Warning, think you are VAT paid in the EU? ... Think again - both Slovenien and Croatian port authorities refuse to recognise VAT paid status of boat.

[Buck Turgidson]

At the time the boat was registered, I was living in Germany on a UK passport. I chose to register the boat in the UK so it would match my passport and when checked there would be no discrepancy between my nationality and the flag state of the boat. All perfectly reasonable IMO.

part 1?

 

[Stemar]

Is there somewhere more sensible that the transaction could take place? I hate to call Italy's administration sensible, but...

 

[Chris_Robb]

Except he's chosen to register it as a foreign ship.

Leave the troll to himself, your feeding him. Its clear he knows nothing about anything

 

[Wing Mark]

That is completely irrelevant from a VAT point of view - as is the citizenship and residence of the owner. VAT is a tax on transactions and all that EU law requires is that there is evidence that VAT was paid to allow free movement around the EU, including being able to sell it anywhere in the EU without VAT being paid on the transaction.

The problem is that the Croatian authorities are either ignorant of the law or have deliberate policy of ignoring it. Hence the advice to take it to the Commission through a complaint. May be a bit tedious and cost, but as the action by the CA in Greece shows it works.

VAT is actually a tax on Value Added. Clue is in the name.

VAT is never as simple as what any bloke on the internet can tell you.
The rules rules cover a fair bit of book shelf and are hedged with exceptions and complications.
Whether VAT was paid in the first place is very often of little consequence.

Can a part 1 registered British Ship be 'freely circulating 'Union Goods'?

 

[Chris_Robb]

Can a part 1 registered British Ship be 'freely circulating 'Union Goods'?

Of course it can. Vat has no relationship with flag or nationality - its about the state of the Goods. Once Vat paid - alays vat paid until it leave the EU - but may gerain Vat under RGR. RGR is claimed by the act of crossing the boundary to the EU.... Tell that to the Greeks>!!!

 

[Baggywrinkle]

part 1?

Yes, Part 1

 

[Chris_Robb]

Baggy - this is the web site to look at for the EU Complaints

Complaint Form for breach of EU law – European Commission

It takes time though.

I have asked a colleague in the CA who sorted an issue earlier this year. Lts see if he has a contact.

Otherwise I would advise making contact with the British Embassy/Consulate in Croatia, and talk to the Trade desk who may have someone dedicated to Brexit issues as does Greece.

The are of course totally wrong...

 

[Baggywrinkle]

VAT is actually a tax on Value Added. Clue is in the name.

VAT is never as simple as what any bloke on the internet can tell you.
The rules rules cover a fair bit of book shelf and are hedged with exceptions and complications.
Whether VAT was paid in the first place is very often of little consequence.

Can a part 1 registered British Ship be 'freely circulating 'Union Goods'?

Yes, it can and it was under my ownership.

The Croatian and Slovenian authorities want to remove the EU goods status from the next owner even though the boat is currently in the EU as EU goods and has never left.

The only reason they give for removing its EU goods status is that when I remove it from the UK ships registry so the new owner can register it in Slovenia the fact that it was registered outside the EU will trigger a new import procedure including VAT and customs duties. This is categorically not what the EU web site says should happen.

 

[Tranona]

VAT is actually a tax on Value Added. Clue is in the name.

VAT is never as simple as what any bloke on the internet can tell you.
The rules rules cover a fair bit of book shelf and are hedged with exceptions and complications.
Whether VAT was paid in the first place is very often of little consequence.

Can a part 1 registered British Ship be 'freely circulating 'Union Goods'?

I know about VAT, but your observations are simply not relevant in this situation. Why are you trying to make it sound more complicated than it is. That is not to say that other situations with VAT are not complicated - but this is clear cut. The Croatian officials are not applying EU law correctly.

 

[Baggywrinkle]

Baggy - this is the web site to look at for the EU Complaints

Complaint Form for breach of EU law – European Commission

It takes time though.

I have asked a colleague in the CA who sorted an issue earlier this year. Lts see if he has a contact.

Otherwise I would advise making contact with the British Embassy/Consulate in Croatia, and talk to the Trade desk who may have someone dedicated to Brexit issues as does Greece.

The are of course totally wrong...

Thanks for that, I've written to some lawyers in Slovenia mentioned on the EU complaints web site, the RYA legal team, and the next step is a complaint to the EU. Thanks for the link. Will see what happens.

