U.S. Citizen buying a boat in Europe

  • 17 Oct 2018 02:57
    Reply # 6761743 on 6718664

    Hi,

     I spent 3 months in Europe this year looking at boats and considering this question.  I found a boat I wanted to buy in Turkey, excluding VAT.  I learned that you can keep a boat, regrardless of the flag it is flying,  without VAT anywhere in the EU for 18 months, then you have to check out of that country and then check back in to another country to be able to keep it again for 18 months without VAT.   This works only for non-European residents and citizens.  Some countries have temporary resident visas and nobody (including brokers) seems to know if they are exempt as well.  I saw US flagged vessels in Spain, Greece and Turkey and the flag doesn't impact the VAT issue, just the status of the owner and the person using the boat.  Previously boat owners could "escape" to Croatia or Turkey after 90 days, but Turkey seems risky these days and I was told Croatia will be joining the Schengen by next year. 

       Some cruisers told me "oh don't worry about it, they never check".  However, I found news articles where France and Spain had impounded boats that had not paid VAT when it was determined that the owners were supposed to have paid it.  That applied to British and European residents, but I also was told that enforcement is unpredictable and sometimes hard to prove that you are not a de-facto resident even when your passport proves otherwise.  Several cruisers said in a blog that that they had documents from the Spanish government proving they were not residents but were threatened with heavy fines if they didn't pay an additional Spanish tax on yachts that is supposed to apply to residents.

      I considered cruising in the Med for one season and then moving off to Algeria and then to the Canaries (also Schengen) before crossing the Atlantic to the Caribbean.  Not being an experienced sailor I don't think I'd gain enough experience in one season to attempt that.  Besides that I didn't want to buy a blue water cruiser, I wanted a lighter smaller boat that would cost less to keep in the Med. 

      I didn't buy a boat in the Med because as a non-European resident I can only stay in the Schengen area (Europe) for 90 days out of 180.  I don't want to try to stay during the winter so that effectively means that I could sail there for only 90 days per year.  I considered trying to become a resident in France or Spain so began looking for a VAT paid boat.  I didn't find one and was overwhelmed by the bureaucracy involved in applying for residency.  Among other things, you need to have a physical address and go back to the US to apply for a visa before you can even apply for residency.  I finally gave up and am now I'm back to looking locally and in the Caribbean. 

    Hope this helps!  Contact me directly if you want additional details.

      

    Last modified: 17 Oct 2018 04:11 | Anonymous member
  • 13 Oct 2018 01:20
    Reply # 6720225 on 6718664

    Thanks David!

    I will give The USCG a call on Monday morning and see what they have to say.

    best,


    Jonny

  • 12 Oct 2018 08:26
    Reply # 6719091 on 6718664

    Jonny,

    In many, probably most, countries, you have to be able to prove residency or citizenship to register a vessel. Some countries make a business out of registering vessels for non-residents, but there are expenses and difficulties that mean it's not a good option for lower cost vessels, it's more for superyachts that are looking for a less regulated and taxed environment in which to operate. I'd investigate USCG registration in the first place.

    A boat bought in the EU should be VAT-paid, but yes, best to check if you intend to keep it in the EU indefinitely. You shouldn't be liable for VAT on your purchase of a vessel (if the vendor is VAT registered) if you intend take it out of the EU, but this is an extremely complex matter. Best to ask the broker, if you buy through one.

    Boats that have been professionally built since 1998, or built with some professional involvement, will carry a plate stating the RCD Category (A, B, C or D), max number of crew, max payload etc. Older boats, and wholly amateur built boats are exempt.

  • 11 Oct 2018 23:03
    Message # 6718664

    Hi everyone!

    I was wondering if I could bug you all for some advice and info?

    I've been hustling away for the past year , and am heading over to Europe next month for some work AND to check out a few boats.

    I'm aware of the VAT ...and that any boat should show proof of VAT paid , but are there any other things I should be aware of? That is ...as an American buying a European flagged vessel.

    Will I be able to register it in a foreign country? Or ...is it wiser for me to Document with the U.S. Coast Guard?

    thanks!


    Jonny

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