Vat On Boats In Spain?

Vat On Boats In Spain
Spanish Steps to Buying a Boat Buying a boat in Spain requires an understanding of many complicated tax laws. Yachting has always been viewed as a luxury activity in Spain and boats have been subjected to high taxes over the years. The current system levies a matriculation tax of 12 per cent on the value of boats.

However this is strictly only applicable to Spaniards; those who are non-tax residents in Spain can easily avoid this tax. With a mild climate and a well-protected harbor, Palma de Mallorca has always been a boating mecca.

When buying a boat in Spain we should firstly distinguish between a brand new and a second-hand yacht, where it is going to be registered and under which flag. The tax consequences are different depending on the port of registration, but for the purpose of this article we are going to suppose the boat is purchased, and registered, in Spain.

Buying a new boat A brand new boat, over 8m length, purchased in Spain and registered under the Spanish flag will be liable to VAT at 16 per cent and Matriculation tax at 12 per cent, both calculated on the value;

These taxes are not avoidable for Spaniards. However for non-residents in Spain there is a route to avoid the payment of these taxes, but it is dependent on whether the purchaser is an EU resident or from outside the EU. Under the scheme called “matricula turística”, a non-Spanish resident from another EU country will benefit from exemption on the matriculation tax, therefore avoiding the extra 12 per cent although VAT must be paid.

If the buyer is from outside the EU, the total amount (both the matriculation tax and VAT) will be exempt. The only restriction is that the boat cannot be used for more than six months in any one year in Spanish waters.

Buying a second-hand boat If the purchase is a second-hand boat it is important to formalise the transaction by drawing up a contract showing all the circumstances of the purchase, such as price, payment, inventory, etc. The Ibiza castle provides a reminder of past battles along the Spanish coastline.

This contract is considered the title of ownership and will act as a guarantee in the event of possible undetected problems with the boat;
If the transaction takes place between non-professionals, i;
no broker or agent is involved, the seller has to guarantee the boat for a period of six months;

If these problems are not detected by the buyer prior to the transaction taking place, but are detected within a six month period, the buyer can ask for a price reduction or terminate the contract. If the seller is a professional, the law establishes a minimum period of two years warranty.

It is possible to arrange to reduce the period of warranty to one year, but it is up to the broker to negotiate this with both parties. Depending on whether there is a middle man the tax liability differs.

If the seller is not a professional then there is a compulsory charge of ITP tax at a 4 per cent rate on the value of the boat, according to an official list published by the Spanish authorities. This list of boat values is published annually taking into consideration the make, year and model.

If the seller is a professional the transaction will be subject to VAT;
If the transaction takes place between two individuals, but the buyer is non resident in Spain, the transaction will be tax exempt in Spain;

 It is important to note that when a boat is taken to another EU country, VAT need not be paid again provided it can be proved that is has been paid previously. This acknowledgement document is called “hoja de asiento” issued by the Marine Administration.

Finally, it is important to note that Spain can be a tax efficient country for the introduction of new boats arriving from outside the UE considering the lower 16 per cent VAT rate than neighbouring countries.

FINANCING In Spain, compared to France or Italy, banks are not allowed to sell their commercial products such as a leasing agreement when there are tax benefits concerning VAT. However it is possible to contract these products through subsidiaries of foreign banks.

In these circumstances the buyer can benefit from reduced VAT rates along with an improved financial package;
Barcelona is a common pickup and dropoff for boat buyers thanks to its excellent travel options;

REGISTRATION Marine Administration Once the purchase of a new boat has been completed registration process is the next stage. This procedure is the responsibility of “Capitanias Maritimas”. If the vessel has the CE mark, the procedure is quite straightforward.

However we must bear in mind that it is always difficult to deal with these administrations and of course no English is spoken. For new boat registration the required documents for the registration process will be the bill of sale, the owner’s manual, proof that taxes have been paid, conformity declaration and notified body certificate for the hull and engine.

The boat also needs an MMSI code necessary for all the safety devices and navigation equipment. You also need to notify the area that you intend to cruise. For second-hand boats, the required documentation to log the change of ownership will be the contract.

This contract with the duty stamp, called ITP, is sufficient to effect this change. If the boat is to be registered in another country it will be necessary to apply for a flag deregistration in Spain. This procedure has to be done by the buyer or the seller in any of the above mentioned Capitanias Maritimas.

Registry of movable properties It is important to mention as well, that some boats might be enforced to register in the Merchant Register. This applies if the boat has been financed with a mortgage or a leasing agreement, and in this case it is compulsory.