Plan B will be to register it in Germany before I sell it - apparently that will make the problem go away. Go figure.

 

[Tranona]

Plan B seems a better bet than fighting with EU and Croatian authorities.

 

[Baggywrinkle]

Plan B seems a better bet than fighting with EU and Croatian authorities.

Just talked to the German Ships register, pretty straightforward and no VAT implications at all. Problem solved for me anyway.

Still going ahead with complaint to the EU commission though as this needs to be overturned for all UK VAT paid boats in Croatia and Slovenia.

 

[doug748]

.........Still going ahead with complaint to the EU commission though as this needs to be overturned for all UK VAT paid boats in Croatia and Slovenia.

Commendable attitude, good for you.

.

 

[Three Stars]

I've just been made aware of this thread through a colleague at the CA. As Tranona said at the beginning of the thread, the country of registration of a yacht is quite a different matter to whether it is regarded as VAT paid and I would need to be convinced that changing the country of registration to one that is a current member of the EU will be of any help. In addition, there would be costs involved, particularly if any kind of survey is required. There have been other post-Brexit issues in Croatia due to misunderstandings about the terms of the Withdrawal Agreement. However, the authorities were persuaded without too much difficulty to accept they had got it wrong. Since your boat was VAT paid within the EU and it was physically present in the EU on Dec 31st 2020 there is no doubt that it must be regarded as VAT paid and can be sold within the EU without further payment of VAT, or to agents, or anyone else. I'm pleased to hear that you intend to pursue the case because this matter does need to be sorted out. Provided you have the support of your purchaser and they understand that what you are doing will be of benefit to all in a similar position, and both are prepared to accept some delay in finalising the transaction, I would stick with that and do more research about the issues associated with re-registration.

Incidentally, Croatia and Slovenia are not the only countries trying to muddle through the post-Brexit situation. It's much worse in Greece and I'm aware of problems being reported in Spain, Portugal, and France.

 

[[3889]]

I sold a UK registered boat in France in July and got grief over VAT. My impression was that les douanes, possibly through not understanding / caring about the rules, take a punt on levying tax. When I threatened to cancel the sale my broker became animated and the matter was resolved pronto.

 

[Baggywrinkle]

I've just been made aware of this thread through a colleague at the CA. As Tranona said at the beginning of the thread, the country of registration of a yacht is quite a different matter to whether it is regarded as VAT paid and I would need to be convinced that changing the country of registration to one that is a current member of the EU will be of any help. In addition, there would be costs involved, particularly if any kind of survey is required. There have been other post-Brexit issues in Croatia due to misunderstandings about the terms of the Withdrawal Agreement. However, the authorities were persuaded without too much difficulty to accept they had got it wrong. Since your boat was VAT paid within the EU and it was physically present in the EU on Dec 31st 2020 there is no doubt that it must be regarded as VAT paid and can be sold within the EU without further payment of VAT, or to agents, or anyone else. I'm pleased to hear that you intend to pursue the case because this matter does need to be sorted out. Provided you have the support of your purchaser and they understand that what you are doing will be of benefit to all in a similar position, and both are prepared to accept some delay in finalising the transaction, I would stick with that and do more research about the issues associated with re-registration.

Incidentally, Croatia and Slovenia are not the only countries trying to muddle through the post-Brexit situation. It's much worse in Greece and I'm aware of problems being reported in Spain, Portugal, and France.

It's just a mess. The customs officers from the port authorities believe that the UK registration means it could be either a UK VAT paid boat, or a UK non-VAT paid boat kept in the UK under TA by a German EU resident. In both cases the boat can't be brought to Croatia or Slovenia without paying VAT and import duties.

After 01.01.2021 it is impossible for an EU resident to buy a boat in the UK (VAT paid or not) and move it to the EU without paying VAT and import duties in the EU. This is the situation the customs officials believe my buyer is in and he has asked for a reduction in price to cover the VAT due.

The finer points of it being EU goods currently in free circulation, physically present in Croatia for the last decade, and having a current owner who is also an EU resident and citizen seems to be lost on them.

The German equivalent of the SSR, the IBS ,costs €27, can be applied for online, and will satisfy the Croatians and Sloveniens that it is an "EU flagged boat owned by an EU resident". I have been assured by all parties that this will make the problem go away. Ridiculous I know, but when the problem first came up I was expecting far more grief and expense to solve it. I can live with €27 to get the boat sold.

