New Schengen Visa Rules from Feb 2020

[Dockhead]

Originally Posted by Rumpi

1. You don't understand Schengen countries. All long stay national visas (meaning without 90/180 rule) are residency visas. There is no "long stay tourist visa".. . .

Neither a long visa nor even a residency permit makes you a resident automatically. In fact it's not even a criterion in determining your residency, which is based on (a) spending a majority of the year in the country; or (b) determination of your "center of interests", considering different factors. For practical purposes, a Yank with house and family ties in the U.S. will be at risk of being considered a resident only if he spends a majority of the year in a given country.


Example: I have both residency permit and work permit in Finland; I even have a Finnish social security number. But I am not a resident, and pay 0% Finnish taxes even on Finnish source income.

[Island Time O25]

Originally Posted by rxcsailnet

My wife and I tried to do this starting in 1999, when we purchased a French farmhouse in Bordeaux (in the grapes). We retired from our US jobs in 2007 and moved to France. I sailed the boat (Jeanneau, US flagged) over in 2008. We both have good US govt government pensions and healthcare that covers us everywhere in the world. We tried to get long-term residency cards in France for 6 years, and eventually gave up. They did not want us.

Every time we went out on the boat, we were stopped by customs, who wanted to check all of our papers. The first boat we met at the sea buoy into Bordeaux was the Douane, and they wanted to know whether we wanted to pay the tax on the boat. The Irish spent 2 days searching for us, once they heard that there was an American boat in the area. The Spanish patrol boat dropped a small boat into the water so that they could board us inside a closed marina in Bilbao. The French used to send out airplanes to surveil us as we rounded FInnisterre, and they sent out a 150 ft patrol boat from Bouglogne-sur-mer, JUST TO CHECK OUR PAPERS, in the middle of la Manche.

We had to file French income tax returns each year, but did not pay anything because all of our income came from the US, and the US-French tax treaty says that Americans with US income only pay taxes on that income in the US. But we had to fight with them each year about this, and remain in our home for 6 weeks while they sorted it out, each time anew.

We just wanted to enjoy life in France (and the EU), and spend money. We did not want anything from any government in the EU other than a piece of paper that would allow us to travel without hassle. But they were determined to make our lives miserable. After being refused boarding to a flight in the US back to France, because the French could not issue a "temporary residency card" to us in 8 months, we gave up, sold the house, and returned to the USA.

And we never paid any VAT or import duty on the boat. It was part of our "household goods" when we moved to France, and therefor exempt from VAT and import duties. Our pickup truck (7 years old, and worth only about $10K), however, got the full treatment, because it was a "truck", and not a personal vehicle. $2200 in tax.

It can be very hard to live somewhere when you don't have the right to do so.

Makes one recall the original reasons why hordes of Europeans went to North America to begin with in the past 400 years.

[valhalla360]

Originally Posted by Dockhead

Neither a long visa nor even a residency permit makes you a resident automatically. In fact it's not even a criterion in determining your residency, which is based on (a) spending a majority of the year in the country; or (b) determination of your "center of interests", considering different factors. For practical purposes, a Yank with house and family ties in the U.S. will be at risk of being considered a resident only if he spends a majority of the year in a given country.

Example: I have both residency permit and work permit in Finland; I even have a Finnish social security number. But I am not a resident, and pay 0% Finnish taxes even on Finnish source income.

Depends on specifics but if you spend 11months of the year bouncing around the schengen (but not 6 months in 1 country) and 1 month in the states...you are likely in a gray area.

If no one asks, you can likely get away with it and assuming you don't cause issues and no one asks.
If an official takes an interest in your status, they could likely claim you are a resident of "a" schengen country...and after that it could be messy with the burden on you to prove you are not.

[slug]

Originally Posted by valhalla360

Depends on specifics but if you spend 11months of the year bouncing around the schengen (but not 6 months in 1 country) and 1 month in the states...you are likely in a gray area.

