US citizen/resident & EU citizen buying EU boat

[RELENTLESS 1]

De.Windhoos - Thanks!

That may change the timing on heading back to the factory and putting her on the hard.
Or it may change when I authorize work to start because I would really like to be able to go back and forth to check on it. I am hoping to engage an overseer - but not sure about that.

I will make sure that for the couple of days we are not in the EU I will get the Passport stamped and buy some fuel and keep the receipt.
Thanks again to all of you!

[ReneJK]

Originally Posted by boom23

I think I have it all figured out, but there is something I am not clear about. I would appreciate some help on this. I plan to consult an attorney but I would like to be a little more prepared, if possible.

I searched the forum but I did not have much luck.


Here are some facts:
My wife and I are US citizens and residents. We are also EU citizens (from different EU countries).

We are buying a no-VAT paid boat in France. We would like to legally avoid paying EU VAT, since we plan to bring the boat to US eventually.

We want to cruise the Med for few years and still maintain our US residency. During the off season, we will be leaving the boat in Turkey, which is a non-EU country, and will be returning to US.

We know that a non-EU country resident can keep his boat in any EU country for up to 18 months. The boat clock can be reset by taking the boat to a non-EU country, even for a day.

We also know that for a person to be resident of an EU country, he must stay in that EU country for more than 183 days in a calendar year.

If the boat's owner/skipper is EU resident, the boat's VAT is due and payable.


My question is:
Do I still become an EU resident, (and of which country) if I stay in EU more than 183 days total, but less than 183 days in each of the EU countries?

In other words, if I stay in each EU country for, example, 60 days, for a total of 183+ days in the whole EU, do I still become an EU resident?

Thank you in advance.

As I understand it (i am not an expert so get definitive advice from an expert)

1) as you are US residents/citizens AND european citizens (i assume you both have dual passports ?) you can legally buy a non-VAT paid yacht (used) or buy a new yacht without paying VAT if you can prove your US residency (its where you reside and your home address is thats important for VAT)

2) the non-VAT paid yacht can stay for 18 months in the schengen area without problems , after or during the 18 months 1day out of the schengen area will reset that clock

3) as you are both european (schengen) citizens you are not impacted by the 90 out of every 180 days BUT countries may require that you become residents after you officially spend 180+ days in that country. That depends largely on the country and as far as i know different countries may have different rules.

That is easily solved as you just move to the next country or between countries , and I am not sure how they would figure something like that out unless you spend 6 months in the same place (marina ?) get checked by immigration and you can’t prove you’ve been elsewhere during those 6 months

4) there is no such thing as EU residency , you will not (can not) become an EU resident . Even if you spend 3 or more years in the EU and move between countries every 3-6 months you will not become a resident . Now spend 6 months in a single country and you may start getting questions

[boom23]

Originally Posted by ReneJK

As I understand it (i am not an expert so get definitive advice from an expert)

1) as you are US residents/citizens AND european citizens (i assume you both have dual passports ?) you can legally buy a non-VAT paid yacht (used) or buy a new yacht without paying VAT if you can prove your US residency (its where you reside and your home address is thats important for VAT)

2) the non-VAT paid yacht can stay for 18 months in the schengen area without problems , after or during the 18 months 1day out of the schengen area will reset that clock

3) as you are both european (schengen) citizens you are not impacted by the 90 out of every 180 days BUT countries may require that you become residents after you officially spend 180+ days in that country. That depends largely on the country and as far as i know different countries may have different rules.

That is easily solved as you just move to the next country or between countries , and I am not sure how they would figure something like that out unless you spend 6 months in the same place (marina ?) get checked by immigration and you can’t prove you’ve been elsewhere during those 6 months

4) there is no such thing as EU residency , you will not (can not) become an EU resident . Even if you spend 3 or more years in the EU and move between countries every 3-6 months you will not become a resident . Now spend 6 months in a single country and you may start getting questions

Thank you ReneJK.

I was confused about the concept of EU residency. I guess I have to worry about an EU country residency instead. I do not plan to stay for more than 180 days in any one EU country per calendar year.

