Where to flag and pay VAT

[acunningham]

Originally Posted by colombo

Is there a fourth option of buying a boat that has EU VAT paid status, and then flagging it as British? Or can I buy a boat with no VAT paid on it, pay EU VAT and then flag it as British? Would that both tie me to the uk from a tax residency perspective and remove the need to dart back and forth from non EU waters?

If my understanding is correct, you can easily do either of these. Neither will affect your tax residency. Both will save you the inconvenience of having to leave EU waters every 18 months. The downside is that you have to pay the extra cost of the VAT, either in the purchase price, or separately.


Having said that, please don't take financial advice from random people on the internet like me. I might not know what I'm talking about. Consult a professional who specialises in this area.

[goboatingnow]

Is there a fourth option of buying a boat that has EU VAT paid status, and then flagging it as British? Or can I buy a boat with no VAT paid on it, pay EU VAT and then flag it as British? Would that both tie me to the uk from a tax residency perspective and remove the need to dart back and forth from non EU waters?

If you buy a boat with eu vat paid , and your desire is to keep it in the EU , then it would be very silly to UK register it as there is a danger that you will be accessed under temporary admissions procedures. , whereas if you EU register With eu vat paid proof , you can keep it in the EU for ever.

The reason is that “ technically “ taking a UK boat out of EU waters , removes its EU VAT status as you are not entitled to RGR.

While the sane is true for eu reg , you are much less likely to be queried

[kas_1611]

If you buy a boat that is EU VAT PAID it doesn't matter then what national flag you fly off the back. Flag status has nothing to do with VAT Status.

Our is UK Registered on the SSR but Croatian VAT Paid and currently in Greece. And she will NOT lose any VAT Paid status at the end of the year over her red ensign.

If you are not planning on sailing it back to the UK then probably easier to pay EU VAT rather than having to take it out every year (18 months)

[goboatingnow]

Originally Posted by kas_1611

If you buy a boat that is EU VAT PAID it doesn't matter then what national flag you fly off the back. Flag status has nothing to do with VAT Status.

Our is UK Registered on the SSR but Croatian VAT Paid and currently in Greece. And she will NOT lose any VAT Paid status at the end of the year over her red ensign.

If you are not planning on sailing it back to the UK then probably easier to pay EU VAT rather than having to take it out every year (18 months)

Your statement needs nuancing

Exporting any VAT paid item from the EU , for example visiting a non Eu country means that vat paid status is lost

On re-importing that boat into the EU, ie on returning from that country , the situation for a UK tax resident , upto 31st Dec , was that RGR ( returned goods relief ) was automatically applied, this is available for absences of upto three years

However RGR relief is only available to entities established in the EU , hence it applied to UK owners todate

After 31st Dec , UK owners of EU vat paid items , cannot normally avail of EU RGR , hence their “ exported “ EU boat will be readmitted under the TAP ( temporary admissions procedure ) this is the 18 month vat clock . But EU vat paid status is lost

So you are correct , any EU boat ( uk or Croatian , or whatever ) retains its “ VAT status “ once it remains in the EU taking it out , exports it , and looses it vat status , the issue for uk established persons after dec31 , is its difficult to regain EU vat status.

This is exactly why HMRC have advised uk owners of uk vat paid boats abroad for more then three years that they will be liable for UK vat on return to the uk.

Vat isn’t related to the flag of the vessel , that’s quite correct , but it is rekated to the tax establishment of the beneficial owner

So yes your UK boat with vat paid is fine as long as it never leaves EU waters

Of course whether the Greeks or anyone else check any of this is another question entirely, but UK registry will tend to provoke more questions after Dec 31 , so it would be better to be EU registered in general

[De.windhoos]

• Flag has nothing to do with VAT. You can flag it in the UK without any impact on VAT.
• Since you are a UK resident you can buy a NON-VAT paid boat and use the 18 months rule. This is not a problem in the Med, because there are enough countries to go to.
• You can use your German passport to avoid the 90/180 day Schengen shuffle.

The tricky bit will be to prove to and convince various authorities that although you travel under a German passport, you are a UK resident and therefore not obligated to pay "EU" VAT but sail under the temporary import rules.
The rules, especially the exceptions to the rules are not always well known by local port police, customs officers, etc.
So if you go this route I would strongly recommend:

• print out the rules and applicable exceptions and maybe even have it in the local language. Include references to applicable law. the EU site has a ton of information.
• have ample proof that you reside in the UK.
• Stay calm and polite when talking to local authorities.

Alternatively, pay VAT in the EU country with the lowest VAT rate, I believe that's Malta. That would mean a straight trip from where you buy the boat, to where you plan to pay VAT.
advantage of this is that you have no hassles what so ever.

[getthejibin]

Gibraltar is fine as a reset port for the VAT clock for UK boats in EU waters over 18 months, I have had this verified.