Had a phone call today with the RYA and they were very helpful, took all the details as this is a watertight case with complete documentation - and they will be using it as an example in EBI (European Boating Industry) discussions tomorrow (Friday). So at least it will get some escalation. The RYA legal department are very interested and if the German registration wheeze doesn't work they will have a look at the case - and finaly, I'm waiting for a reply from a firm of Slovenien EU Tax lawyers to see if they want to have a go at the Slovenien Port Authority.

The broker will be supplying me with the contact details of the two Port Authorities in Slovenia and Croatia and I will be submitting an official complaint to the EU commission in the next few days - but this may well take a long time to get any response or action.

See what comes of it all.

In the meantime, here is the official EU document on how it should work ....

https://ec.europa.eu/taxation_customs/system/files/2021-07/Note on means of transport.pdf

Unfortunately, UK based boats are off my shopping list as replacements for my beloved AWB - no matter what, I would have to pay VAT and customs duties if I bought one and there are not many that are for sale in the UK VAT unpaid - especially in the "one loving private owner with very deep pockets" category - it's just too much hassle.

Will keep posting here until the issue is resolved.

 

[grumpy_o_g]

Yes but in the past HMRC were in the EU and applying EU laws. Now it’s literally none of their business.

EU regulations and, indirectly, EU directives heavily impact and are very much the business of HMRC, just as UK and any other country's laws are the business of EU and especially of the member states. How on Earth do you think the import and export business works? That's why we have import and export agencies in just about every country as well lawyers that specialise in export and import law and tax experts that specialise in the law relating to the transfer of assets between countries? Good grief, there's an entire industry in every half-decent sized country dedicated to understanding and dealing with the laws of other countries.

 

[Tranona]

EU regulations and, indirectly, EU directives heavily impact and are very much the business of HMRC, just as UK and any other country's laws are the business of EU and especially of the member states. How on Earth do you think the import and export business works? That's why we have import and export agencies in just about every country as well lawyers that specialise in export and import law and tax experts that specialise in the law relating to the transfer of assets between countries? Good grief, there's an entire industry in every half-decent sized country dedicated to understanding and dealing with the laws of other countries.

That may very well be true for trade between the UK and the EU but if you bothered to read this thread it is totally irrelevant as other than the owner being a UK citizen there is no connection between the boat and the UK Everything has taken place in Croatia so it is purely an issue of Croatia not applying EU law correctly.

 

[grumpy_o_g]

That may very well be true for trade between the UK and the EU but if you bothered to read this thread it is totally irrelevant as other than the owner being a UK citizen there is no connection between the boat and the UK Everything has taken place in Croatia so it is purely an issue of Croatia not applying EU law correctly.

I have read the thread in it's entirety and the particular post that I responded to and can only conclude your response is something of a non-sequitur. The boat is flagged in the UK, the VAT was paid (in the UK??), the EU (via it's directives) is involved as is Croatia, in the form of the Croatian Port Authorities (via their interpretation of the directives) so, whilst "everything" may have taken place in Croatia in the most recent events affecting Baggywrinkle, there is clear involvement of the EU, UK and Croatia. Add in the fact that I am responding to a post that suggested that HMRC no longer has anything to do with EU law (despite the fact that whole post is about the interpretation of EU directives as they apply to UK taxes and your response is not exactly logical.

 

[Baggywrinkle]

I have read the thread in it's entirety and the particular post that I responded to and can only conclude your response is something of a non-sequitur. The boat is flagged in the UK, the VAT was paid (in the UK??), the EU (via it's directives) is involved as is Croatia, in the form of the Croatian Port Authorities (via their interpretation of the directives) so, whilst "everything" may have taken place in Croatia in the most recent events affecting Baggywrinkle, there is clear involvement of the EU, UK and Croatia. Add in the fact that I am responding to a post that suggested that HMRC no longer has anything to do with EU law (despite the fact that whole post is about the interpretation of EU directives as they apply to UK taxes and your response is not exactly logical.

Just for clarification, since I bought the boat, it has always been in Croatia, it has always been UK flagged, Iam a UK citizen and I have always lived in Germany.

It was VAT unpaid under TA in Croatia until Croatia joined the EU in 2013, then the import formalities were performed in Croatia and it became EU goods with free circulation, effectively VAT paid with supporting documentation, including EU reference to look up the electronic copy by all EU customs authorities.

This was done in Pula, the same port who are now refusing to recognise their import documentation from 2013 because of the B word and my UK flag.

It's nonsense.