This is to establish proof of ownership and title on the craft vis-à-vis third parties;
The charter boat ZULU enjoys a quiet night off the Spanish coast;
Sailing Licence Spaniards or permanent residents are required by law to take an exam and qualify in order to be allowed to skipper and sail a boat;

The difficulty of the exam varies depending on the type of boat we want to sail. However, non-residents, as long as they maintain this status, are allowed to obtain temporary permission granted by the Capitanias. This permission is given for a period of three months and needs to be renewed by the same Capitanias who issued the permission in the first place.

Insurance Finally a quick reference to insurance; according to the RD 607/1999 every boat over 6m length put in the water is required by law to obtain civil responsibility insurance. Not complying with this requirement involves a hefty fine if caught.

Editor’s Note: Alex Chumillas is an economist specialising on tax issues and recently participated as speaker in the Future of Super Yacht conference in Majorca. For more information contact iurismarine. com (site is in Spanish).

Do I have to pay VAT on a yacht?

Are you a prospective buyer or existing owner of a boat in the EU? Are you looking to import a vessel into an EU member state? Then the issue of VAT is an essential one to consider. Keystone’s yachting expert, Jonathan Hadley-Piggin , outlines the necessary considerations and points out the potential pitfalls.

Value Added Tax (VAT) is a tax scheme that was established by the EU;
It is a tax on what is referred to as consumption and is levied by the government of each member state;
As a consequence VAT is chargeable on boats imported into the EU and on boats purchased and owned by residents of the EU who are using their boat within the EU;

VAT is also chargeable on boats, irrespective of ownership, which spend more than 6 months in any calendar year cruising in the EU, although there is scope to enable an owner to use a yacht in the EU without being liable for VAT. EU residents should only use a vessel in the EU if it is VAT paid or deemed VAT paid (see below).

Yacht owners should be aware that each member state has a certain level of discretion as regards the interpretation, implementation, administration and enforcement of the EU legislation regarding VAT;
This can cause difficulties in interpretation and of course why different member states charge VAT at different rates;

Normally, VAT laws of the member state are enforceable by the relevant customs authority. It should be noted that the Channel Islands and Gibraltar are considered outside of the EU VAT area but the Isle of Man is. A yacht owned by an EU resident or corporate body has the right to free movement throughout the EU provided VAT has been paid on that boat in an EU country.

Please note, however, that if you spend more than 6 months in some countries you may become subject to local regulations. It is also important to ensure that whenever sailing in the EU you carry evidence of VAT payment, such as the builder’s receipt or paid invoice or a VAT certificate which some EU States provide.

Alternatively, you must keep on board the document(s) issued by Customs or other relevant authority stating the reason for any exemption.

Can you claim VAT back on a boat?

Can a Boat Lose its VAT Paid Status? – In short, yes it can. If a boat is exported or sold outside of the EU it can lose its VAT paid status. However, the vessel needs to have been outside of the EU for more than three years and changed owners for this to happen.

How much is EU VAT for boats?

What kind of VAT am I liable to pay? – Simply put, all private vessels owned by EU residents used or kept in the EU must have VAT paid. The same goes for boats in the UK. This is paid when the boat or yacht is first sold or imported. For used boat purchases, the previous owner(s) will have paid the VAT and provide the documentation.

VAT is also charged when boats cruise in the EU or UK for a prolonged period of time;
In this case, it’s up to the current owner to file and provide the correct paperwork;
VAT on boats in both the UK and EU is 20%;

This is where new Brexit boat VAT charges come into play. New boat owners run the risk of paying additional VAT on boats outside the UK when sailing into British shores. Previous EU legislation on freedom of movement meant that boat owners could travel throughout the region without any concern for VAT liability.

Boat and yacht VAT status after Brexit has changed;
Now boats and all other pleasure craft have lost their status as Union Goods;
Moving a boat from the UK to the EU and vice versa is now subject to a VAT charge;

What’s more, all boats built after 1 January 1985 should have had VAT paid by the first owner or importer, and evidence of this should come in the form of a VAT certificate or invoice. Tip: You pay VAT on where your boat is based. Don’t fall for extra charges, follow temporary importation rules to avoid penalties.

How long can I leave my boat in Spain?

