Question about VAT

[Low Country Home Builder]

I am not ready to buy yet but looking at Lagoon 440's and several indicate that VAT tax has not paid. How much is VAT on a sale of $400,000 usd? The boat is in St. Martin but I am US citizen living in US.

[PyotrBee]

VAT only applies if you are a EU resident or the boat will be registered in the EU.

[PyotrBee]

The VAT rate also varies depending on which EU country it "goes" to. 17-24% or so.

[simonmd]

Yes, they are simply advertising the boat as 'tax not paid' as some of the carribean islands come under EU tax regulations and of course, fo any potential EU citizens wishing to buy with a view to returing to Europe with it. For you, it won't apply, asside from any local import tax that you may have to pay to bring her to the US that is.

[Bill4]

Originally Posted by simonmd

Yes, they are simply advertising the boat as 'tax not paid' as some of the carribean islands come under EU tax regulations and of course, fo any potential EU citizens wishing to buy with a view to returing to Europe with it. For you, it won't apply, asside from any local import tax that you may have to pay to bring her to the US that is.

Your post is correct but doesn't tell the full story. Anyone reading this should be aware of the difference between mainland Europe for VAT purposes and European Overseas Territories for VAT purposes, which usually have VAT rates far lower than their mainland counterparts.

If a boat has had European Overseas Territory VAT paid (in a Caribbean island such as Guadeloupe for example) and the boat is then taken to a mainland European country by a mainland European, the boat will become liable for the difference between the European Overseas Territory (Guadeloupe, etc, as applicable) VAT rate and the mainland European country of import applicable VAT rate.

VAT rates in Overseas Territories were very low last time I looked. Something like 4%. Mainland Europe VAT rates are typically in the region of 20%. The advantages to a purchaser were obvious and that's why the tax authorities closed the loophole.