Paying European VAT on a Halberg-Rassy purchased on Carribean

[pskudlarski]

Hello, we have purchased a HR on Grenada and would like to take it to Europe. I wonder if we could avoid VAT since the yacht was built in Sweden and it was owned (three owners and 5 years back) by a German. Is there a chance we can trace it by ship number? We have no contact for that owner. We have dual US and European citizenship if it matters. Thanks.

[edsailing]

Even if VAT was paid originally, because it has been exported and changed hands, I believe it will have to have VAT paid again on entry to the EU if it is imported - you may be able to visit without tax liability.

If you import it, do it in the country that has the lowest rate of tax.

[Zanshin]

The German law is, unfortunately, pretty specific. Even if the purchase had been done in the EU, items that have been out of the EU for 5 years are considered to have lost their VAT-Paid status.
I purchased a British-Flagged and VAT paid boat in the BVI and kept the U.K. flag, but because the exchange of ownership happened outside of the EU the VAT status was lost (had I signed the contract while in French St. Martin instead of the BVI it would have been different!).
Malta has some sweet taxation deals which are worth looking into. If you don't have proof of paid VAT when you enter the EU the first country you touch will collect their VAT rate on what they deem to be the value of the boat. So if you stop in the Azores on the way over you'd pay the Portuguese VAT.
Another "gotcha" is that if you have (and use) a passport from an EU member country you won't be able to get by entering the EU without importing the boat. If you enter using a US passport then you get the usual 18 months on the boat clock for the boat and 6 months for the non-EU passport holders aboard.

[BM2023]

Depending on the individual state, if you do not have an original invoice that proves VAT was paid and no VAT declaration, you will have to pay both VAT as well as import duties. The lowest EU VAT rate, I believe, is 17% in Luxembourg and the highest is 27% in Hungary.

The import duties vary per country. In the Netherlands, for example import duties for vessels of <12m is 1.7% and 0% for vessel >12m.

Also, note that when the vessel is imported, it will physically have to be present in the country it is imported in, as customs may want to inspect the vessel. To save time, aggravation, etc. I would recommend involving a specialised clearing agent.

[Tillsbury]

I imagine it's quite difficult to import a yacht into Luxembourg ��

[paulajayne]

Originally Posted by Tillsbury

I imagine it's quite difficult to import a yacht into Luxembourg ��

They have lakes.

[valhalla360]

Originally Posted by Tillsbury

I imagine it's quite difficult to import a yacht into Luxembourg ��

The only real difficulty is making Luxembourg your first stop in the EU. I believe you have to declare at the first EU country you enter.

But you can take the Rhine to Moselle to get to Luxembourg by boat.

[boatman61]

I would suggest you pay the VAT in the Azores when you reach Horta on the island of Faial.
I have done that with two boats to date and it is very simple and straightforward. Last time was in 2006 with a Beneteau 331 bought for US$60K.. the VAT paid was £3700 or thereabouts.
Back then thhe max VAT was 15%.
Book the inspection, the assessor arrives and checks the Bill of sale and paperwork, has a glance round the boat and thats it.
Next day go to the office and hand over the check and collect the certificate..
VAT is the same as Malta at 18% with the minimum 5% and the intermediate at 10%.

[robert sailor]

You can avoid paying the VAT by moving to different countries as required to reset the clock.

[Pete7]

Originally Posted by robert sailor

You can avoid paying the VAT by moving to different countries as required to reset the clock.

They are EU citizens, so need to pay up on first arrival in the EU.

Pete

[valhalla360]

Originally Posted by Pete7

They are EU citizens, so need to pay up on first arrival in the EU.

Pete

But where are they residents? Residency is what counts.

[Montanan]

Originally Posted by pskudlarski

Hello, we have purchased a HR on Grenada and would like to take it to Europe. I wonder if we could avoid VAT since the yacht was built in Sweden and it was owned (three owners and 5 years back) by a German. Is there a chance we can trace it by ship number? We have no contact for that owner. We have dual US and European citizenship if it matters. Thanks.

You have stated that you have dual citizenship, but are you EU residents? The residency characteristic may make for a distinction wherein if the boat owner is not a EU resident or an EU corporation, you could realize a temporary import and have the 18 month clocking. Sorry, I am a bit uncertain on that aspect, would need to investigate a bit further to be assured that it is a potential VAT and import duty waiver strategy.

A potential useful reference in this regard, note this law firm has a EU yachting expert, i.e., someone that may be worth discussing your situation with:

https://www.keystonelaw.com/keynotes...ers-and-owners

Snipets therefrom:

Value Added Tax (VAT) is a tax scheme that was established by the EU. It is a tax on what is referred to as consumption and is levied by the government of each member state. As a consequence VAT is chargeable on boats imported into the EU and on boats purchased and owned by residents of the EU who are using their boat within the EU. VAT is also chargeable on boats, irrespective of ownership, which spend more than 6 months in any calendar year cruising in the EU, although there is scope to enable an owner to use a yacht in the EU without being liable for VAT. EU residents should only use a vessel in the EU if it is VAT paid or deemed VAT paid

Can a boat lose its VAT paid status?
If a yacht with VAT paid status is exported from the EU it will usually qualify for relief from having to pay VAT again if it is imported back into the EU within 3 years of its export, provided that it is imported by the same person who exported it, i.e. no change of owner whilst outside the EU. However, this will not exempt it from any customs duties that maybe apply. If your boat will be exported for more than 3 years you should check the position with customs.

Enjoy your new boat.