Pay particular attention now because it could mean the difference between you keeping or loosing your beloved boat. – The law is very clear on this matter and it concerns you rather than your boat. The Spanish tax year runs from 1 January to 31 December.

during any Spanish tax year YOU are not allowed to spend more than 182 days in Spain, or de facto, you will be classed as a resident for tax purposes. It doesn’t matter whether you fly or sail out of the country for a while and return.

it is the total number of days that you have spent in Spain during their tax year that counts, if it amounts to more than 183 you become a resident as far as they are concerned. and if they pick on you it is down to you to PROVE that you were elsewhere.

Is there VAT on second hand boats?

Buying or selling a boat can be an exciting and daunting prospect for any recreational boater, whether you are purchasing your first boat or selling one that you have owned for years, there are a number of key factors that you should take into account.

Just like when purchasing a house, it is important not to get swept up in the romance of buying a boat and to instead look at the practical and financial implications. Unlike when buying a house however, the law does not stipulate a process for the sale and purchase of boats.

Although the process of buying or selling a boat does not have to be complicated, but there are a number of aspects that require careful consideration. When and how to sell your boat As we all witnessed during last year’s summer lockdown, the interest in getting afloat rose dramatically as the good weather increased. Advertising your boat pre-season or at the start of the boating season can be an advantageous time to begin selling your vessel. If you are looking to buy a boat, keep an eye out for adverts in local newspapers, the yachting press, websites, Facebook groups, brokerages, at local boatyards or often word-of-mouth within the boating community can also work well.

When considering purchasing a boat, you must first decide which type of boat best suits your requirements. These may range from sailboards to very large sailing or powered boats, the type and size of boat itself can make a considerable difference to the process and the price.

If you are selling your boat then choosing a fair and objective price can be a difficult task and if you are a novice purchaser then how can you tell if you are getting an accurate price? The secret to agreeing a fair price is research. Look at similar boats in the market and be honest with yourself about how much this boat is actually worth, what repairs may need to be done and most importantly if buying, what you can afford.

Whether you are the buyer or the seller, be prepared to negotiate and have a top and bottom figure in your mind. The nitty-gritty The sale of second-hand boats usually occurs between two private individuals and is often conducted via a broker, who acts as an agent for the seller.

VAT is not chargeable on the sale of second-hand boats between private individuals but VAT is charged to the seller for the services rendered by the broker. The broker will usually charge the seller a commission for these services. Prior to entering into an agreement to buy a boat, the purchaser will wish to make sure that the seller does indeed own the boat and have the right to sell it. If the boat is subject to a mortgage the RYA recommends that the purchaser discusses the process of redeeming the mortgage with both the seller and the lenders. It is often the case that the purchaser will pay the proportion of the purchase monies that are outstanding on the mortgage, direct to the lenders. The lenders may hold all the title documentation for the boat and upon redemption of the outstanding mortgage, release the title documents direct to the seller/purchaser.

Also, they will wish to ensure that the boat is not subject to any mortgages, debts, charges etc. If you are purchasing a boat then it is vital to ask to see a copy of all title documentation so that you may be confident that the seller does indeed own the boat, that the boat has domestic goods status (UK VAT paid) or is VAT exempt, and is Recreational Craft Regulations (RCR) compliant.

When selling a boat make sure that you have your paperwork together, the main documents that you are likely to be asked for include, evidence that the boat has domestic goods status (UK VAT paid), such as the original invoice and evidence that the boat was lying in the UK at the end of the Brexit transition period at 11pm UTC on 31 December 2020; registration documentation, evidence of RCD compliance, where applicable; service information for the engine, generator, sails, water heater; the Builders Certificate (not essential but helpful) and Bills of Sale; Owner’s Manual and further manuals for all the equipment on the boat; and financial records and receipts of any large repair bills.

Whilst verbal agreements between parties are perfectly valid in law, they are notoriously difficult to prove and any disagreement will come down to one party’s word against the other. For this reason, the RYA strongly recommends that a written Sale and Purchase Agreement is used on all boat purchases.

If you are a RYA member then you can access the online RYA Sale and Purchase Pack online , which includes a template Sale and Purchase Agreement template with a step-by-step guide to buying and selling boats. Practicalities The RYA also recommends that buyers have a survey carried out on a boat prior to finally agreeing the purchase, especially if the boat is second-hand and being sold privately. In most cases the only way to check the boat’s condition is to have a survey done, and the results will often determine whether a sale proceeds smoothly, has its terms renegotiated or is terminated. There is no better way to know how a boat will react when in the water than by conducting a sea-trial.

