Where to flag without having to pay VAT/tax?

[Anders]

Originally Posted by blubaju

Many posts here, some right, some wrong, some missing.

For EU citizen it is illegal to sail in EU Waters on a EU registered vessel without VAT paid, no grace period

EU residents can't sail a non VAT boat in the EU. EU citizens not residents in the EU can sail a non EU VAT paid boat in the EU with the temporary import.

[goboatingnow]

Originally Posted by Anders

EU residents can't sail a non VAT boat in the EU. EU citizens not residents in the EU can sail a non EU VAT paid boat in the EU with the temporary import.

Correct, vat implications are a function of the vessels location , and the residency of the beneficial owner. The citizenship and flag are iirrelevant.

[AcroPilot]

Hi Guilherme,

I’m a Canadian resident and recently bought a boat in Holland, which is now in Portugal for the winter. My problem was insurance, I could only get insurance from companies in which the boat was registered. I couldn’t register the boat in Canada and get insurance to sail anywhere but Canada. Apparently a COVID issue. I ended up registering the boat in Jersey and now have insurance to sail anywhere. Also Jersey has tax advantages, but since my boat was VAT paid I don’t have that problem.
I hope this info is of some help,
Peter.

[LifesBetterWhenYoureBeating]

Originally Posted by AcroPilot

Hi Guilherme,

I’m a Canadian resident and recently bought a boat in Holland, which is now in Portugal for the winter. My problem was insurance, I could only get insurance from companies in which the boat was registered. I couldn’t register the boat in Canada and get insurance to sail anywhere but Canada. Apparently a COVID issue. I ended up registering the boat in Jersey and now have insurance to sail anywhere. Also Jersey has tax advantages, but since my boat was VAT paid I don’t have that problem.
I hope this info is of some help,
Peter.

Care to share which insurance agent you used to get yours? The ones I've contacted were only able to offer me quotes if I limited my sailing to specific areas

[Joh.Ghurt]

Originally Posted by gsalgado

Care to share which insurance agent you used to get yours? The ones I've contacted were only able to offer me quotes if I limited my sailing to specific areas

That's very common in Europe and often reduces the costs. I for one am insured at the moment only for the Mediterranean and other European coasts, but this excludes some parts of North-Africa like Algeria. Morocco and Tunisia are fine, Libya isn't. Same in the middle east, where Turkey is covered, Syria isn't. Think about what you really need in the next year and save some money.

[AcroPilot]

My cruising ground is limited but can be expanded to anywhere for further costs, it's not cheap! When I bought my first sailboat some 50 years ago I never even bothered with insurance, there was no VAT and life was good. Been down hill ever since!

This is the insurance company I use.

Gallagher
Michele Faria
Client Solutions Manager, Skippers’ Plan
D 905.305.5940
TF 800.661.7211 Ext #5940
michele_faria@ajg.com

[goboatingnow]

Originally Posted by AcroPilot

Hi Guilherme,



I’m a Canadian resident and recently bought a boat in Holland, which is now in Portugal for the winter. My problem was insurance, I could only get insurance from companies in which the boat was registered. I couldn’t register the boat in Canada and get insurance to sail anywhere but Canada. Apparently a COVID issue. I ended up registering the boat in Jersey and now have insurance to sail anywhere. Also Jersey has tax advantages, but since my boat was VAT paid I don’t have that problem.

I hope this info is of some help,

Peter.

Just be careful with a Channel island Reg in Europe. It tends to attract the attention of customs officers when it was part of the customs union ( a peculiar part )

Remember as a non EU resident you cannot avail of RGR so technically if the yacht ever leaves EU territorial waters she instantly looses her vat paid status.

[AcroPilot]

Goboatingnow, thx for your advice. Since I'm not a European resident I can only stay for 90 days and I was planning to go to Morocco for a while. Never knew about the boat loosing VAT paid status, thx again for the advice.

Why is everything so darn complicated?!

