Poland Flag - Non-eu resident , VAT ?

[MatteaManassah]

If you are an American citizen, you buy a boat in Germany, you register it in Poland, then you have to get it insured. How would an American citizen get insurance for a boat in Germany, liability only? This is all confusing as heck. And all this talk about VAT, how much is it and who cares about it? If you're sailing around who asks for VAT paperwork? The marinas in other countries? ?

[goboatingnow]

Originally Posted by MatteaManassah

If you are an American citizen, you buy a boat in Germany, you register it in Poland, then you have to get it insured. How would an American citizen get insurance for a boat in Germany, liability only? This is all confusing as heck. And all this talk about VAT, how much is it and who cares about it? If you're sailing around who asks for VAT paperwork? The marinas in other countries? ?

Vat inspections occur occasionally from time in European ports.

[SChris]

Originally Posted by MatteaManassah

If you are an American citizen, you buy a boat in Germany, you register it in Poland, then you have to get it insured. How would an American citizen get insurance for a boat in Germany, liability only? This is all confusing as heck. And all this talk about VAT, how much is it and who cares about it? If you're sailing around who asks for VAT paperwork? The marinas in other countries? ?

You are touching 4 different subjects that are not necessarily directly related.

1. Your nationality will dictate if you need a visa or not or how long you can visit or work in a country irrespective of having a boat or not.

2. If the boat you are planning to buy is not VAT paid, you will have to pay the VAT in the country you are buying it. If you have an EU VAT registered company you can buy the boat under the company and not pay the VAT.

3.You can choose the flag to register your yacht provided that the owner and the yacht meet the criteria required by the flag country. Polish flag does not have any nationality restrictions.

4. Insurance: You can get an insurance quote that will be specific to your vessel, your qualifications and the waters you are intending to sail. The flag you will choose may have a small impact on the insurance fees.

[goboatingnow]

Wrapping a boat up in a company and then using that boat yourself exposes you to benefit in kind payments , vat “ self supply “ issues and corporate governance issues. It can work out way more expensive then the vat.

Don’t listen to this type of advice until you appreciate the implications.

Again. The nationality of the buyer has very little to do with it. If you are resident in the EU vAT is payable , insurance is simple and widely available.

If you residency is outside the EU then you can avail of the 18 months vat excemption processes, registration under EU flag is more restrictive and insurance will usually be handled by your residency state

[goboatingnow]

To summarise three things matter

Residency of the buyer
Intended flag of the boat
Intended home country of the boat.

This is al that matters in determining the conditions applying.

[CNulli]

Exactly. In my case I was a resident of Germany, now Netherlands, so was able to get insurance based in EU provided I have an EU flag. Since I keep the boat here, it makes sense to insure and flag the vessel here in EU. When I go back to the US I will reconsider the flag and insurance.

Originally Posted by goboatingnow

To summarise three things matter

Residency of the buyer
Intended flag of the boat
Intended home country of the boat.

This is al that matters in determining the conditions applying.

[SChris]

Originally Posted by goboatingnow

Wrapping a boat up in a company and then using that boat yourself exposes you to benefit in kind payments , vat “ self supply “ issues and corporate governance issues. It can work out way more expensive then the vat.

Don’t listen to this type of advice until you appreciate the implications.

I mentioned " If you have an EU VAT registered company you can buy the boat under the company and not pay the VAT."

So if you already have the company there are little to no additional expenses. I did this few years back, utilized specific legislations available at that time that allowed me to pay only half of VAT in installments over a period of 2 years (based on a leasing program).

VAT % varies form one country to another in EU (18%-24%). Some EU countries still offer VAT reductions based on leasing programs.

On a €‎100K yacht VAT can be €‎18,000/€‎24,000 so i believe it's worth looking into the alternatives available...

[goboatingnow]

Originally Posted by SChris

I mentioned " If you have an EU VAT registered company you can buy the boat under the company and not pay the VAT."



So if you already have the company there are little to no additional expenses. I did this few years back, utilized specific legislations available at that time that allowed me to pay only half of VAT in installments over a period of 2 years (based on a leasing program).



VAT % varies form one country to another in EU (18%-24%). Some EU countries still offer VAT reductions based on leasing programs.



On a €‎100K yacht VAT can be €‎18,000/€‎24,000 so i believe it's worth looking into the alternatives available...

As I said many European companies have specific legislation about the use by privates of company assets. ( benefit in kind ) Also EU vat law does not allow it. ( look up vat “ self supply”) .

Hence unless you wish either to flout company law or just ignore Liabilities , don’t go down this route without understanding all the legal implications.

Leasing can be very problematic wrapped up in a company as at the end of the period , extracting the asset can attract personal income tax issues (capital gains tax etc ) there are also implications for the company balance sheet

Winding up such companies can then be very complicated.

I have legitimately had boats in companies. It’s much more complicated thenIt seems if you want to remain legal and tax compliant

Way too many people flout company law without realising it.

[SChris]

Originally Posted by goboatingnow

As I said many European companies have specific legislation about the use by privates of company assets. ( benefit in kind ) Also EU vat law does not allow it. ( look up vat “ self supply”) .

Hence unless you wish either to flout company law or just ignore Liabilities , don’t go down this route without understanding all the legal implications.

Leasing can be very problematic wrapped up in a company as at the end of the period , extracting the asset can attract personal income tax issues (capital gains tax etc ) there are also implications for the company balance sheet

Winding up such companies can then be very complicated.