This is something that the RYA recommends and if sellers are usually agreeable to allowing a purchaser to carry out a sea-trial;
A satisfactory sea-trial is likely to reinforce the purchaser’s desire to proceed with the purchase;

If purchasing a boat, you may want to consider boat insurance, although it is not compulsory in the UK it is highly recommended and at the very least you should consider third party liability insurance. Buying and selling within the EU Following the end of the Brexit transition period the UK and EU are now separate custom territories.

The location of the boat at the end of the transition period at 11pm UTC on 31 December 2020 will have an impact on the boat’s VAT status. If you intend to purchase a boat in the EU and import it to the UK the default position is that import VAT and duty will be due on the current value of the boat at the time of import, unless you are eligible for one of the VAT relief schemes.

If you purchase a boat in the EU with the intention of keeping it within the EU you shall need to obtain and retain evidence that the boat has Union goods status (EU VAT paid) which including evidence that VAT has been paid and evidence of the boat’s location in the EU at the end of the transition period.

If the boat has been imported into the EU since the end of the transition period evidence that EU VAT has been paid will most likely be in the form of importation documents;
Additionally, if you are looking to purchase a boat within the EU and import it to the UK you shall need to make sure that the boat is compliant with the new Recreational Craft Regulations;

These have replaced the Recreational Craft Directive following the end of the Brexit transition period. From 1 January 2023, if a used vessel is imported from the EU to be placed on the UK market , a new UK Conformity Assessed (UKCA) mark in line with the requirements of the RCR will be required.

In order to obtain a UKCA mark, a boat will require a Post Construction Assessment and third-party verification;
Similar rules will apply when selling vessels into the EU;
Pre-owned CE marked vessels, which were in the UK when the Brexit transition period ended at 2300 UTC on 31 December 2020, when exported to the EU will be required to undergo a recertification of the CE mark when being placed on the EU market;

This means a boat will require a Post Construction Assessment in line with the RCD and third-party verification. Estimated costs of Post Construction Assessments and verification are between 500-5000 GBP dependent on the vessel. UK buyers/sellers are advised to ensure they include an English and Welsh (if relevant Scottish) law and jurisdiction clauses within their Sale and Purchase Agreement.

You can find further information about buying and selling boats by visiting the Legal hub pages of the RYA website: rya. org. uk. If you are a member of the RYA and have a question regarding selling or buying a boat, please get in touch with the RYA Legal team by calling: 023 8060 4223 or by email: legal@rya.

org. uk .

Can a boat lose its VAT paid status?

You may think that VAT does not affect you because you are NOT a citizen of any EU jurisdiction that charges VAT. You couldn’t be more mistaken! If you wish to retain “VAT paid status”, changes in ownership must occur in EU Waters. If the vessel is outside the EU for 3 years it will lose its VAT paid status with some possible exceptions.

When a boat is advertised as VAT paid: If you purchase a vessel in an EU jurisdiction, the first thing you need is PROOF of VAT payment, no matter where the vessel is registered, or proof that the vessel would not be subject to VAT.

You might find a vessel advertised as VAT paid, but in fact ALL of the VAT has not been paid. Often, boats are bought on lease payments and each payment removes VAT, but if the lease is not fully paid, then neither is the VAT, so be careful. When a boat is not VAT paid: A foreign flagged yacht on a cruising permit in an EU jurisdiction can be marketed for sale “No VAT” to a non-European resident or passport holder.

That is legal;
What is not legal is for the yacht that is for sale might have overstayed it’s welcome in the EU, and if that is the case, then VAT is due, or should have been due;
If you take title to a yacht that has overstayed her cruising permit, and are stopped, regardless of your citizenship or flag, you can get tagged for VAT and/or your boat seized;

Your broker, or you, should find out where the Customs Office is in that jurisdiction, make enquiries as to whether it would be subject to VAT if the vessel is sold in that jurisdiction. This could add as much as 20% to the purchase price of the vessel.

See VAT rates. If the vessel is not VAT paid and you are planning to remove the vessel from the EU, you could also arrange with the seller to move the vessel to a jurisdiction with a lower rate. Even better, you could move the vessel to Gibraltar, Turkey or Tunisia, or another non-EU entity to close the sale…or even close in international waters.

Most brokers offering a boat for sale in an EU jurisdiction will have documents to show VAT status. You also need to know how long you may cruise EU waters without becoming subject to paying VAT if the vessel has not been VAT paid. There are time limits. As personnel at each VAT office changes, interpretation of the rules change with them, as does interpretation from country to country.

The same question can be answered completely differently depending upon the party you speak to at the office of the VAT collectors. It’s confusing…so…go straight to the source…the VAT office in the jurisdiction where you will be taking delivery of your vessel, and be fully informed before taking possession of the vessel.

