What is the general rule about EU VAT and yachts with EU Registry?
All yachts sailing within EU waters with EU registry should be EU VAT paid unless the owner is able to qualify for a customs relief such as the operation of the yacht or boat for genuine commercial purposes.
It means that EU citizens including citizens with an EU residence permit or third country nationals with yacht or boat registered-flagged in EU will need to have VAT paid for their yacht or boat in order to sail in European territorial waters or mooring their yacht or boat in European marinas or ports.
The rules are very clear and a boat belonging to a EU citizen, or flying the flag of a EU country regardless of whether he is a citizen of the EU or not, must be VAT paid. This means that both in home waters and when sailing between any EU countries, such boats should carry evidence of VAT payment. This could be the original boat builder’s receipt or paid invoice, or some other original document showing clearly that VAT has been paid. Those who are exempt from this rule must have on board a document issued by customs or the relevant authority stating the reasons for such exemption.
In case the VAT has not been paid, there are penalties for the ownership (company’s directors and managers or individual persons), crew and body of yacht (sequestration / withholding) that differ from country to country as well as the percentage of VAT that should be applied.
For any questions you may have, please contact the relevant employee of our company and he/she will assist you.
Our office cooperates with specialized accountants in the EU as well as well known consulting companies in maritime business.