If no one asks, you can likely get away with it and assuming you don't cause issues and no one asks.
If an official takes an interest in your status, they could likely claim you are a resident of "a" schengen country...and after that it could be messy with the burden on you to prove you are not.

Many people do ...I know a Canadian who has “bounced around” since 1997.

In the past , before computerized Immigration control , it was common .

I don’t think that bouncing around will work anymore

Also consider the refugee crisis in the southern Med. and the huge pressure of illegal immigration in Europe.

[Rumpi]

Originally Posted by Dockhead

Neither a long visa nor even a residency permit makes you a resident automatically. In fact it's not even a criterion in determining your residency, which is based on (a) spending a majority of the year in the country; or (b) determination of your "center of interests", considering different factors. For practical purposes, a Yank with house and family ties in the U.S. will be at risk of being considered a resident only if he spends a majority of the year in a given country.


Example: I have both residency permit and work permit in Finland; I even have a Finnish social security number. But I am not a resident, and pay 0% Finnish taxes even on Finnish source income.

Sorry Dockhead but it's not like that. A visa is usually just a prerequisite, local immigration decides. When you get your residency permit you have established residency in that country. You then have the option of not spending the required time in that country and proving it to the relevant authorities if asked. But, by doing so you invalidate the permit.
A non EU citizen with a EU residency permit does not have FOM he is only allowed to travel inside the EU as long as he is a resident of a specific country. If he invalidates his permit he automaticly reverts to 90/180 rule for Schengen and local requirements for his passport in the other EU countries. But in practice a french official seeing your finnish residency card can not check if you invalidated it or not. Actually even if you prove to the taxmen that you are not a resident, immigration might not know about it. Just like when you present your passport the asumption is you actually reside in that country unless the passport says otherwise.

How you administer your taxes is your business and has nothing to do with this discussion. There are enough loopholes to drive an elephant trough and I suppose you pay a professional to take care of that.

And to those thinking that in the USA everything is simpler I recommend reading some about state taxes for boats. Not to mention that if you are foreign flagged you will have HS on speeddial because you are required to report every move beforehand.

[Dockhead]

Originally Posted by Rumpi

Sorry Dockhead but it's not like that. A visa is usually just a prerequisite, local immigration decides. When you get your residency permit you have established residency in that country. You then have the option of not spending the required time in that country and proving it to the relevant authorities if asked. But, by doing so you invalidate the permit.
A non EU citizen with a EU residency permit does not have FOM he is only allowed to travel inside the EU as long as he is a resident of a specific country. If he invalidates his permit he automaticly reverts to 90/180 rule for Schengen and local requirements for his passport in the other EU countries. But in practice a french official seeing your finnish residency card can not check if you invalidated it or not. Actually even if you prove to the taxmen that you are not a resident, immigration might not know about it. Just like when you present your passport the asumption is you actually reside in that country unless the passport says otherwise.

How you administer your taxes is your business and has nothing to do with this discussion. There are enough loopholes to drive an elephant trough and I suppose you pay a professional to take care of that.

And to those thinking that in the USA everything is simpler I recommend reading some about state taxes for boats. Not to mention that if you are foreign flagged you will have HS on speeddial because you are required to report every move beforehand.

Well, I'm sorry, but this is simply incorrect, and your whole post is a mess of incorrect information. Speaking as a lawyer, I can tell you that PERMISSION for residency does not equal residency itself.



It is also incorrect that having passport from x country creates a presumption that you are a resident there. There is no such legal presumption; residency and citizenship are separate questions.


Next, it is incorrect that having a residence permit but not residing in that country is any kind of violation of anything. It is specifically allowed for cases like mine -- where I am employed by a Finnish company, need unlimited access to being in Finland, but nevertheless will not be resident there. That's not a loophole; it's a fairly common case and there is explicit guidance from the Finnish immigration authorities on that. I even have a special card attesting to this status.