[Dockhead]

Originally Posted by goboatingnow

Company doesn’t protect you. The term “ beneficial owner “ is used in the directive.

Indeed. And it's worse than that -- even having EU residents on board can be enough to trigger VAT problems.

Bottom line -- if you are an EU tax resident, you can't sail a non-VAT paid vessel in EU waters, whatever the registry.

If you never enter EU waters, you are fine. As to which registry, I don't know the practice in other countries, but UK registry is not interested in VAT documents. Not EU already of course but still. UK flag is a good one with very simple procedures (other than the tonnage survey) and now a long list of citizens of what countries can use it without needing a UK company.

And if you do need a UK company, this can be set up in about 10 minutes online.

[Dockhead]

Originally Posted by goboatingnow

Just be careful with a Channel island Reg in Europe. It tends to attract the attention of customs officers when it was part of the customs union ( a peculiar part )

Remember as a non EU resident you cannot avail of RGR so technically if the yacht ever leaves EU territorial waters she instantly looses her vat paid status.

Already lost if the boat is bought and sold outside of EU waters.


But where do you get that the boat loses VAT status by leaving EU waters? Reference for that? Never heard anything like that before, only that you can't transfer ownership outside of EU waters.


You don't need RGR to "restore" VAT status which is not lost in the first place. RGR is for returning residents, but boats leave EU waters and come back into them all the time without the owners claiming returning resident status. I don't think this is right, but will be happy to be corrected/educated if it is.

[goboatingnow]

Originally Posted by Dockhead

Already lost if the boat is bought and sold outside of EU waters.


But where do you get that the boat loses VAT status by leaving EU waters? Reference for that? Never heard anything like that before, only that you can't transfer ownership outside of EU waters.


You don't need RGR to "restore" VAT status which is not lost in the first place. RGR is for returning residents, but boats leave EU waters and come back into them all the time without the owners claiming returning resident status. I don't think this is right, but will be happy to be corrected/educated if it is.

Anytime any goods leaves the custom union it is exported whether informally or not. Every time it renters the customs union it is imported ( or Re imported ). Eu tax residents are automatically entitled to RGR ( returned goods relief ) this is normally a three year exemption to vat on import but can be extended further. Such goods must have been in free circulation within the EU to claim the exemption. No specific paperwork is required but for longer periods an ATA carnet is useful.

The custom union begins and end at the territorial waters of the EU. ( with some exceptions )

RGR only applies to goods. From TVs to boats

Hence a vessel with EU vat paid removed from the EU for 4 years even remaining within the same owner is liable again for VAT if it returns.

The difficulty for customs agents can be proving the yacht was outside the EU so compliance is rare.

The U.K. is currently doing the same to U.K. boats that were in the eu vat paid, ( any such vat plus uk vat paid) but has extended a concession to the end of this year. This has lead to a raft of U.K. boats leaving Greece this year to avoid paying uk vat again on return to the U.K. , HMRC has confirmed vat will be due on such boats returning after 1st Jan 2022

As you say vat status ( there is really no such thing ) is lost if the goods change hands outside the EU. No exception period is allowed in this case.

[goboatingnow]

Originally Posted by Dockhead

Indeed. And it's worse than that -- even having EU residents on board can be enough to trigger VAT problems.

Bottom line -- if you are an EU tax resident, you can't sail a non-VAT paid vessel in EU waters, whatever the registry.

If you never enter EU waters, you are fine. As to which registry, I don't know the practice in other countries, but UK registry is not interested in VAT documents. Not EU already of course but still. UK flag is a good one with very simple procedures (other than the tonnage survey) and now a long list of citizens of what countries can use it without needing a UK company.

And if you do need a UK company, this can be set up in about 10 minutes online.

