UK / EU VAT paid no longer valid

[ReneJK]

Originally Posted by Dockhead

I wonder if some failure to do so, affects later purchasers?


Even though I have spent the last 30 years of my life in Europe, I still find VAT and its various nuances to be rather mystifying.

I think VAT is 'only' difficult with boats , because they are mobile and can travel without any problem from outside to inside the EU customs union , and because they represent quite a large value customs is always interested

re your questions , the proof always lies with the current owner , previous owners may have sailed outside the customs union and therefor were not liaible to pay the VAT , or maybe the previous owner was a cistizen from outside the VAT zone (USA, Australia etc ) even if a previous owner was a EU private person he could have brought it in , from lets say , Turkey or Montenegro and put it up for sale it is still the prospective /current owners responsibility to make sure VAT was paid or pay the VAT on purchase at the local customs office and get a receipt

[Montanan]

Originally Posted by Jamme

Following with interest (luckily in this case from far away as a EU citizen permanently based in the USA)… If confirmed true, this would be an incredibly unfair consequence (paid by innocent end users) of two states bickering. It may have been said and I may have missed it, how much would the Greek VAT % be?

24%.

Ya got to be liking the low or no consumption taxation of the States of the USA. In Montana there are no sales / use / VAT taxes on any purchases of goods or services. Paying 20%+ more for the purchase or lease of something would seem to dramatically reduce one's effective disposable income. Makes me wonder what the heck the governments' do with the massive amount of revenue derived from that huge percentage of gross national production.

[ReneJK]

Originally Posted by Montanan

Makes me wonder what the heck the governments' do with the massive amount of revenue derived from that huge percentage of gross national production.

its not a tax on production ?


its more a consumption tax , the more you buy/consume , the more VAT the government receives , and there are various rates , low rates for essentials food stuff etc , high rates on the more 'luxury' items


and what they do with that tax income ?
affordable healthcare
pensions
unemployment benefits
hospitals
schools and afforable education
infrastructure

etc
etc
etc

[Pete7]

Originally Posted by moseriw

Anders to my understanding. When a private person buys from a company the company is liable to sell with VAT and has to credit it to its VAT-Account.

Correct, well my understanding too. So a charter company buys a nice new Beneteau in France, after all they are French and claims back the VAT through their VAT account. However, they do have have to declare all VAT on the income generated through charter work and pay this to the French Gov.

At the end of 5 years said Beneteau is starting to look a little ropey and needs some cash spending on it urgently. Company sell the boat off quick to a private individual in France. Income generated from the sale is then liable for VAT to square away the disposal of an asset which will have depreciated substantially, so far less VAT due to the Gov at the 5 year point.

If they sell the Beneteau abroad or to a foreigner in France that is different and may not be liable for VAT at the point of sale.

Naturally Customs are well aware and on the lookout for anyone shaving a bit off the value or even disposing of an asset without fully accounting for it.

Applies to cars and aeroplanes along with lots of other things.

Originally Posted by Anders

Gibraltar is not part of the EU customs union so why do you think your ok? Where was the sale according to the invoice?

Well it is now.


https://www.etias.info/gibraltar-joi...-after-brexit/

Pete

[Pete7]

Originally Posted by Dockhead

Is there such a thing? What is that document called?

There is such a thing, but you really don't want the UK version because it means you have had to pay an awful lot of tax to get a piece of paper as a receipt.

Pete

[AlfaGTV]

Originally Posted by Pete7

Correct, well my understanding too. So a charter company buys a nice new Beneteau in France, after all they are French and claims back the VAT through their VAT account. However, they do have have to declare all VAT on the income generated through charter work and pay this to the French Gov.

At the end of 5 years said Beneteau is starting to look a little ropey and needs some cash spending on it urgently. Company sell the boat off quick to a private individual in France. Income generated from the sale is then liable for VAT to square away the disposal of an asset which will have depreciated substantially, so far less VAT due to the Gov at the 5 year point.

If they sell the Beneteau abroad or to a foreigner in France that is different and may not be liable for VAT at the point of sale.

Naturally Customs are well aware and on the lookout for anyone shaving a bit off the value or even disposing of an asset without fully accounting for it.

Applies to cars and aeroplanes along with lots of other things.



Well it is now.


https://www.etias.info/gibraltar-joi...-after-brexit/

Pete

Schengen has nothing to do with EU customs union. The original Schengen agreement was signed in 1985, long before the EU.
Gibraltar is not part of the EU customs union.

[Pete7]

I think its all still to play for:

https://www.gibraltar.gov.gi/press-r...nt-612021-6604

It will also seek to address maximised and unrestricted mobility of goods between Gibraltar and the European Union which could be something that forms part of that final treaty.