The last piece of incorrect information is that you "revert" to 90/180 if you "violate" your residence permit. As stated, the residence permit gives you unlimited access to the country which issued the residence permit, whether or not you actually reside there. For all other Schengen countries, the holder of a Schengen residence permit is limited to 90/180 IN THOSE OTHER COUNTRIES, in any case -- not counting the country of your residence permit. However, due to open borders, there is no mechanism for checking and no enforcement of this. A Schengen residence permit holder is treated basically as a European citizen and is waved through all Schengen border controls. Flagrant abuse of this, however, like taking up habitual residence in a different country than the country which issued your residence permit, might get you in trouble despite open borders, but for the ordinary traveller the residence permit is a golden card.

[Rumpi]

Originally Posted by Dockhead

Next, it is incorrect that having a residence permit but not residing in that country is any kind of violation of anything. It is specifically allowed for cases like mine -- where I am employed by a Finnish company, need unlimited access to being in Finland, but nevertheless will not be resident there. That's not a loophole; it's a fairly common case and there is explicit guidance from the Finnish immigration authorities on that. I even have a special card attesting to this status.

I wish you (and others) would stop using your own particular cases and declaring them rule. You do not have a "residency permit" you have a non-resident work permit. Yes it is pretty common and the official language varies, sometimes it is called a permit, sometimes a visa, etc. But the important thing is you are not a finnish resident.

What hss that to do with the question here about how to freely roam the EU without paying VAT on the boat?

[boom23]

Originally Posted by Dockhead

Not just skippers -- if the boat is being used in any way by EU residents. See the RYA advice on this, which is quite comprehensive.

Dockhead,

So, no EU resident can be on board a no-VAT-paid foreign registered boat while in EU waters?

What is your understanding on this?

[Dockhead]

Originally Posted by Rumpi

I wish you (and others) would stop using your own particular cases and declaring them rule. You do not have a "residency permit" you have a non-resident work permit. Yes it is pretty common and the official language varies, sometimes it is called a permit, sometimes a visa, etc. But the important thing is you are not a finnish resident.

What hss that to do with the question here about how to freely roam the EU without paying VAT on the boat?

Where do you get all this stuff? You make it up, that's where. There is no such thing as a "non-residency permit" .


I have posted correct information based on years of experience, actual legal expertise, and extensive work with authorities. We have more than 200 employees and numerous expat employees and deal with these questions on a daily basis.


This question is relevant to the OP because contrary to erroneous informatio posted, having a resident permit by itself does not necessarily make you liable to pay VAT on a boat you are using because it does not by itself create residency. The legal definition of residence is different, and having a residence permit is not even one of the criteria on the primary list. So getting a residence permit is one possible solution to the OP's problem, if he has any basis for it (they are not that easy to get).



Residence permit is a solution which will work pretty well, but one should be careful not to abuse the open borders. Although there are no internal border controls, if you abuse this by spending little time in the country which gave you the permit, and spend an excessive amount of time in some other country, this may come to the attention of the authorities in other ways. According to the letter of the law, the residence permit gives you the right to unlimited time in the country which issued the permit, and 90 out of any given 180 days in the rest of the Schengen countries. So this is no good for someone on a long cruise all around Europe, without a fixed base.

[Dockhead]

Originally Posted by valhalla360

Depends on specifics but if you spend 11months of the year bouncing around the schengen (but not 6 months in 1 country) and 1 month in the states...you are likely in a gray area.

If no one asks, you can likely get away with it and assuming you don't cause issues and no one asks.
If an official takes an interest in your status, they could likely claim you are a resident of "a" schengen country...and after that it could be messy with the burden on you to prove you are not.

Legally speaking, there is no gray area. A residence permit in one Schengen country does not give you any rights in the other Schengen countries. If you get checked and it's clear that you were only one month in the country which issued your permit and 10 months "bouncing around" in other Schengen countries, you're in trouble.



I think such a check is unlikely, but I wouldn't advise doing it that way. You should have some good-faith relationship to the country issuing the permit; this scheme is only really good if you have a fixed base there and really do spend most of your time there. If you go over a few days on the 90/180 no one is going to care, but gross abuse may well get you caught.


