Do you have VAT questions relating to a boat purchase?
See common questions below!
We receive many calls and chats every day in regards to VAT issues for vessels sailing in European waters.
This was already a complicated issue but since the Brexit it got even worse. In order to help our clients we have made a list of the most common VAT questions we receive and with help from the EU tax authorities we can offer you some answers.
See our detailed list below.
Do you need to EU VAT Certificate for your yacht?
We can import your vessel into the EU
If you have purchased a vessel outside the European Union and want to import it to any EU country, you will need to pay Value Added Tax (VAT) on the vessel.
Due to the open border policies in the EU, it does not matter in which country you pay VAT or in which country you plan to spend most time. We can help you pay your EU VAT by importing your vessel thru Holland.
For a small fee, we will contact the Dutch Tax department and communicate with them in order to get you an official EU VAT paid certificate.
You just need to give us some details of your vessel and we will contact them to see what it would cost you to pay your EU VAT.
BOATING VAT QUESTIONS EXPLAINED:
What determines the VAT status of the vessel?
Where the VAT has demonstrably paid by a private person in the EU.
I want to buy a boat, but I don’t want to pay the VAT, is there a way toavoid paying VAT on my boat?
If you want to avoid VAT as an EU resident, you are punishable. This with all the consequences. For example: High fine and seizure of the vessel
I am going to buy a boat, do I have to pay VAT if I am buying it with a BVI registration and continue to keep the BVI registration, I am EU citizen.
As an EU citizen you buy a good in the EU. The seller must charge and pay off the VAT, according to the rate of the country of delivery. The flag is not decisive.
Can a UK citizen use a NOT paid VAT boat in the UK waters with aMarshall/Delaware/BVI flag without having to pay VAT Tax.
Due to Brexit the UK is considered a third country. The flag is not decisive in this, but the residence of the owner is.
a)The owner must have his personal connection outside the EU;
b)The vessel must be registered outside the EU.;
c)Use in the EU is for private purposes.
Can a EU citizen use a NOT paid VAT boat in the EU waters with a Marshall/Delaware/BVI flag without having to pay VAT Tax.
No, this is even prohibited. If you are an EU resident, you must comply with the applicable VAT rules.
Which documents do I need to ask the previous owner to proof the VATPAID status of the boat
The proof that the VAT has been paid is the invoice that the supplier issues to the buyer. This invoice must meet the requirements as stated in Council directive 2010/45/EU of 13 July 2010 amending Directive 2006/112/EC on the common system of value added tax as regards the rules on invoicing.
If I set up a company outside the EU and register the boat with a non EUflag, can I avoid paying VAT, as a EU fiscal resident?
This makes you guilty of fraud. This will be blamed heavily on you because you knowingly want to avoid the VAT. As a tax resident of the EU, you must comply with the tax rules of the EU.
When I come in to EU water with a NON VAT paid vessel, what do I needto do to get the exemption of VAT?
As an EU resident, you are not exempt from VAT and must import the vessel. If you, as a non-EU resident, meet the conditions of Temporary Importation, you can invoke this scheme. You must report to Customs and after verification you will receive a permit for 18 months to stay in the EU
I have heard that you can be 18 months in EU waters without paying VAT, after 18 months what do I need to do in order to extend for another 18 months?
You always have to pay VAT in the EU on everything you buy here or for the maintenance of the vessel. If you have a Temporary Admission, you can sail freely in the EU for 18 months. After those 18 months, you must temporarily leave the EU and report to Customs again on arrival. You can then get a permit again. Provided you still meet the conditions. The total time is limited to 10 years. See: https://ec.europa.eu/taxation_customs/system/files/2018-04/rules_for_private_boats-faq_en.pdf
I am going to purchase a second hand boat, where can I check the VATstatus of my vessel or the vessel I want to purchase?
The following also applies here: The VAT proof is the invoice that has been issued to the seller. If the seller is a trader, he must issue you an invoice stating the VAT. Or a so-called margin invoice
I am going to buy a boat which is made before 1978, what is the VATstatus of vessels made before 1978, are they exempted to pay VAT?
There is no exemption for these vessels. Vessels before, in use andbuilt in the EU, on 1 January 1985, VAT is deemed to have been paidwithin the European Community. This applies to the countries thatformed the EU in 1993. For those admitted later, the term of 8 yearsfor accession applies. If major adjustments have been made, thisdoes not apply. Then the VAT status will have to be proven.
What documents can be considered as proof that the VAT has been paid,and which documents do I need to have on board in case I get stopped byEU customs or EU legal authorities.
As mentioned before: an invoice from the supplier/seller to the buyer (privat person). The so-called B2C (Bussiness to Consumer). Proof from the competent authority that can declares that the VAT has been paid and not refunded. In the Netherlands this is the National Yachts Unit in Vlissingen.
Is it considered an exportation, if I register my boat with a non EUregistration within the European Union?
a simple answer is NO. Registration is not related to the tax status. The definition for export is: “bringing Union goods outside the customs territory of the Union. Union goods leaving the customs territory of the Union should be placed under the export procedure”. You must therefore submit an export declaration.
I am a tax resident of a EU country and I am going to buy a NOT VAT paidboat in Croatia, but I am not going to use the boat in EU waters, Do Ineed to pay the VAT?
It depends. If you export the boat, an export declaration must besubmitted and signed by Customs as proof that the ship has left the EU.This allows the supplier/seller to demonstrate that the boat has beencorrectly delivered without VAT and outside the EU. Simply put: If youenter an EU Member State after export, you are bringing in a non-EUgood and therefore there is an import. You must pay the VAT on the spot.
I am buying brand new boat with VAT paid, I want to export the boat outof the EU, do I get the VAT back?
First: Why do you buy a vessel with VAT? You are going to export and use the ship outside the EU! So there is export, so 0%. No, you will not get the VAT back. The vessel was bought in an EU country, right? Do you also not pay VAT in a restaurant or when you buy a book?
In case of a second hand boat with VAT status paid, and if I export theboat, is there any VAT devolution.
Here, too, you will not receive a refund of the VAT paid. You buy thegood in the EU including VAT.
I am buying a VAT PAID boat from outside the EU and I want to registerit in the EU as I am a EU resident, do I a need to pay again VAT? If so howcan I do that?
The following also applies here: You are importing a good into the EU. SoVAT and possible customs duties have to be paid on that importation.Any taxes paid outside the EU are not taken into account.
I have paid VAT in Spain on my boat, I want sail outside of Spain but inEU waters, are other EU authorities able to check if VAT is paid in case Iget stopped.
Yes. If you are checked you must proof that the VAT has been paid inthe EU. So the invoice you received is the proof or a VAT statement ofthe competent authorities.When entering the EU, Customs is authorized to check whether you asan EU resident and entitled to the Returned Goods exemption. The countries of the EEG, like Switzerland, Iceland, Norway, Lichtensteinare they considered as EU countries regarding VAT?
These countries do not belong to the EU and are classified as “thirdcountries”, just like the current UK.