[chasfgr]

Malta, as far as I know, offers the greatest benefits - but you have to be a resident, which will, for all countries, be a recurrent problem.
Most have the boat registered through a local agent - lawyer or like.
VAT is paid to the country in which the owner is resident and purchase tax at the rate in the country of purchase transaction.
No purchase tax on purchases of pre-owned boats (which includes demonstrators)

[goboatingnow]

Originally Posted by chasfgr

Malta, as far as I know, offers the greatest benefits - but you have to be a resident, which will, for all countries, be a recurrent problem.
Most have the boat registered through a local agent - lawyer or like.
VAT is paid to the country in which the owner is resident and purchase tax at the rate in the country of purchase transaction.
No purchase tax on purchases of pre-owned boats (which includes demonstrators)

A boat is a “ new means of transport “

Hence VAT is paid in the country of intended destination of the “ means of transport “ the residence of the buyer is not relevant ( though its usually the same ?

Again this similar to goods, if I as a Irish tax resident buy goods in Spain , I pay Spainish vat

Equally if I buy a boat in Spain whose destination is Ireland. I pay the vat in Ireland. ( typically I have to then reclaim Spanish vat )

I’m not sure what you mean by purchase tax , if you mean vat on purchases this only applies to vat registered traders

[goboatingnow]

Malta has a VAT rate of 18% , but it also has a reduced rate on lease back schemes. However there is considerable complexity and it’s not suited to the average pleasure yacht

[boatman61]

I don't think VAT is applicable to secondhand boats.. so if for example I, living in Portugal buy a secondhand boat in Holland I don't pay VAT.. nor do I have to pay it on arrival in Portugal unless I sail it out of the EU for more than 3yrs.
The same as a boat bought in Malta which I then sailed to Portugal.. no VAT.

[goboatingnow]

Originally Posted by boatman61

I don't think VAT is applicable to secondhand boats.. so if for example I, living in Portugal buy a secondhand boat in Holland I don't pay VAT.. nor do I have to pay it on arrival in Portugal unless I sail it out of the EU for more than 3yrs.

The same as a boat bought in Malta which I then sailed to Portugal.. no VAT.

It’s not applicable to second hand boats that are vat paid and resident in the single market , ie in free circulation.

It’s entirely applicable if the boat is vat not paid ,new or 2nd hand. ( ex charter , or in the EU under the temporary admissions procedure , or owned by a vat registered business )

[acunningham]

Originally Posted by acunningham

UK part 1 registration by individuals is actually based on citizenship. If you're like me and a UK citizen but not UK tax resident, then UK part 1 registration is a viable option either with or without registering a UK limited company. The same is true if you're a citizen of a commonwealth country, or fit various other qualifying criteria:

https://www.ukshipregister.co.uk/reg...n/eligibility/

If none of these apply to you, then you'll need to create a UK limited company or appoint an agent.

Originally Posted by goboatingnow

Err you need to read your own link , the eligibility criteria contain the following provision

“ If none of the qualified owners are resident in the UK, a representative must be appointed who is either of the following:“

Hence even if you are qualified to register , you must have a ships agent if you dont live in the uk

Interestingly, despite the UK Ship registry website being as you say, I've just done the UK registration for my boat and receive the Certificate of Registry from the MCA today (on a Sunday no less!), and the actual application form only asked about UK citizenship, not about UK residency. No mention of residency was made, and no questions of residency were asked, at any point during the registration process. I think your viewpoint is probably correct; but the MCA is being more lenient than their own rules.

[acunningham]

Originally Posted by acunningham

Interestingly, despite the UK Ship registry website being as you say, I've just done the UK registration for my boat and receive the certificate of registry from the MCA today (on a Sunday no less!), and the actual application form only asked about UK citizenship, not about UK residency. No mention of residency was made, and no questions of residency asked, at any point during the registration process. I think your viewpoint is probably correct; but the MCA is being more lenient than their own rules.

Incidentally, I'd just like to say that the UK Maritime & Coastguard Agency were great. They were very helpful and talked me through the process, letting me know the next step at each point along the process. Everything was done by email, and they were prompt and courteous. They even issued the certificate on a Sunday. Their service is a bargain at GBP 153 for five years.

[krismatski]

The best flag under current law is the Polish, Reja24 Register. One time procedure, no renewals or technical inspection required one your boat is up to 15m long (the bare hull, not LOA) and for private use. If you buy a second hand from an EU citizen the EU VAT was most likely paid. When registering, the VAT is not an issue. Email me freely

[robin767]

Hi All, I am an UK and Australia Citizen. haven't live din uk for past 20 years.

We are buying a new boat in France and plan to head to Gibraltar for a couple fo weeks, and then sail around the Med for a year before heading across to the Caribbean. We would also want some aftermarket work done to the boat in France, Spain or Greece. I was wondering the best place to register the Yacht and reading the different threads there's a lot of intelligent and experienced people here:

1. Ideally VAT woudl remain unpaid (happy to avoid the country it will be flagged in)
2. Ideally the aftermarket works would be VAT free also...

I was thinking either Poland, Gibraltar or BVI? Any feedback on those?

Much appreciated.. R