Speaking of actual practice, there are very few cases of non-Europeans being out of compliance with 90/180 getting in trouble, at least those from first world countries. Switzerland was running strict checks on transit passengers a few years ago for a while, but that seems to have been an isolated campaign. Some cruisers on here have reported just ignoring it for years and never having problems. Neverthless, I recommend obeying the law.

[Dockhead]

Originally Posted by slug

Yes...that is what I understand

One problem is the there is no country called Schengen

The 180 day rule, resident , implies that you will stay in one country

After 180 days You will become a resident of Spain, or Malta or...

Boats move, Schengen is large , you may never be in one country for 180 days

I have never recieved an answer for this scenario

I can tell you for sure that it applies per country. You are most definitely not tax resident in any Schengen country even if you spend 12 months in Schengen, if you didn't spend more than 180 days in any one of them, and didn't acquire residency by other means (center of economic interests etc.).



It is pretty easy to be a resident of no country, and there are plenty of people who wander the globe and pay taxes nowhere (Google "digital nomad"). Just not U.S. citizens, because we pay tax on our worldwide income regardless of our residency status.

[Dockhead]

Originally Posted by boom23

Dockhead,

So, no EU resident can be on board a no-VAT-paid foreign registered boat while in EU waters?

What is your understanding on this?

I don't know. The rules says "used by", and it depends on how they interpret that.



My guess is that occasional EU resident guests is probably OK provided you the non-resident are always in charge of the boat, but don't rely on my guess. You can get a consultation from the RYA legal office if you're a member (which is highly recommended in any case).

[boom23]

Originally Posted by Dockhead

I don't know. The rules says "used by", and it depends on how they interpret that.



My guess is that occasional EU resident guests is probably OK provided you the non-resident are always in charge of the boat, but don't rely on my guess. You can get a consultation from the RYA legal office if you're a member (which is highly recommended in any case).

Thank you.

I'll contact them.

[valhalla360]

Originally Posted by Dockhead

Legally speaking, there is no gray area. A residence permit in one Schengen country does not give you any rights in the other Schengen countries. If you get checked and it's clear that you were only one month in the country which issued your permit and 10 months "bouncing around" in other Schengen countries, you're in trouble.

So my point is correct. The OPs idea was to get a long stay visa and bounce around in the Schengen for the bulk of the year and then claim they are USA residents.
- Of course if they stay 6 months in 1 country, they are subject to residency
- But if they spend the vast majority of the year in the Schengen while on a long stay visa from one country, they could certainly be questioned on their residency status.

As far as being caught...I think that's a moving target. It used to be technologically difficult to do (or at least enough hassle they weren't likely to bother). But now, you may see systems start to track it.

I know at least some countries do require you to check in periodically. Are you going to lie about where you have been? Even if you get up to 5-6 months outside of the visa country, they might take issue with it.

[Dockhead]

Originally Posted by valhalla360

So my point is correct. The OPs idea was to get a long stay visa and bounce around in the Schengen for the bulk of the year and then claim they are USA residents.
- Of course if they stay 6 months in 1 country, they are subject to residency
- But if they spend the vast majority of the year in the Schengen while on a long stay visa from one country, they could certainly be questioned on their residency status.

As far as being caught...I think that's a moving target. It used to be technologically difficult to do (or at least enough hassle they weren't likely to bother). But now, you may see systems start to track it.

I know at least some countries do require you to check in periodically. Are you going to lie about where you have been? Even if you get up to 5-6 months outside of the visa country, they might take issue with it.

I think if you maintain a base in the country that gives you the permit, spend most of your time there but less than 180 days, then you're probably in pretty good shape. You would then only have to spend 91 days or whatever outside of Schengen to be completely legal to the letter of the law and if you miss that by a month I really don't think anyone will care (but make your own judgement).



For just "bouncing around", then I agree with you -- this is not a good solution.


There is some fine print and some gotchas so everyone should study for himself. Two big ones to check out are the bilateral agreements, and the Nordic Passport Union.