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VAT - Should you pay?
Value Added Tax is chargeable on boats purchased and owned by residents of the EU "VAT zone". VAT is also chargeable on vessels, irrespective of ownership, that spend more than 6 months in any calendar year cruising in EU VAT Zone waters. However, there is scope for non-EU residents to cruise EU waters VAT-free. Normally, a formal application must be made for a Temporary Importation Certificate. This permits the boat to cruise EU waters for a maximum of 18 months, as long as it owned by a non-EU resident and EU residents do not cruise aboard the Boat without the owner's representatives.
Alternatively, boats with the appropriate commercial endorsements can be chartered to residents of the EU, as long as VAT is paid on the charter fee. In a majority of cases the VAT charged would be significantly lower than VAT on the boat. For these purposes, the owner must first obtain a VAT registration number from any EU Member State, which can assist you with.
Further points:
A VAT paid yacht will encounter no difficulties in EU waters.
Pleasure yachts built pre-1985 and in EU waters on the 31st of December 1992 are treated as VAT paid. Evidence will be required to show that the vessel was in EU waters on this date.
An EU national can establish residence outside the EU VAT zone (e.g. Gibraltar) and therefore avail themselves of the Temporary Importation laws.