[ReneJK]

Originally Posted by Pete7

Well it is now.


https://www.etias.info/gibraltar-joi...-after-brexit/

Pete

part of Schengen doesnt mean Gib will be part of the customs union ?

afaik Gib is and will remain outside the EU customs union

[Pete7]

That would suggest a customs boarder between Gib and Spain, something that hasn't existed for a long time. What happens to all the goods going back and forth across the boarder?

Pete

[ReneJK]

@Pete



when we walked across the border from Gib to Spain , before Brexit, there was a customs checkpoint ?
I think there always has been a customs checkpoint ? Alcohol and Liquor are being smuggled constantly

[Pete7]

1986 was the last time I walked crossed that boarder. The Spanish photographed my passport, what a cheek

[admiral 31]

Does anyone have any idea on how this would affect a European flagged boat built in 1980?
or even a British flagged boat based in Europe?



i.e. Built before Vat came in to effect.

[Anders]

Originally Posted by Dockhead

I wonder if some failure to do so, affects later purchasers?


Even though I have spent the last 30 years of my life in Europe, I still find VAT and its various nuances to be rather mystifying.

Anyone that runs a business in Europe are used to account for VAT. The basics of VAT is that you charge VAT on anything you sell. You then subtract the VAT you paid to your suppliers. The rest you send to the tax authorities, in my case that's HMRC.
In the unlikely case that a company has sold a boat without paying in the VAT I can't see how that would be a problem for someone who has bought that boat later since they have done nothing wrong. Even if someone would want to investigate they would have to check the accounts of the selling company and any company only have to keep records for a limited time. For me thats 6 years.

[Montanan]

Originally Posted by admiral 31

Does anyone have any idea on how this would affect a European flagged boat built in 1980?
or even a British flagged boat based in Europe?



i.e. Built before Vat came in to effect.

To be clear that would be in the BV era [Before VAT] and before Brexit.

https://uk.boats.com/boat-buyers-guide/vat-boats-guide/

Older vessels built before 1985 are deemed VAT paid if they were in the EU on December 31, 1992, providing there’s paperwork to support both dates. For age this could be a marine survey, Part 1 registration, insurance documents or a builder’s certificate, while receipts for mooring or winter storage would satisfy the location requirement. When buying a second-hand pleasure craft from any VAT-registered business in the EU, the invoice should itemise the VAT charged to you in that transaction.

If you are unable to provide the normal documentation as above, for vessels kept in the UK it’s recommended that, while cruising within the EU, you carry a Bill of Sale (if applicable and between two private individuals in the UK). Although this is not conclusive proof VAT has been paid, it indicates that the tax status is the responsibility of UK authorities.

VAT ON BOATS WHEN BUYING SECOND-HAND

The Association of Brokers and Yacht Agents (ABYA) recommends that its members should obtain the relevant paperwork from the vendor before listing a yacht as being VAT paid. However, sadly, not all are so diligent, which can lead to delays in a transaction at a later date. On the other hand there are also brokers who are adept at tracing a long-forgotten trail of paperwork, even where companies are no longer in business.

Complications also arise because a VAT paid boat can lose this status. This will happen, for instance, if it’s sold outside the EU – even if purchaser and vendor are EU residents. VAT must then be paid if the boat is brought back into the EU. Equally, boats that are kept outside the EU for more than three years may be required to pay VAT again.

However, if the permanent importation of the boat coincides with transferring your residence from outside the EU to within the EU, it may qualify for VAT relief. Similarly, a VAT-paid boat exported from the EU (such as when long-term cruising) may also qualify for relief on its return if it’s returned to the EU within three years of export. That is as long as it's imported by the person who exported it from the EU, and has not undergone significant repairs that increased its value.

If you’re not resident in an EU country, you also can temporally import the vessel without paying VAT, for instance to cruise in the EU, usually for a period of up to 18 months.

BUYING WITHOUT THE APPROPRIATE PAPERWORK

Should you expect the price of a second-hand boat to be reduced if it doesn’t have the appropriate paperwork? There’s no clear-cut answer to this. For many smaller lower value craft the vessel’s condition and level of equipment has a much greater bearing on its value than the 20 per cent VAT. On the other hand, it’s clear that a one-owner boat that’s only a few years old will be reduced in value by the entire value of the VAT if the paperwork is not available. Unfortunately, there are also many cases in which the legal situation is not clear cut, especially as VAT on boats is a tax on a transaction – the sale or importation of goods or services – not on the vessel itself. It’s in these cases that an expert broker or solicitor can help out significantly, especially for high-value yachts.