I have legitimately had boats in companies. It’s much more complicated thenIt seems if you want to remain legal and tax compliant

Way too many people flout company law without realising it.

knowledge is power. Legitimate process, some complexity, significant savings. I did it without flouting the law but I do not have to convince you or anyone else to to do it... :-) Just stating the facts. Everyone can do his own research, don't take my word for it. Enjoy sailing :-)

[goboatingnow]

Originally Posted by SChris

knowledge is power. Legitimate process, some complexity, significant savings. I did it without flouting the law but I do not have to convince you or anyone else to to do it... :-) Just stating the facts. Everyone can do his own research, don't take my word for it. Enjoy sailing :-)

For example
Under EU vat law applicable in every EU country VAT may be only reclaimed for purchases used for the business. It’s illegal to reclaim vat for other purposes

Clearly if you then sail around the Med for your personal pleasure you have just committed vat fraud.

Secondly many European countries have income tax clawbacks for the private use of a companies assets.
Now you have added income tax fraud to the list

Even the French lease scheme ( and the Malta ) fell foul of EU vat law and France had to discontinue it in the face of EU sanctions. ( it was classed as illegal state aid)

If I had tuppence over the years from people trying to convince me that what there were doing was legitimate when it clearly wasn’t, I’d be a millionaire

The same people “ pushing their luck “ are currently flouting the 18 month TIP vat rules to the point where EU residences with foreign non eu passports are claiming tip

The result is the EU is looking at a major clampdown and changing the tip rules resulting in more and more hassle for legitimate tip users

The greek transit log tip process is being watched with interest though some countries see too much admin in adopting it.

The “tragedy of the commons “ endlessly repeats.

[SChris]

Originally Posted by goboatingnow

For example
Under EU vat law applicable in every EU country VAT may be only reclaimed for purchases used for the business. It’s illegal to reclaim vat for other purposes

Clearly if you then sail around the Med for your personal pleasure you have just committed vat fraud.

Secondly many European countries have income tax clawbacks for the private use of a companies assets.
Now you have added income tax fraud to the list

Even the French lease scheme ( and the Malta ) fell foul of EU vat law and France had to discontinue it in the face of EU sanctions. ( it was classed as illegal state aid)

If I had tuppence over the years from people trying to convince me that what there were doing was legitimate when it clearly wasn’t, I’d be a millionaire

The same people “ pushing their luck “ are currently flouting the 18 month TIP vat rules to the point where EU residences with foreign non eu passports are claiming tip

The result is the EU is looking at a major clampdown and changing the tip rules resulting in more and more hassle for legitimate tip users

The greek transit log tip process is being watched with interest though some countries see too much admin in adopting it.

The “tragedy of the commons “ endlessly repeats.

What you mentioned above is very valid but this is not the process I followed. it happens to all of us, we have a scenario in our mind and we jump into conclusions... In any case, I do not wish to continue this discussion as i do not see it productive nor being in benefit for the original post... plus I stated earlier I am not trying to convince you so you will not have my 2 pence :-) Bye...

[goboatingnow]

Originally Posted by SChris

What you mentioned above is very valid but this is not the process I followed. it happens to all of us, we have a scenario in our mind and we jump into conclusions... In any case, I do not wish to continue this discussion as i do not see it productive nor being in benefit for the original post... plus I stated earlier I am not trying to convince you so you will not have my 2 pence :-) Bye...

Agreed this has no relevance to the OP. I eas merely countering what I saw was the bad advice about company vat. I’m not trying to convince you. Im merely ensuring other people realise it’s bad advice !!

[Slaw]

Hello folks, one more scenario.

My boat is built in France.
It is sold to me by a U.S. company and will be owned by an US LLC. I am a polish Citizen, but tax resident in the US.
The boat will sail out of France within 30 days of registration and go to BVI, and never be back in EU.
Can I register under the Polish flag and not pay VAT?
Can the boat by owner by an US LLC and have a Polish Flag?
Thank you a ton!

[Pete7]

Originally Posted by Slaw

Hello folks, one more scenario.

My boat is built in France.
It is sold to me by a U.S. company and will be owned by an US LLC. I am a polish Citizen, but tax resident in the US.
The boat will sail out of France within 30 days of registration and go to BVI, and never be back in EU.
Can I register under the Polish flag and not pay VAT?
Can the boat by owner by an US LLC and have a Polish Flag?
Thank you a ton!

So is this a new yacht being built in France that you are trying to avoid paying VAT on by exporting it at the point of sale?

Tread carefully, tax inspectors will be delighted to get a wiff of this transaction. Not saying it can't be done, but you must tread carefully.

Pete

[CNulli]

Hi, the registration and VAT are not linked. You could have a boat anywhere and have it registered with Poland.

If you have a boat staying in EU, you need to pay VAT.

I caution you to get insurance quotes first. Insurance companies might have issues with EU registration and keeping the boat in a different location. That was the issue I ran into which forced me to get an EU registration. It is a commercial business tax issue for the insurance companies.

Talk with the builder, I am pretty certain that if you leave the EU within some time period after purchase you will not need to pay VAT. This is the case for many vessels sold out of the Mediterranean that were chartered. They do not have VAT paid as they were owned by a business. Then sold to a private person who has X days to leave the EU else subject to VAT.

Originally Posted by Slaw

Hello folks, one more scenario.

My boat is built in France.
It is sold to me by a U.S. company and will be owned by an US LLC. I am a polish Citizen, but tax resident in the US.
The boat will sail out of France within 30 days of registration and go to BVI, and never be back in EU.
Can I register under the Polish flag and not pay VAT?
Can the boat by owner by an US LLC and have a Polish Flag?
Thank you a ton!