Buying a boat in Croatia vat issues - SailNet Community
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post #1 of 4 Old 03-07-2020 Thread Starter
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Buying a boat in Croatia vat issues

Just wandering,
We are planning on buying a boat in Croatia. From a charter company. The vat is not paid.
I have 2 citizenship. One is from an EU country and the other from a non EU country where I also reside. (I am not an EU resident).
Our plan is to keep the boat in Europe for few months and then decide on whether to take it back home or leave the EU for a week and then bring it back to the EU. Would I have to pay the EU vat when I buy it or is there a way to avoid it?

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post #2 of 4 Old 03-07-2020
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Re: Buying a boat in Croatia vat issues

It would depend on which country your other citizenship is. For example, if the other passport is British and you were flagging it in the UK you could be VAT free in the EU as long as the boat was in the EU at the Brexit date.

Other countries, it depends on where you want to be spending your most time.

You need to make this decision now or be ready to pay your 20% VAT.


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post #3 of 4 Old 03-07-2020
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Re: Buying a boat in Croatia vat issues

VAT will be charged upon purchasing the boat in Croatia an EU member, but will be refunded when the boat is exported out of the EU.

The boat will then be imported into the destination jurisdiction and import and other fees or taxes will be due to that jurisdiction.

Returning to the EU will then require compliance with regulations and fees dependent on any treaties between the destination jurisdiction and the EU.
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post #4 of 4 Old 03-28-2020
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Re: Buying a boat in Croatia vat issues

VAT will depend on two things:
1) Flag Registration
2) Citizenship

If you EU flag it you will owe EU VAT
If you UK flag it, you will owe UK VAT, but no EU VAT provided you export the boat from the Schengen area within 60 days. You only need to go out for one day and then the boat can return for 18 month. Your UK passport will allow you to stay in the Schengen indefinitely for now (Brexit details pending).
If you USA flag it you will be liable for state sales tax in the state you register it and a Federal customs import tax of 1.5%
If you BVI flag it, you pay no VAT or sales tax. Since you hold a UK passport you can register it in your personal name and not have to set up a corporation. BVI registration will allow you to enter the USA on a one year cruising permit (renewable) which costs $12. You can be in the Schengen area for 18 months before you need to depart for 1 day minimum to non-Schengen area.

If you go to the UK, you'll need to check on their rules because I do not know them. There may be some time restrictions since the boat would be BVI registered and you hold a UK passport. Be careful if you don't want a surprise tax bill.

You will not be charged VAT at time of purchase if you purchase for export. All EU brokers know about this process.
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