You don’t want to be sitting at the dock without an export document.

How do I buy a tax free yacht?

Buying the Boat in a State Without Sales Taxes – Probably the simplest way of avoiding sales taxes on a boat purchase is to buy the boat in a state that doesn’t have a sales tax. These include Montana, New Hampshire, Delaware and Oregon. Alaska also has no state sales tax, but municipal sales taxes add an average of a little under 2 percent.

This strategy is straightforward and simple in some ways, but like almost all aspects of sales tax avoidance involving boats, it’s complicated;
Ultimately, however, if you buy a boat in a state without a sales tax but keep the boat in a state that does, the state where you’re keeping the boat is going to charge you the sales tax you tried to avoid;

They may call it a “use tax” instead, but the taxed amount will be the same as the sales tax you thought you had avoided.

How can I find out if VAT has been paid on a boat?

The subject of VAT in regard to vessels of any type can be a complex issue. As an ABYA member Mark Cameron Yachts will collate all the information available for any yacht we are marketing and present the information in a clear manner to any prospective purchaser.

The purchaser must however satisfy themselves that the papers accompanying the vessel in regard to the vessels VAT and RCD status are correct. For those wishing to buy a boat privately we can provide a Yacht Conveyancing service.

This service provides an additional level of comfort for both purchasers and vendors with the use of standard ABYA contracts and our own Client Account for the transfer of monies. Below are some guidance notes on the matter of VAT in relation to vessels.

This information is provided for the purposes of guidance only and does not constitute professional advice. If in doubt you should seek further advice from a qualified body or the relevant customs authority.

Extracts from HMRC Notice 8 ‘Sailing your pleasure craft to and from the UK’ – April 2012 3. 5 Can a vessel lose its VAT paid status? VAT is due on the importation of any vessel from outside the EU. However, there are provisions for this VAT to be relieved when an EU VAT paid vessel returns to the EU, refer to sub-section 3. 1 Will I have to pay VAT on a vessel to be kept in the EU? Yes if,

you import a vessel into the EU you will have to pay VAT on the vessel’s value at the time of import; however in certain circumstances reliefs may be available for vessels imported from outside the EU

– 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 vessel in the UK, the VAT due will be payable in the UK. If you buy a new vessel in one Member State but intend to keep it in another Member State, you should consult VAT Notice 728 New Means of Transport which explains the relevant rules 4.

If an EU VAT paid vessel leaves the EU, and whilst outside the EU it is sold, the new owner will, unless eligible for one of the reliefs described in this Notice, be liable to pay VAT if the vessel is brought back into the EU.

2 What documents will be required to provide proof of the VAT status on a used vessel? EU residents should only use a vessel in the Community if it is VAT paid or ‘deemed’ VAT paid. Documentary evidence supporting this should be carried at all times as you may be asked by customs officials to provide evidence of your vessel’s VAT status, either in the UK or in other Member States. Documentary evidence might include:

Original invoice or receipt
Evidence that VAT was paid at importation
Invoices for materials used in the construction of a ‘Home-Built’ vessel

A registration document on its own does not prove the VAT status of the vessel, as there is no link in the UK between the registry of the vessel and the payment of VAT. If you have difficulty in providing the information, you should contact the VAT, Excise and Customs helpline on Telephone: 0300 200 3700. Certain vessels that were in use as private pleasure craft prior to 1 January 1985 and were in the EU on 31 December 1992, may be deemed VAT paid under the Single Market transitional arrangements. The following documents are useful to prove the age and location of the vessel: For age:

Marine survey
Part 1 Registration
Builders Certificate
Insurance documents

For location:

Receipt for mooring
Receipt for harbour dues
Dry dock records

If you are unable to provide any of the above for used vessels kept in the UK you should, whilst cruising within the EU, carry a Bill of Sale (if applicable and between two private individuals in the UK). Whilst this is not conclusive proof that VAT has been paid, it does indicate that the tax status is the responsibility of UK customs authorities. It is also advisable to contact the relevant authorities in the Member State you intend to visit, or their embassy in the UK, to confirm what documentation will be required in advance of your voyage.

As Austria, Finland and Sweden joined the EU later, the relevant dates for vessels in these countries are ‘in use’ before 1 January 1987 and moored in EU on 31 December 1994;
After this date there were no further transitional arrangements agreed by the EU Commission for subsequent EU expansions;

When buying a used pleasure craft from any VAT registered business in the EU, you should make sure that the invoice shows separately any VAT which that business has charged to you on supply of the pleasure craft. If the invoice does not show VAT separately you may have difficulty in demonstrating that VAT has been paid.

