Yachts affected by VAT issues post-Brexit

Amongst the many doubts and uncertainties still circulaing following the UK’s withdrawal from the EU, there is much confusion surrounding the issue of the VAT status on yachts at the end of the transition period.

In order to provide answers and clarifications on VAT and customs issues post-Brexit, the International Council of Marine Industry Associations (ICOMIA), European Boating Industry (EBI), European Boating Association (EBA), British Marine (BM) and the Royal Yachting Association (RYA) decided to publish a guide on the matter for yachting companies and users.

In this guide, which has been approved and validated by the European Commission, there are key scenarios that affect boats (detailed below) on the application of VAT in different situations. These important clarifications are the result of an initiative led by the EBI together with the European Commission.


VAT issues scenario post-Brexit

Scenario

Impact on VAT Paid Status (VPS)

Scenario 1

  • GB owned/registered pleasure craft
  • In free circulation (VPS) within EU28 pre-TPE (and has supporting documentary evidence)
  • Within EU27 as at TPE

✓   EU VAT Paid Status

The boat retained EU VPS status.


Scenario 2

  • GB owned/registered pleasure craft
  • In free circulation (VPS) in EU28 pre-TPE (and has documentary evidence)
  • Within an EU27 as at TPE
  • Boat leaves EU27 (for GB or elsewhere) and then returns to the EU27

✓   RGR & EU VAT Paid Status

Boat is eligible to RGR on return to the EU27 and will have EU VPS, provided that all the conditions established in Article 203 UCC are fulfilled and, for VAT, that the boat is imported by the same person who exported it.


Scenario 3

  • EU27 owned/registered pleasure craft
  • EU28 VPS pre-TPE (and has documentary evidence)
  • In EU27 as at TPE
  • VAT paid on original new purchase in GB a number of years ago
  • Subsequent ownership and location within the EU27

✓   EU VAT Paid Status

The boat keeps its Union status and it is therefore in free circulation with EU VPS.


Scenario 4

  • GB owned/registered pleasure craft
  • Business owned
  • EU VPS before TPE
  • In EU27 as at TPE
  • Kept and used within the EU27
  • Long-term lease to individual for private use
  • GB VAT accounted for on annual lease charge

✓   EU VAT Paid Status

According to the information provided, the boat has Union status and keeps it unless the boat is taken outside the customs territory of the Union.


Scenario 5

  • GB owned/registered pleasure craft
  • Owner is ordinarily resident in GB
  • Using boat within EU27 on TA
  • Owner has an EU27 holiday property where they keep the boat moored (in their name)

✓   Temporary admission

A person is established in the customs territory of the Union if he/she fulfils the conditions established in Article 5(31) UCC. If the person is not established in the customs territory of the Union, then he/she can declare the boat for temporary admission if it has non-Union customs status.


Scenario 6

  • GB or EU27 owned/pleasure craft
  • In free circulation within EU28 pre-TPE (and has documentary evidence)
  • No evidence of having been in the EU27 previously; or
  • Ownership has changed since it was last in the EU27
  • In GB as at TPE

EU VAT Paid Status Lost

Article 203 UCC requires evidence of a previous export to the UK. The Commission guidance indicates that, in the absence of an export declaration, evidence of the previous movement of the boat to the UK is required. If the boat has never been in EU27 it is impossible to provide evidence of movement to the UK.


Scenario 7

  • EU27 owned/pleasure craft
  • In free circulation with EU28 pre-TPE (and has documentary evidence)
  • Had previously been evidenced as being within the EU27 within the last three years
  • In GB as at TPE
  • Same owner who brought it out of EU27, returned to the EU27 within three years of departure

Documentation required

Article 203 UCC requires evidence of a previous export to the UK. The Commission guidance indicates that, in the absence of an export declaration, evidence of the previous movement of the boat to the UK is required. If the boat has never been in EU27 it is impossible to provide evidence of movement to the UK.


Scenario 8

  • GB owned/pleasure craft
  • In free circulation with EU28 pre-TPE (and has documentary evidence)
  • Had previously been evidenced as being within the EU27 within the last three years
  • In GB as at TPE
  • Same owner who brought it out of EU27, returned to the EU27 within three years of departure

Documentation required

It is for the Member State to decide whether the conditions for RGR is possible (Article 203 UCC) are met. Article 203 UCC requires evidence of a previous export to the UK. The Commission guidance indicates that, in the absence of an export declaration, evidence of the previous movement of the boat to the UK is required. Member State authorities must therefore assess whether that satisfactory evidence can be provided in this scenario.


With reference to the Scenarios 7 and 8 Evolution will keep you updated on the different requirements and procedures as a proof of export demanded by every member state within the EU27.

The following acronyms are used:

TPE = The time at which the transition period ended – 31 December 2020, 23:00 UTC
VPS = VAT Paid Status: i.e. in free circulation
EU28 = EU before TPE, i.e. including UK
EU27 = EU after TPE, i.e. excluding UK
GB = England / Scotland / Wales excluding Northern Ireland
TA = Temporary Admission
RGR = Returned Goods Relief
UCC = Union Customs Code


*All information believed correct at time of publishing of the above article – 9th April 2021. Evolution holds no liability for subsequent changes made to these clarifications, the future actions of the European Commission or the actions of individual EU nations *** 

The Union Customs Code referred to within this document can be found here.


