Yacht EU VAT rules are complex. And problems might not show themselves until you are years into ownership. Check our advice before proceeding!
There are a lot of people storing their EU VAT paid boats in Turkey or North Africa off-season and use those ports as their “Med Base”.
When it comes to selling the Yacht – they hire a local broker to sell the boat. All that is fine and good!
But those actions severely risk the EU VAT paid status of the Yacht
EU VAT paid yacht – checking the status.
If EU VAT is paid – make certain that the boat has DOCUMENTED being back in the EU within the last 3 years. If the yacht leaves EU waters for more than 3 years – you risk having to pay VAT again. The result is if a Yacht has not been in EU waters for 3 years and can’t prove it – it is NOT EU VAT paid. No matter what the advert or broker says.
Some people say “sailing into EU territorial waters” is enough. But it is not recommended to base your purchase decision on that weak evidence. It is the current OWNERS job to prove EU VAT paid status and best way is official stamps and logbook entries.
In SOME EU countries they do have the power to grant an exception and give the boat a VAT PAID exception certificate to “extend” the 3 years to max 5 years. But it is not usual to get, unless you have a good reason. Covid was a good reason until this year.
The place of delivery matters for a Yacht to stay EU VAT paid.
Make certain your transaction location is in an EU port. So do NOT buy a boat EU VAT paid – and take “delivery” outside of the EU. You run multiple risks at taking delivery in a different country. You might be asked afterwards to pay the local VAT, or you might be asked later to pay EU VAT again.
Ensure that where you receive your new-to-you boat is in an EU port and vessel is checked in. Backup your claim with pictures. Enable GPS location on your smartphone and take a picture of the boat in the port of transaction. Save the pictures in an easy to access location.
Into the future:
At any point of owning an EU VAT paid boat, you can be required to document VAT is paid. If there are holes in the VAT documentation – like no entry/exit stamps or logbook entries– it can get dicey!
If Customs find new things installed or complete “inside re-fit” done outside EU waters. Well even worse. Only “normal underway repair” can be done outside EU without incurring the tax person’s wrath. So, you can’t buy an old wreck – sail it to Turkey and have it fixed up completely – without risking a huge VAT claim in EU.
The Yacht EU VAT Paid checks
It is the current owner’s responsibility to prove EU VAT paid. It is not customs officers’ duty to disprove your vessel is VAT paid. The customs officer’s “initial” stance is based on boat is NOT VAT paid and it is then your job to convince them that EU VAT is paid.
Some countries are harder than others. Some countries are very “by the book”. In the “By the book” places you need all the documentation you can think of.
Remember VAT checks can be required at ANY time of boat ownership. You can have owned the boat for 10 years without problems –and suddenly a customs officer decides to do a complete VAT check on your vessel. Are you ready for that?
Maintaining your Yacht EU VAT paid status:
IF you travel a lot in and out of EU or buy an EU VAT paid boat outside of EU – you must be extra careful.
- Keep all documentation copies in a waterproof folder on the boat. The original invoice, the sales contract you signed, repair receipts and all insurance and registration papers.
- Keep an old-fashioned vessel logbook and document your journey. You children and grandchildren might enjoy it later!
- Travel to an EU country and “Check-in” officially at least every 3 years.
- Make certain you save your GPS tracks log of where the boat has been. Export them to an USB Stick occasionally and drop the stick in the waterproof folder.
- Maybe invest the $300 in a “vessel logger” that snapshots where you are every few hours.
- When you have new items installed or repaired – take pictures with dates on if done in an EU harbour.
- If you repair anything OUTSIDE of EU – get documentation for it was a required repair or service.
The better your documentation is – the better is your claim that your boat is EU VAT paid.
For more and in-depth information consult a lawyer specialised in EU Yacht VAT paid status.
You can also read some examples here from Yachting Monthly. The headline reads British VAT – but it talks about general Yacht EU VAT paid status as well.
Disclaimer – we are not lawyers nor pretend to be. The above is based on our experience and opinion. If you know better feel free to add a comment or send us your comments.
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