I will definitely check with an expert too.

[mako]

boom23 there are a bunch of different things being discussed in this thread. What I understand, based on being an America and Italian, is as follows. But this is based on my situation and I don't know if all EU countries follow the same laws:

• Regarding an American residing outside the US, there is a "physical presence" test that one can use yearly when filing your taxes. It states that you cannot be physically inside the USA more than 30 days per year;
• As an Italian I am required to register my residency. Currently I reside in Qatar and am registered with the embassy and therefore do not pay Italian income tax;
• Residency is based on 6 months;
• As an Italian, if I am in command of a vessel in Italian waters then VAT is required to be paid on that vessel. They are very serious about this and I would suggest not screwing around;
• I would suggest flying into France to pickup your boat under your American passport. Take possession of your American-documented boat. Your EU passport should remain hidden or leave it back home in California. This is perhaps dodging taxes but who wants to pay 22%???
• In the future if you permanently move to your EU home country, then you can bring your vessel with you as personal property and not pay VAT. Just like a car. Change your documentation to EU. Of course it will need to have a CE mark. I confirmed this twice with the Italian government. Something to keep in mind for the future.
  
  Hope this helps.

[boom23]

Thank you Makobuilders.

It is my understanding that, in my situation, residency is what is important, not citizenship. So, as a US resident/citizen I can be in command of a no-EU-VAT-paid, US registered, boat even though I also have an EU passport. I am not an EU resident and I will have proof of that.

My intention is to buy a French boat, sail in the Med for few years and then cross the Atlantic. I do not plan to change my US residency. I will be taking the boat out of EU every 18 months to restart the 18 month boat clock. Also, I will not stay in any EU country more than 180 days, as I plan to be in USA for more than 180 days. I want to remain US resident.

It is freaking complicated but doable as I do not have the added complexity of Schengen because I have an EU passport...

[mako]

boom, you're right that this gets complicated and the cost of making a mistake could be tens of thousands of dollars, so definitely hire a tax expert in the EU before proceeding.

But be very cautious about the statement "residency is what is important, not citizenship" and make sure to confirm this. What the Italian government has told me in quite clear words is completely the opposite. As an Italian, if I borrow my friend's boat and sail in Italian waters then VAT is due. Period. Scary stuff, the tax-man is

[boom23]

Originally Posted by makobuilders

boom, you're right that this gets complicated and the cost of making a mistake could be tens of thousands of dollars, so definitely hire a tax expert in the EU before proceeding.

But be very cautious about the statement "residency is what is important, not citizenship" and make sure to confirm this. What the Italian government has told me in quite clear words is completely the opposite. As an Italian, if I borrow my friend's boat and sail in Italian waters then VAT is due. Period. Scary stuff, the tax-man is

I agree... I will hire an expert in this area before proceeding. From personal experience (Greece & Italy), Europe is a mess when it comes to taxes. Thanks again.

[De.windhoos]

Originally Posted by Dawntreader2

De.Windhoos - Thanks!

That may change the timing on heading back to the factory and putting her on the hard.
Or it may change when I authorize work to start because I would really like to be able to go back and forth to check on it. I am hoping to engage an overseer - but not sure about that.

I will make sure that for the couple of days we are not in the EU I will get the Passport stamped and buy some fuel and keep the receipt.
Thanks again to all of you!

Im sorry, I didn't catch that you both are EU citizens. If you have EU passports the visa rules don't apply to you and you can stay as long as you like.

However this might cause some issues on the VAT for your boat. You'll need to be able to proof that you are not EU residents. this is easily done by having proof that your economic roots are outside the EU.

[SV Accomplice]

Originally Posted by boom23

I am US citizen and resident. I pay (lots of) taxes in US. I can prove that.

I have also dealt with European countries bureaucracy to know what kind of pain that is... I want to be prepared for any complications before they happen.

