Vat and tax implications of buying in Europe

[undercutter]

Originally Posted by valhalla360

But if you hang out in say Greece for a year, it would have to be under the UK passport as the Kiwi passport is limited to 3 months. If you insist you are a Kiwi, you have overstayed your Schengen visa. If you claim to be under the UK passport, that could trigger the Greeks to claim you as a resident.

Good info on Noonsite as always.

Who Else can Stay for Longer than 90 days?


Nationals of countries with bilateral agreements with specific countries within the Schengen Area which pre-date the Schengen Agreement, are permitted to spend up to 90 days in EACH in each of these countries with no reference to time spent in the rest of the Schengen Area.

Such bilateral agreements exist with:-

Australia (covering Denmark and Germany)

New Zealand (covering Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Iceland, Italy, Luxembourg, The Netherlands, Norway, Poland, Portugal, Spain, Sweden and Switzerland)

It may be worth having some evidence of this ruling as not all Immigration officials are aware of these exceptions.

Greece, Spain and France will give you 09 months total without even starting you Shengen clock and then there are all the rest of the non EU countries in the Med.

Looks like you have all your ducks in a row with that Kiwi Passport and all you have to do is leave the EU area with the boat after 18 months and you can bring it right back in for another 18 months.

[Heg]

Originally Posted by valhalla360

Flaging is a side issue. Though no pun intended is would be a red flag. Let's set that aside.

What is the 18 month rule you are referring to? If it's the VAT temporary import exemption, that assumes you retain your Kiwi residency status and travel under Kiwi passport.

As long as you stay out of the UK, you wouldn't become a UK resident.

But if you hang out in say Greece for a year, it would have to be under the UK passport as the Kiwi passport is limited to 3 months. If you insist you are a Kiwi, you have overstayed your Schengen visa. If you claim to be under the UK passport, that could trigger the Greeks to claim you as a resident.

If you bounce around between EU countries, it would probably make it harder to track but it would be a constant game and no guarantee someone wouldn't catch on.

But we can stay in any one EU country for up to 90 days without triggering any residency issues. That is plenty of time in each place....and places to go in the Med which aren't in the EU....

[Heg]

Thanks Undercutter . Looks like we crossed posts

I discovered Noonsite yesterday. What a fab site :-)

[undercutter]

Portugal and Italy will get you 6 months more. Don't know why I excluded them as they were on the list.

[savagebee]

Originally Posted by Heg

We have researched prices here in AU and it is cheaper for us to buy a new boat in Europe , than it is to buy a second hand boat here.

We do not wish to buy a boat 'new' in Europe and then pay the outrageous charges to have it 'shipped' to Australia. It matters not a jot too us where we start our journey, so shipping to AU is a waste of time and money.

Hi Heg
For what it's worth, I think you should reconsider whether it makes a difference buying and starting from Australia or not. Here are some factors that can make a big difference:-

-The ability to load your personal belongings, tools and toys directly onto the boat in Aus as opposed to the cost of shipping or flying them overseas or purchasing a lot of stuff in Europe.
-Being able to continue working and earning money in Aus whilst you refurbish and make the boat ready.
-Saving on international flights, particularly if you will be flying back and forth to view boats or during any refurbishing work being done.
-At some point in the future if you want to settle back in Aus with the boat you would need to import it into Aus, pay gst etc.

We've been through the same thought process as you and in the end buying here in Aus was the right choice for us.

[kas_1611]

EU citizens, that is persons holding an EU passport or nationals, regardless of physical residence are subject to VAT at source on any purhases or assets brought into the EU.

There is a way to claim relief on personal belongings you import and you can reclaim VAT if you leave the EU within 3 months but this may not be valid in this case if you intend to sail the European Med for 3 years.

Best option is to buy a VAT paid boat and stay in the EU on your British passport as uou won't have visa restrictions and can stay in any EU member state indefinitely

However might all be a moot point after June 23Rd if UK votes to leave the EU at which point we're all wondering what the hell will happen.

Keiron

[Manos1955]

Flag any. Convenient flag like Cayman or BVI sailing in the Med will not be a problem at all .if they ask you for the boat you will present either your UK passport or AU passport As long as you are not a citizen of the Med countries nobody cares

[Manos1955]

Originally Posted by undercutter

Good info on Noonsite as always.

Who Else can Stay for Longer than 90 days?


Nationals of countries with bilateral agreements with specific countries within the Schengen Area which pre-date the Schengen Agreement, are permitted to spend up to 90 days in EACH in each of these countries with no reference to time spent in the rest of the Schengen Area.

Such bilateral agreements exist with:-

Australia (covering Denmark and Germany)

New Zealand (covering Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Iceland, Italy, Luxembourg, The Netherlands, Norway, Poland, Portugal, Spain, Sweden and Switzerland)

It may be worth having some evidence of this ruling as not all Immigration officials are aware of these exceptions.

Greece, Spain and France will give you 09 months total without even starting you Shengen clock and then there are all the rest of the non EU countries in the Med.

Looks like you have all your ducks in a row with that Kiwi Passport and all you have to do is leave the EU area with the boat after 18 months and you can bring it right back in for another 18 months.

If you r sailing East Med all you need is to sail for one day in Turkey and back in Greece You r out of EU so the clock start ticking from the beginning

[poiu]

Originally Posted by kas_1611

EU citizens, that is persons holding an EU passport or nationals, regardless of physical residence are subject to VAT at source on any purhases or assets brought into the EU.