If you are buying from a business that does not charge VAT on the transaction or from a private individual in the EU and the seller states that VAT has previously been paid on the vessel, you should obtain evidence from the seller that VAT has previously been accounted for;

Further guidance notes courtesy of ABYA: Boats being used in the EU should have VAT-paid status unless they are just visiting. The original VAT invoice, from when the boat was either first bought within the EU or when it was imported from outside the EU, is usually sufficient evidence.

A boat that is VAT-paid but is sold outside the EU loses its VAT-paid status and therefore VAT must be paid if the boat is brought back into the EU;
Boats kept outside the EU for over 3 years may have to pay again (See Customs Notice 8);

The above applies to all boats built or brought into the EU since 1 January 1985, or on the joining dates of States that have become EU Members since then. Boats already in EU Member States and territories on 1 January 1985 pre-date the requirement. The evidence of VAT-paid status will generally be an invoice, showing the VAT element and a VAT number, or similar document, such as a completion statement.

Boats sold between companies should show the VAT element on the invoice. Some EU states (notably Holland) ask for the original invoice, but otherwise a certified copy kept on board should be adequate. Keep the original and a couple of certified copies safely elsewhere.

It is vital to pass this information on when the boat is sold, as it may be requested by Customs officers in either the UK or elsewhere in the EU. In the case of home-builds and fit-outs, copies of all the major invoices should be kept and passed to subsequent owners to show VAT-paid status.

Customs Notice 8 sets out further details. Please note that HMRC do not have copies of individual VAT invoices from boat builders, dealers or other boat sales transactions. Any queries should be referred to HMRCs VAT, Excise and Customs helpline – 0300 200 3700.

If they seem unsure, ask for the matter to be referred to the HMRC Unit of Expertise on Yachts. Request any advice in writing, keep it with the boat’s documentation, and pass it on to any subsequent owners.

Do you pay VAT on EU second hand goods?

Here, you can read about which rules apply when you buy second-hand articles online. All goods have a value, regardless of whether they are new or second-hand. This means that you pay customs duty and VAT even when you buy second-hand goods online. How much you pay in customs duty, VAT and any other taxes depends on, amongst other things, the value and type of your goods and which country they are being sent from.

When you order goods from a country outside the EU, you must always pay VAT. You may also have to pay customs duty and other taxes and charges. You pay customs duty if the goods are worth more than SEK 1,600.

Furthermore, your goods must always be declared in an import declaration. When the goods are being sent from another EU country, you do not have to pay customs duty, Swedish VAT or other taxes on the goods.

What does tax not paid mean when buying a boat?

Joined 25 Aug 2006 Messages 246 Location UK Buying a \’TAX NOT PAID\’ yacht via a broker Horrible of me to open up another VAT related thread I know, but needs must!! One of the boats I’m interetsed in via a large reputable south coast broker is ‘tax not paid’.

Aparently its ex charter so I’m assuming VAT is recoverable for a business and thats why the tax has not been paid. The boat in question is slightly over my budget so 1. Is there any way of conjouring a deal that committed the boat to the broker for say 6 weeks a year such that it was chartered and still therefore a business asset with VAT recoverable, to avoid paying the VAT 2.

I’m sure this is a silly Q but I am new to all of this. I’m assuming the boating world is no different to any other market with the price stated be an expectation of the seller and the actual proce settled on being a negotiation with the buyer. Assuming this is so is this like the housing market where you would come in with an offer a just a little below the asking proce or can one afford to be ‘outrageous’ with the opening bid!!! Re: Buying a \’TAX NOT PAID\’ yacht via a broker others are more expert at both these than me – but re issue 2 – you can be failry daft with the first offer: the fact that you make any offer at all marks you out as quite special. Re: Buying a \’TAX NOT PAID\’ yacht via a broker If it is Tax not paid you could take it out of the EU and not pay VAT, or buy it and pay the VAT. Even a VAT registered business has to pay the VAT, but they can claim it back at the end of the VAT quarter. When it is sold again VAT has to be accounted for once more. If you register for VAT to re-claim it, you will probably find that your accountant will recommend disallowing 90% of the VAT claim, if you only intend to charter it for 10% of the time! Of course if you are already a VAT registered individual (sole trader, or partnership if you have the blessing of other partners), or control a VAT registered company that could buy it, it could be purchased and placed in a charter program and VAT could be legitimately reclaimed.