As the guide has been approved and validated by the European Commission, if any of the key scenarios presented in this guide are not applied in any designated EU country, there is the possibility to file formal complaints in front of the European Commission. This action may require clarification on the documentation requested.

For further assistance please contact us at customs@evolutionagents.com.

Post BREXIT yacht logistics between EU and UK.

Since the 1st January 2021 the United Kingdom is no longer part of the European Union and this not only affects the movement of people, but also the movement of goods.  We therefore would like to clarify the following points concerning the purchasing and transportation of goods/merchandise between the EU and the UK:

  • The UK is now referred to as a ¨third country¨ situated outside of the EU.
     
  • From now on, all goods traveling between the EU and the UK will be subject to Customs controls and payment of VAT, duties and possible inspections by customs authorities, meaning that all shipments required a commercial invoice detailing the contents, value and HS code (an international customs code).
  • For items being returned for repair, whether under warranty or not, in order to avoid paying taxes on the value of new goods we must request a temporary exportation procedure for the purpose of repair.


Instructions for goods with preferential UK/EU origin which are exempt from duties

Following the TCA (Trade & Cooperation Agreement) established on 24th December 2020 regarding rules for preferential origin, goods may be imported and exported to and from the European Union and remain exempt from the payment of duties if these goods originate in the UK or the EU.

In these cases the commercial invoice should be accompanied by a declaration including a detailed description of the goods as well as place, date, name and signature of the shipper.  If the preferential origin is not declared in the commercial invoice the merchandise may be held by Customs and it may be necessary to contact the recipient in order to obtain the proof of origin (a Certificate of Origin or commercial invoice for the goods, stamped by the Chamber of Commerce in the UK or in the EU respectively, may be required).  If the proof of origin is not provided, duties according to the standard rates will be applied.


Contact our Customs and Logistics Departments for guidance and assistance

Tel. (+34) 971 400 200

customs@evolutionagents.comlogistics@evolutionagents.com


Clara Morón – Head of Logistics Dept. at Evolution

Evolution extends services in Gibraltar

After a very challenging year we are very pleased to announce that Evolution Yacht Agents is now opening a new warehouse in Gibraltar, which is managed by our in-house Customs Department. 

With this new asset to our already existing services in the area we reinforce our position as leading yacht agency throughout Spanish territory thanks to our expertise and excellent operational know-how. 

The main objective of this added service will be to continue supporting our customers by offering fully comprehensive and professional services throughout the whole Iberian coast.

Its strategic location, on the threshold of the Atlantic Ocean and exit from the Mediterranean Sea, is without a doubt one of the reasons Gibraltar is a preferred yacht destination for both owners and crew, who often go there for clearance or after finishing their TPA process in Spain.


This new Logistics & Customs service could not arrive at a better time, as yachts will be counting on the assistance of a reliable agent to guide them through all changes incurred as BREXIT comes into force and the direct implications for yachting operational activities and logistics in Gibraltar.


Yachts heading to Gibraltar are able to benefit from its VAT free status, which translates into very competitive fueling operations, spares acquisitions, ship logistics, provisions and more.

Belén Martín, Founder and Executive Director at Evolution, states: “We are delighted to offer our existing client base and potential new clients supplementary support in Gibraltar. With so many of our clients passing through, we felt that it only made sense to extend our existing know-how to this area and find a way to offer our full range of yacht services from Concierge and Provisions to Customs and Logistics.” 

“Having our own warehouse there will allow us to strengthen the relationship with our customers and work even closer with them. Our team has a wealth of knowledge and experience that guarantees our customers peace of mind, especially as the entry into force of Brexit approaches” says Bea Alonso, Founder and Managing Director at Evolution Yacht Agents.

For further information and assistance in Gibraltar please contact  our Gibraltar Operations team.


EVOLUTION GIBRALTAR
World Trade Center
1st Floor – Unit 1.02, 6 Bayside Road
Gibraltar, GX11 1AA
Tel.  (+34) 650 220 099
gibraltar@evolutionagents.com 


Essential tips for having a TPA in Spain

TIPS  –  How to do your refit / works onboard VAT exempt?

If you are planning to undertake refit works, we can provide you, as authorized Customs Agents, an importation procedure for exemption that is called Inward Processing, in Spain “TPA”.

We can give you assistance in all the Ports no matter where you are berthed in Spain. Provide of all the assistance needed in order to proceed with VAT exemption and also all taxes affected to the repairs or to an improvement of the vessel, according to the law 2913/92 (CEE) inside EU, and in particular in Spain art. 24.1 of the VAT law.   

While you are under TPA, the boat is not using the temporary time frame allowed to non-EU vessels, so your 18 months period would be suspended as well.  We will be notifying your position to customs and you need to have in mind that you will need to notify customs if you want to change berth, do sea trials and as well declare the parts you want to move/dispose or sell.

Main and mandatory condition to close this TPA is that you must exit EU directly from your berth position after finalizing to a non-EU port for exportation of all the goods/repairs.


We know that the TPA procedure might be overwhelming and we understand the importance of having a reliable advisor who is able to guide you from the opening to the closure of the TPA for your vessel.

On this basis we are able to give you the answer to all the frequent concerns such as

  1. How much is this going to cost me?
  2. How long does it take to open a TPA?
  3. What kind of goods, works and services can be included in my vessel exemption?
  4. What are the advantages for the owner?
  5. What about if my plans change?

If you are interested or have any further questions, please do not hesitate to contact us to the following address: customs@evolutionagents.com