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VAT and customs on a yacht: what applies when you cruise outside the EU?
Short answer
Take your yacht out of the EU and bring it back,
and you need proof that VAT and duty on it have been paid.
Without proof of VAT paid status, customs can charge import VAT and duty when the yacht comes back.
For a yacht kept in the EU by an owner resident in the EU, the starting point is simple: it must have VAT paid status in the customs territory of the Union, in other words be Union goods. Buy a new yacht from a dealer in the EU and the invoice showing VAT does the job. It gets harder with a second hand boat bought privately, a boat bought outside the EU, or an older yacht whose purchase papers have gone missing. Then it can be difficult to show that VAT and duty were ever paid.
This matters once you cruise outside the EU, to the Caribbean, Norway, Turkey or Switzerland for example. When the yacht comes back into the EU it can usually be re-imported free of VAT and duty under Returned Goods Relief, provided it returns within three years, unaltered, and its status can be proved. Without that proof, customs can ask for import VAT and duty, and VAT on the value of a yacht is a serious sum. Owners resident outside the EU, which since Brexit includes UK residents, can usually keep their yacht in the EU under Temporary Admission without paying VAT or duty, normally for up to 18 months.
Before you leave, put together a folder: the bill of sale or invoice showing VAT, proof of any earlier customs clearance, registration papers and, if you have one, a confirmation from customs. Have your departure from the EU recorded when you clear out, and settle any open questions with customs beforehand, in the UK with HMRC and in the EU with the customs authority of the country where you will re-enter. The rules have exceptions and they change; only the customs authority can give you a binding answer. For the insurance, the cruising area is what counts, so check that your policy covers every country on the route and does not tie the boat to a berth inside the EU. The papers you gather for customs also help prove value and ownership after a claim.
Worth remembering
Proof on board
invoice showing VAT paid
No proof
import VAT and duty possible on return
The customs folder gets packed before you leave, not after.
Questions
What owners ask us about this
What happens when I bring my yacht back into the EU?
It can usually be re-imported free of VAT and duty under Returned Goods Relief, provided it comes back within three years, unaltered, and its VAT paid status as Union goods can be proved.
How do I prove that VAT has been paid on my yacht?
With the invoice showing VAT, or with proof of an earlier customs clearance. If you have neither, ask customs before you set off, not on your return.
How long can a yacht from outside the EU stay in the EU?
Owners resident outside the EU can usually keep their yacht there under Temporary Admission for up to 18 months without paying VAT or duty. Only the customs authority gives a binding answer.
Related
Not sure whether you qualify?
Whether it is “VAT and customs on a yacht: what applies when you cruise outside the EU?” or another question: send us your residence and the flag your boat flies. You will get a straight answer in one email; including a no, if that is the answer.
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