You can always go up with offers too. Try 30% off, see what happens. Again you would have to be prepared to justify the % VAT and capital allowances claimed vs. the amount of charter use, come the day the Revenue and Customs question the level of personal use.

In short, it would only be a fully recoverable business asset in the event that it’s sole purpose was for charter work. Q2. Bid what it is worth to you. Bear in mind that if it is ex-charter it might have already had some ‘stick’. Also bear in mind that if it has reached the end of it’s useful charter life, you should be considering the price including VAT anyway as it is unlikely to be purchased by anyone with a view to further commercial purpose. Joined 23 Oct 2004 Messages 4,382 Location UK Re: Buying a \’TAX NOT PAID\’ yacht via a broker Tell the broker to reduce the price. Also. what is the inventory. add up what is included in this. eg dinghy,liferaft,tools,fenders outboard, and all other bits & pieces. Get a price and buy these seperately there will be no VAT payable on these. this will further reduce the price of the boat. Now buy the boat and pay the VAT on the boat.

In this instance the VAT status is the problem of the vendor in that they will end up selling it for it’s VAT inclusive price to a private user, but of course will have to hand over the VAT element to HMR&C.

that way you keep the VAT element as low as possible and end up with a legit VAT paid boat. Joined 13 Jun 2004 Messages 1,886 Location Anglesey Re: Buying a \’TAX NOT PAID\’ yacht via a broker Hmmm. “Tax not paid” strikes me as a weasel-worded euphemism for “VAT not included in price”. I’m no authority on VAT, but unless the charter company has a non-EU base, wouldn’t it have paid VAT on the boat and all its equipment? And wouldn’t it also be entitled to reclaim any VAT it paid on purchasing the assets that is covered by the VAT it collects on the sale of those assets (Revenue and Customs keeping the balance if the sale price exceeds the purchase price). Joined 23 Oct 2004 Messages 4,382 Location UK Re: Buying a \’TAX NOT PAID\’ yacht via a broker Not Really. when it(the company) bought the boat,it would have paid VAT at the time of purchase,and ,assuming it was registered for VAT at that point,would have reclaimed the VAT back from the “Vatman” This would include any vat paid on the equipment. ,thus it woult effectively have bought everything Vat free.

If so, it would have no burning desire to account separately for removable items like the liferaft;
This os ok until it comes to sell the boat ,if it sold to another VAT registered organisation,it would have to give them an invoice consisting of the purchase price+VAT,the new organisation could then claim back this VAT;

However a Private Individual obviously is not able to do this. The P I only needs an invoice to show that he has paid the purchase price+VAT on the boat,not the extras,so by doing a deal seperately he can artificially reduce the price of the boat,which will save him ??? EG asking price of the lot (boat+inventory).

£50,000+VAT =£58750 Say Boat=40K and gear is 10 K Therefore he now pays 40 +VAT =£47K +10K =£57K;
Re: Buying a \’TAX NOT PAID\’ yacht via a broker You are generally correct if the boat is in the UK but if it is not in the UK this changes ahd also depends where the boat is to be located and/or registered;

How long can a foreign yacht stay in the UK?

VAT after Brexit – Put simply, most UK boats, like non-EU boats are now subject to Temporary Admission (TA) when they enter the EU. Following Brexit, most EU countries will issue transit logs for UK boats This allows for a stay of 18 months (extensions for up to two years are possible) before being liable to pay EU VAT. Most countries will issue a ‘transit log’ to be kept with the vessel while it is in that country. This must be stamped on leaving the country, and a new one obtained at the new country’s port of entry. The boat’s TA clock can be restarted by exiting the EU, obtaining proof of doing so, such as a marina receipt, and then re-entering the EU.

Do fishermen pay VAT?

The supply of fish to stock fishing waters is standard-rated, not zero-rated as food. Input VAT is fully claimable on this expenditure by the trader operating the fishing activity, if the operator is registered for VAT, as a farmer usually will be.

Are boats tax deductible UK?

Can the cost of the boat be written off against tax? – The cost of a boat cannot be deducted from taxable profits where no crew or provisions are provided. The arrangement is sometimes referred to as bareboat charter. The prohibiting of tax relief on the cost of a boat is specifically stated under exclusion 6 of the Capital Allowance Act 2001.

Where the boat is being used not merely as an investment, but as a trading asset, tax relief would be available for its cost. Various case laws have established that a clear profit motive would need to be shown.