I would not recommend U.K. part 1 registration for yachts with EU vat paid status now that the U.K. is outside the EU. The polish registration is better and faster to acquire . If you have good documentation the Irish registry is available to EEA citizens, is reasonable (€200) and can be carried out in English without any agent. A tonnage survey is needed and the process takes about 4 months in total. It is however a Gold standard full merchant ship registration

Dutch light registration is now problematic and best avoided , full Dutch registration is expensive. Other EU registries have good quality pleasure registrations but are limited to local residents and for example in France require original vat invoices.

[goboatingnow]

Originally Posted by blubaju

Many posts here, some right, some wrong, some missing.

For EU citizen it is illegal to sail in EU Waters on a EU registered vessel without VAT paid, no grace period

VAt you pay in your country of residence or first port of entry, there are landlocked EU members, no way to sail there.

For registration you will need a CE certificate or proof of being homebuild. Further you will need a pollution conformity certificate from your engine supplier. Guess why I know this, I went through this procedure.

Cost of registration and validity varies extremely, some like my one only registers residents, some everyone. Forgot, you may register in EU anytime without the yacht being in EU, then no VAT to pay. VAT is due when you enter EU Waters.

My case, boat build in Philippines 10 years ago, registered in Austria, renewal 10 years, no tax paid, radio license Austria, no survey needed

Information is from 2010, legal requirements change occasionally

Fair winds & following seas!

This post contains some misleading information

It is NOT illegal to sail in EU waters as a EU resident in a non vat paid boat. It is illegal ( under many ) circumstances to OWN a non vat paid boat . Otherwise it would be illegal to step aboard a charter or sail training boat.

A new boat ( less then 100 nM or X hours ) is classed as a new means of transport (NMT) .In this case VAT must be paid in the intended destination country not the first eu port of call.

For second hand boats vat can be paid in any EU country and is usually done in the first port of call ( choose wisely ). It is possible to agree with your customs authority to pay vat in your home country and carry such authority to show other customs officials. Typically the document outlines the route home and any ports of call along the way.

Every boat imported into the EU effectively requires a CE certificate to show it confirms with the RCD . Home built these days typically uses the post construction approvals process

[Dockhead]

Originally Posted by goboatingnow

Anytime any goods leaves the custom union it is exported whether informally or not. Every time it renters the customs union it is imported ( or Re imported ). Eu tax residents are automatically entitled to RGR ( returned goods relief ) this is normally a three year exemption to vat on import but can be extended further. Such goods must have been in free circulation within the EU to claim the exemption. No specific paperwork is required but for longer periods an ATA carnet is useful.

The custom union begins and end at the territorial waters of the EU. ( with some exceptions )

RGR only applies to goods. From TVs to boats

Hence a vessel with EU vat paid removed from the EU for 4 years even remaining within the same owner is liable again for VAT if it returns.

The difficulty for customs agents can be proving the yacht was outside the EU so compliance is rare.

The U.K. is currently doing the same to U.K. boats that were in the eu vat paid, ( any such vat plus uk vat paid) but has extended a concession to the end of this year. This has lead to a raft of U.K. boats leaving Greece this year to avoid paying uk vat again on return to the U.K. , HMRC has confirmed vat will be due on such boats returning after 1st Jan 2022

As you say vat status ( there is really no such thing ) is lost if the goods change hands outside the EU. No exception period is allowed in this case.

Only EU residents are entitled to RGR?


This was what I was able to find on the subject:


https://www.pkf-francisclark.co.uk/b...leasure-craft/


They say "Residency, flagging and location of ownership does not impact on or dictate eligibility for RGR."


These threads are incredibly useful; I learn something new every time we have another discussion.


The really useful thing I learned is that it might be possible for my boat to have dual VAT paid status which is technically impossible but apparently practically possible. My UK VAT paid and UK flagged boat was in Denmark on Brexit day so is deemed EU VAT paid. But it looks like if I bring her to the UK prior to June 2022, I can claim RGR in the UK. There does not appear to be a mechanism for cancellation of VAT paid status in the EU as a result. I will have two different sets of documents. Might be useful if I ever sell her.