tax in Europe

[genesis-uno]

Hi every body, I need to know how does it work the tax in Europe.What happen when you buy a boat that has no tax, and whith one that the tax has being paid.
Thanks in advance

[paulk]

What happens is that when you take a boat that has not paid the VAT (or TVA, depending upon your language) to a country that requires it, they make you pay it when you register your boat there. There are some differences between countries, but essentially every country in Europe charges a similar tax (30% or so is common.) Transients can avoid paying the tax if they stay a limited time (which may vary by country also). If the VAT has been paid already, then its cost is included in the selling price when you buy the boat. There are other points and issues involved, but this is how I generally understand it. Cruising World had an article on this about a year or so ago, written by an American sailor who kept his boat in France and no longer qualified as a "transient" . He described the paperwork, the long waits, the bureaucratic whirlpools, and the costs in some detail.

[Zanshin]

Umm, 30% VAT is pretty hefty, as far as I know no country has that high a rate. Usually you will get around 16%.

[chris_gee]

It varies slightly. Since you are in Chile, if you are bringing it back try to get one tax unpaid, as it will be cheaper. They are often available in the med.
If you were going to be in the EEC for any length of time you would have to pay the tax unless you could show it had been paid previously.

[hellosailor]

Uno doesn't say if he's planning to bring the boat home to Chile, or keep it in the EU.

If the boat is being "exported" no VAT would be due on the sale, would it?

If it was a new boat being sold for export, the VAT would be refunded or exempted as well, I think?

[Zanshin]

Hellosailor - yes, a new sale for export would be ex-VAT, as would buying one of the many ex-VAT used boats for sale. There are still a few loopholes for getting a boat permanently into the EU without having to pay (or prove payment of) VAT but they usually involve returning expats.

Once paid you can't get it back, either

[equitiman]

I know I'm stealing this one from Camraderie (at least that is where I got the link from) but these people have a pretty good discussion of VAT on their website.

Whoosh

Bob

[genesis-uno]

Thanks to everybody, after reading whoosh article, I've a pretty good idea of what to do and what to look for when I purchase my next boat in EU. For your info I'm planing at the end of this year,to buy in the south of France a ... 42'CC ( I still don't make up my mine of the right boat) and start sailing with my wife in the Mediterranean sea., most probably that more than 18 month and eventually sail it to South America-Chile.(any comments are wellcome)

[paulk]

Found this from the RYA in England, and also checked on Zanshin's comment about 30% being a bit high. 25% is the highest VAT I found mentioned on websites run by Her Majesty's Customs Services.
This is the html version of the file http://www.rya.org.uk/NR/rdonlyres/2BBFCCEC-F469-46B6-91E9-70D0DF57F439/0/VATNEWBOATS.pdf.
G o o g l e automatically generates html versions of documents as we crawl the web.
To link to or bookmark this page, use the following url: VAT NEW BOATS: www.rya.org.uk If you are buying a new pleasure craft in the EU and intend to keep

Google is neither affiliated with the authors of this page nor responsible for its content. These search terms have been highlighted: vat rates boats Page 1 VAT
NEW BOATS:
RYA - www.rya.org.uk - Home
Updated: 20 February 2007
If you are buying a new pleasure craft in the EU and intend to keep
it in the EU, you will have to pay VAT on the purchase price. If you
are keeping the boat in the UK, the VAT due will be payable in the
UK at the current rate. Once the VAT is paid, the customer must be
issued with an original VAT certificate from the company selling the
boat. This is the document that proves the VAT status of the boat,
namely that it is VAT paid. This is probably the most common
scenario for most of our members.
The original VAT Certificate should be kept safe for the life of
the boat.
However, if you are planning on buying a boat in another EU
country, or if you intend to keep the boat in another EU Member
State, the rules are more complex and you should consult Customs
VAT Notice 728 New Means of Transport which deals with new
means of transport within the EU.
A brief outline of the rules is contained below:
Boats bought new and within the EU pay VAT at the country of
destination not the country of purchase, provided that the boat is to
be moved to another EU state within 2 months of supply.
VAT rates vary considerably throughout the EU, with some states
applying very high luxury rates to larger boats. Buyers should
check the current rates carefully.
The procedure for tax-free removal to another EU state involves the
completion and signing of a declaration to certify the boat will be
removed to another state.
For buyers wishing to pay VAT in the UK rather than the destination
state, this can be done by buying in the ordinary way in the UK, and
then delaying removal until the boat is no longer qualifies as new
under the EU tax rules. This involves keeping the boat in service in
the UK for more than 3 months, and using it under its own power or
sail for more than 100 hours. The 3 month period starts from the
delivery date to the customer. This is the date the boat enters
service.
Page 2
RYA - www.rya.org.uk - Home
Updated:20 February 2007
These rules only apply to boats over 7.5 metres in length. Smaller
boats much have the applicable VAT paid on them in the country of
purchase even if it is intended to remove immediately to another EU
state.
Please contact HM Revenue & Customs for further advice about the
procedure and paperwork that must be completed.
SAILAWAY BOAT SCHEME:
If you are planning to buy a boat in the UK but intend to keep it
permanently outside the EU, you may be able to purchase it VAT-
free using the Sailaway Boat Scheme. The scheme applies to boats
taken out of the EU under their own power, it does not apply to
boats that are exported in the normal way as cargo.
To buy a boat under this scheme, you will need to complete Form
VAT 436, which must be certified at the last point of departure from
the EU. Customs VAT Notice 703/3 Sailaway Boat Scheme (for
buyers) explains the scheme in more detail and describes the
additional procedures that you will need to follow. As the buyer,
you, or a delivery crew acting on your behalf, must:
•
Export the boat from the Community within:
o Six months of the date of delivery in the case of private
persons who are not EU residents; or
o Two months from the date of delivery in the case of
eligible EU residents; the boat must stay outside of the
VAT territory for a continuous period of at least 12
months. VAT will normally be payable if the boat is re-
imported into the EU.
In each case Customs must be notified of your departure.
For further guidance on the scheme, get yourself a copy of Notice
703/3 Sailaway Boat Scheme from Customs.
CONTACTS:
HM Revenue & Customs website address is: www.hmrc.gov.uk.
National Yacht Line: 0845 723 1110
National Advice Service: 0845 010 9000
Disclaimer:
The RYA Legal Department provides generic legal advice for
its members, affiliated clubs and RTCs. This leaflet
Page 3
RYA - www.rya.org.uk - Home
Updated:20 February 2007
represents the RYA’s interpretation of the law. It takes all
reasonable care to ensure that the information contained in
this leaflet is accurate. The RYA cannot accept responsibility
for any errors or omissions contained in this leaflet, or for
any loss caused or sustained by any person relying on it.
Before taking any specific action based on the advice in this
leaflet, members are advised to check the up to date position
and take appropriate professional advice.
mep/leaflets/VAT/New Boats