in writing before the purchase is finalised. My own experience was that they were extremely open and helpful.

My strongest possible advice with such a complex and specialist issue, however, is not to rely on advice from a bulletin board, however sincere the adviser!

 

[dina]

Re: You aren\'t quite right about the RCD.

The boat in question was built in Sweden in 1989. We do not yet know where it was originally delivered, could have been Turkey (is this relevant?) but it certainly spent time in the Western med in the mid 1990's. Was Sweden in the EEA?? Are we exempt?? Thanks for all your help.

 

[dina]

Re: getting to portugal

Good thinking

 

[dina]

Are you sure VAT in mainland Portugal is only 12%? Iknow the Azores and Madeira benefit from this reduced rate but Portugalhas a headline rate of 17%. Perhaps this lower rate is specifically for the importation of Yachts?
As far as RCD is concerned the boat was built in Sweden in 1989, does this make it exempt. Thanks for your advice.

 

[harvey]

VAT is only 10% in the Azores and it takes about 10 days to clear through there. I brought a boat back from the States a year or so ago and it was clearly a well worn path without any difficulties. Unfortunately I didn't know about it and didn't have the time to wait 10 days! The assessment of value is benevolent too.

 

[AndrewB]

Sweden.

Sweden joined the EEA in May 1992. This is outside my own experience, but the RCD exemption should apply to yachts built in present EEA states at any time before June 1998 - at least there is nothing in the rules to suggest otherwise.

I don't think Neal is right about the VAT rules - I have seen a UK owned boat held in Portugal because the owners could not prove the VAT status, and arguments about it being in transit were not accepted. UK customs will (or did) allow a period of grace before a yacht bought VAT-free is sailed away, but that is different.

Nevertheless I am sure he is quite right that what will matter in practice is the interpretation that local customs officials place on the rules. Under the circumstances, you would be well advised to make enquiries at your proposed destination.

 

[jamesjermain]

Thanks Neal, I\'ll follow it up. nm

.

JJ