There is a way to claim relief on personal belongings you import and you can reclaim VAT if you leave the EU within 3 months but this may not be valid in this case if you intend to sail the European Med for 3 years.

Keiron

The obligation to pay VAT depends on residence, not citizenship.

There is a good guide on the HMRC website on VAT and boats.

Don't rely on it completely though as HMRC doesn't always understand the tax law fully, just like everyone else, including me.

[alnonline]

Hi to all,

Further to your vat implications regards buying a vessel in Europe, I have recently delivered a Hanns sailing yacht from Germany to Southampton for a uk dealer and the new owner, who is Australian national.

You can by a new boat in Europe without paying the vat if you are intending to eventually import it to your country of choice, which ever country you settle in you will need to check their tax laws to see how long you can stay without being liable for import tax, vat charges.

If you buy your new vessel in Europe your dealer needs to employ a professional skipper to deliver your vessel to a tax free country ( Gurnsey ) before you can officially take delivery and register it either in your own country or a tax free country.

Each country has limitations on how long you can sail in their waters as a foreign registered yacht ie I believe the European countries are 18 months before they will impose a vat charge, you will need to check this

You can take advantage of this buy moving around with your yacht to countries outside of Europe with advantageous tax laws for cruising yachts.

You should know that where ever you settle and plan a more permanent stay with your yacht, this will most likely result in that country claiming its taxes as vat or import taxes.

If you are not planning to buy a new yacht and are considering a slightly used yacht then search some of the tax free countries as vat is likely to be unpaid on these yachts and should be cheaper than their counterparts with tax paid.

You do not want to be in a situation where you pay one countries taxes then end up paying the taxes in the country you plan to stay and remain with your yacht.

Kind regards

Alan

[SaltyMetals]

Heg,

I (UK citizen) bought a new boat free of VAT about 20 yrs ago when i was a resident of Switzerland. I registered the boat on UK flag with Southampton as the port of registry. The only condition was that I had to take the boat out of the UK within max 3 mths so i took her to Guernsey. About 1-2 yrs later i then imported the boat into the UK and paid VAT on the (slightly lower ) market value. So unless the rules have changed what Veg is saying is not correct. Even if you are not UK resident you can register with a UK registration but it has to be the Part 1 Registration with the MCA, NOT THE SSR the latter does in fact require you to be UK resident. (I am now UK resident again and I have just bought another boat which was SSR which i then cancelled and have made a Part 1 registration so i know this from experience).

Second, Greece tried to apply a 3 month limit for visitors and was fining the owners who went beyond 3 mths. They were correctly challenged as being contrary to EU laws and have now accepted the standard 18 month EU limit.

Third, you say you will buy secondhand but if you are buying from a private individual it is likely that the boat is already VAT paid. If it is do not buy it unless you have the documentary proof of VAT being paid when it was bought by the previous owner or from the manufacturers. The difference is 20%. If you are buying from a company (such as charter) then even though the charter company may have paid the 20% VAT they can sell it to you at 20% less without VAT but you will have to export the boat from the EU within max 3 months. Note there are some special rules that existed in Italy where VAT on a boat could have been less than the 20 % (about 5-7% if i remember correctly) but it was a concession for companies that were in the marine business, not for private purchase which is the standard 20%.

The rules for really old boats (pre-1990? or pre 1980??) are different since it was never really clear if VAT had ever been paid on the original purchase price or not. or they were presumed to be VAT-paid even though subsequent owner(s) could never track down the evidence of it being paid in the first place. Best you ask an expert's advice.

[HBrew]

I have looked into this a little and here is what I have found:

1. As a New Zealand passport holder you can buy a boat in (say) France for export as long as you take it out of the EU within 18 months without paying VAT if you are not a resident in the EU. So if you time the delivery for the beginning of the Med season you could get two seasons before leaving - of course you'll have to allow time to shake out the new boat issues.
2. You can register the boat where you like. A good option for a UK passport holder is to register the boat in the BVI - no taxes and you can fly the red duster (maybe you see that as a plus, maybe not) and low annual costs if you have a British passport (no need to setup an offshore company etc)
3. I suggest you hire a marine lawyer to help you make sure you don't fall foul of any technicalities

[boatman61]

I suggested earlier that you do the Med on your UK passport for a trouble free life.. however on reflection I'd suggest you do the whole trip that way as it will mean you don't have to post a Bond for French Polynesia and also not subject to time restrictions like non EU Passport holders.. so you can linger.. one Brit I met has lingered in the Marquesas on his boat for 16yrs.. and no plans for moving on..
The UK (Lloyds Shipping Register) Part 1 Registration is a good idea..

[rik stoney]

What might happen after June if the UK comes out of Europe ?

[rabbi]

The two problem areas are VAT and Schengen.
VAT is due for boats operated by EU residents. Non-residents are eligible for temporary import, up to 18 months (then one day out to reset the clock).
Schengen does not apply to EU passport holders so no visa problems.

The problem is no matter which passport you use you will confuse folks.
Waving your non-eu passport will get you into Schengen trouble. Waving your EU passport will get you into VAT trouble.
to convince customs officers that a UK passport holder does not have a EU residency may be challenging.

Expect lots of interesting discussions with more or less clueless customs officers in Greece, Spain, Italy, ... Some will be too lazy to be bothered and others may want your money.

Much easier if you can find a VAT paid boat and just use the UK passport.