Happy New Year Boom! We are in a very similar situation except that only my wife has EU Citizenship (Greek citizenship granted yesterday!). I understand this makes it easier for us to straddle the Boat (to be owned through DE entity by me as only US citizen) and the VISA situation (I can benefit from my wife's citizenship without compromising VAT status). However, there are still many details to sort out. Would you be willing to share the attorney/advisors that you have connected with that you respect? I'd like to get second opinions on some of our details. For instance, I thought the LLC vs. Corp topic was a relatively simple one (I was leaning towards DE LLC) but DelReg is telling me 95% of their international clients use Corporations but they can't tell me why. I'd love to talk to learn more on this and other legal/tax issues for our circumstances. I'm more than happy to connect if I can offer any insight in return.

Happy New Year

[boom23]

Originally Posted by SV Accomplice

Happy New Year Boom! We are in a very similar situation except that only my wife has EU Citizenship (Greek citizenship granted yesterday!). I understand this makes it easier for us to straddle the Boat (to be owned through DE entity by me as only US citizen) and the VISA situation (I can benefit from my wife's citizenship without compromising VAT status). However, there are still many details to sort out. Would you be willing to share the attorney/advisors that you have connected with that you respect? I'd like to get second opinions on some of our details. For instance, I thought the LLC vs. Corp topic was a relatively simple one (I was leaning towards DE LLC) but DelReg is telling me 95% of their international clients use Corporations but they can't tell me why. I'd love to talk to learn more on this and other legal/tax issues for our circumstances. I'm more than happy to connect if I can offer any insight in return.

Happy New Year

Happy New Year!

Your question is complex and it depends on your situation. You need to add the experts for that. I sent you a PM with the name of the firm I used a few times.

[Miketcq8]

Originally Posted by boom23

Good question... How does Europe determine residency for citizens visiting on a boat? Bills? Flight ticket? Port/country check in documents? They must have something and it's probably different per country.

My original question is how does one determine EU country residency. I understand the 183 day rule, but what if one spends 100 days in two or three EU countries?
Does he still become an EU resident, and of which country?

My 50 cents worth, you only check in to the first EU country on your visit. You check out on the last country before you exit the EU and sail to a non EU country like Turkey or North African counties in the Med. Irrespective of which EU country you visit while sailing in the Med.
Do not be confused with non Schengen countries like Croatia. Croatia is part of the EU.
Hope this helps.

[wolfgal]

i'm no specialist and could be wrong, but my own questions have led me to believe that one is technically considered a resident of a specific EU country (as opposed to the EU itself) after spending 183 days in that country, and this, unless in instances when one is sent abroad for work and the family stays behind in the house, etc.(there are specific examples)

as far as i can see, a single person who moves to another EU country and settles down must change his/her residence status to that country. this usually entails opening a bank account and buying into some health insurance plan in that country.

however there is also the need to distinguish between where one lives and where one pays taxes.

where one pays taxes: fiscal residency tends to depend on from which EU country one's income comes.

there used to be some escape plans for retirees who paid high taxes in the source country. this was the case when taking up residency in Portugal until last year (still exists it seems but the deal is not as advantageous). i read that Italy may had the plan to attract retirees with something similar


hope this helps


wolfgal

[edmundsteele]

I am a dual national (USA and UK) and sailed a non VAT paid Amel Super Maramu through the Med in 2009. My experience was that the only time we brushed with authorities was with French police / customs / whatever, at a marina in Corsica. They were concerned that the Amel (flying a USA flag) was not VAT paid. They wanted to know how how long we had been in the various E.U. countries. When I showed them our USA passports and a list of ports visited, they went away happy. I am sure that if I had produced my E.U. passport, it would not have been so smooth.

The point is that they were specifically looking for Euro built boats that were not VAT paid.

On another topic, when you fill out the paperwork for Federal registration for your boat, it asks for your State of registration on the form. I have used “Delaware” on the form for two different boats, even though the home port painted on the stern said, “Santa Fe, New Mexico”. The Amel was actually registered in Delaware and I even paid the annual fee once, although I never registered the second boat. Neither boat stayed in the USA and the only current registration was the Federal. Delaware has the triple advantage of no State sales tax, you can do all of the registration on-line and Delaware does not require a separate registration for a dinghy that is used as tender to a Delaware registered boat.