In practice, where a skipper and/or other services such as on-board catering are provided, a percentage of the original cost of the boat can be deducted each year from profits. This is known as a capital allowance. It is not possible to write of the whole cost of the assets in the same year that it is bought.

The exclusion from first year allowance is set out in section 46 of the CAA 2001;
The same law would preclude a boat from the super-deduction;
On the basis that the boat is not expected to have a useful life beyond 25 years, it will not need to be in a special rate pool;

Therefore, the rate of capital allowance at the time of writing is 18%. The percentage for a long life assets is much lower and can be found in the above link. The difference between the original cost of the boat and the capital allowances is referred to as written down value.

The scrap value in the case of a disposal, or sale value in case of a second hand sale are compared with the tax written down value;
The difference between the written down value and anything it fetches on disposal will be either written off or added back to tax;

This is referred to as a balancing allowance or balancing charge. Therefore over the life of the boat, the whole cost could be deducted from profits.

How do I buy a tax free yacht?

This strategy is straightforward and simple in some ways, but like almost all aspects of sales tax avoidance involving boats, it’s complicated;
Ultimately, however, if you buy a boat in a state without a sales tax but keep the boat in a state that does, the state where you’re keeping the boat is going to charge you the sales tax you tried to avoid;

They may call it a “use tax” instead, but the taxed amount will be the same as the sales tax you thought you had avoided.

Can a boat lose its VAT paid status?

That is legal;
What is not legal is for the yacht that is for sale might have overstayed it’s welcome in the EU, and if that is the case, then VAT is due, or should have been due;
If you take title to a yacht that has overstayed her cruising permit, and are stopped, regardless of your citizenship or flag, you can get tagged for VAT and/or your boat seized;

See VAT rates. If the vessel is not VAT paid and you are planning to remove the vessel from the EU, you could also arrange with the seller to move the vessel to a jurisdiction with a lower rate. Even better, you could move the vessel to Gibraltar, Turkey or Tunisia, or another non-EU entity to close the sale…or even close in international waters.

The same question can be answered completely differently depending upon the party you speak to at the office of the VAT collectors. It’s confusing…so…go straight to the source…the VAT office in the jurisdiction where you will be taking delivery of your vessel, and be fully informed before taking possession of the vessel.

You don’t want to be sitting at the dock without an export document.

Can I buy a boat through my business UK?

As a business owner, you may have numerous assets held through your business: cars, trucks, computers, equipment, and maybe even real estate. But have you ever wondered if your business can “own” a boat? As we’ll show, you can actually buy a boat through your business, even if it has little or nothing to do with boating. As long as you can demonstrate a legitimate purpose for the boat, you can buy it and enjoy the tax benefits of this purchase.

How much is US duty on a yacht?

When it comes to finding the yacht of your dreams, people will search far and wide, so it comes as no surprise that many boat sales take place outside of the U. While there’s nothing stopping you from bringing your new vessel home afterwards, there are three things you must have with you when you meet with Customs and Border Patrol representatives upon your arrival in the country.

They are listed and explained below;
Proof of Ownership The most common example of this required documentation is a bill of sale;
This proves that you have purchased the vessel and are therefore the legal owner, so you can document it in the U;

It is important to note that the U. Coast Guard requires that all formal documentation such as manufacturer’s statements of origin and builder certificates be formatted for use in the United States, or your vessel will not be granted federal documentation.

Evidence that the Boat Meets EPA Standards You are required to present evidence that the boat being imported meets the EPA (Environmental Protection Agency) standards covering air pollution emissions;
This includes filling out Engine Declaration Form 3520-21 , which is an attestation that the yacht’s engine performance does not compromise applicable environmental regulations;

The Required Duty Payment When you import a boat into the United States, you are generally required to pay duty. Yachts and sailboats presently have a duty rate of 1. 5% of its value. If you have questions or need assistance with importing your foreign-bought vessel into the United States, contact Howard S. We can provide vessel documentation through our Marine Documentation division, and our Customs Brokerage team will take care of the following importation requirements:

Filing Customs entry
Paying duty
Arranging any inspections or holds requested by Customs

Let us take care of the technicalities so you can enjoy your new purchase a lot sooner. Happy sailing!

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Howard S. Reeder, Inc is a family-owned business which has been in operation since 1940 when Howard S. Reeder Sr. founded our customs brokerage company and began helping importers bring products into the United States. Now on our third generation of ownership, both our company and our areas of expertise have greatly expanded over the more than 75 years since our inception. Latest posts by Howard S Reeder Inc ( see all ) –>.