VAT, non-EU resident, vessel registry, and insurance...

[Roleur]

We've hit an interesting snag buying a boat in the UK.  We are US residents, so nobody expects us to pay VAT as the boat will leave the EU within the required time.  The puzzle though is insurance.  We cannot for the life of us find insurance for a US registered boat in the EU.  We have literally spent more time on this than the entire boat buying process and have come up emtpy.  But apparently if we register the boat in the EU then insurance is no problem.  What I can't then figure out, is does registering the boat in the EU have any impact on the VAT rules?  We are not trying to trick the system here, we are simply trying not to pay VAT, which we shouldn't need to pay as US residents, and get insurance.  That's it.  

All of the searches concern EU residents and VAT.  

It seems the insurance market has dramatically changed recently and as best I can tell the internet hasn't caught up with this reality.  

Anyone have a suggestions on where to look?  Insurance brokers just say register in the EU (Poland!), but don't know anything about how that might affect VAT status.  

 

[hump101]

UK is no longer in the EU, so you need to meet the UK VAT exemption requirements, not the EU, and also be careful if you sail from UK via the EU as you will be importing your boat when you enter, so make sure you have the necessary paperwork to avoid being charged VAT in the EU country you enter.

Insurance-wise, what about a US insurer? What do other US cruisers in Europe do? When I bought my boat I was offered insurance from a Russian company (forgotten the name) via a local broker, which sounded dodgy but I was assured by several local sailors that they were legit and honoured claims.

 

[LeoV]

Registering in Poland as Non EU citizen is not possible, so you need first to set up a company like a UK LTD.

https://www.ionianyachtsales.com/yacht-registration/polish-eu-registration/

 

[Bilge Boy]

Interesting and potentially complex topic as Brexit is the first thing you need to get through. Also your statement that you shouldn't have to pay VAT as you are US residents sounds more hopeful than based on having been determined through the hard analysis of all relevant rules (but I can't claim to be expert either!)

First part which may help is getting out of UK - https://www.gov.uk/guidance/sailaway-boats-supplied-for-export-outside-the-eu-notice-7032

There is also some useful info from perspective of importing from UK to EU on the Irish Sailing website- https://www.sailing.ie/Cruising/Brexit#1738

An interesting point is that there might be duty to be paid on importing to the EU depending on vessel size.

There may also be questions on how long the vessel will be in the EU which will affect whether exemptions apply.

Summary - just because you are from the US doesn't mean you can buy and keep boats in the EU without paying VAT. But having a company structure for ownership might give options, but could force that company into vat registration and reporting etc.

 

[Roleur]

We aren't planning to keep the boat in the UK/EU for longer than 6 months, but it is winter right now and we can't very well leave Europe yet.  Trouble is we can't get insurance even for this short period before we can get the boat to the US/out of the UK/EU.  As mentioned, we are not trying to trick the system here.  We legitimately are not obligated to pay VAT, but I don't know if registering the boat in the UK or EU changes that.

 

[slug zitski]

We've hit an interesting snag buying a boat in the UK.  We are US residents, so nobody expects us to pay VAT as the boat will leave the EU within the required time.  The puzzle though is insurance.  We cannot for the life of us find insurance for a US registered boat in the EU.  We have literally spent more time on this than the entire boat buying process and have come up emtpy.  But apparently if we register the boat in the EU then insurance is no problem.  What I can't then figure out, is does registering the boat in the EU have any impact on the VAT rules?  We are not trying to trick the system here, we are simply trying not to pay VAT, which we shouldn't need to pay as US residents, and get insurance.  That's it.  

All of the searches concern EU residents and VAT.  

It seems the insurance market has dramatically changed recently and as best I can tell the internet hasn't caught up with this reality.  

Anyone have a suggestions on where to look?  Insurance brokers just say register in the EU (Poland!), but don't know anything about how that might affect VAT status.  

Yah , insurance companies won’t touch Americans 

choose a different flag and set up a postbox for your insurance address 

talk to a specialist like https://oceanskies.com/yachts/yacht-registration

 

[hdra]

We were able to get insurance (bought a French boat in France, reflagged to US before it left France) through Bluewater insurance (https://bluewaterins.com) in Florida, but that was back before the most recent spate of hurricanes  The options for insurers who would cover us on that boat have gotten much slimmer in the last two years.  Might also be worth checking with Richard Power at Fastnet (fastnet-marine.co.uk) - at the time they could insure a US-flagged boat in the UK/Europe if the vessel was domiciled in Delaware, and he has been very knowledgeable and helpful to us for a boat we work on that is Cayman flagged.

 

[Bilge Boy]

That openskies link has good info on their site. From what they say, anyone anywhere can avail of the polish registry. And as long as you prove ownership, you can temporarily import to the EU - which seems to be independent of registry. And you can use in EU for up to 18 months, or in some cases 24 months without becoming VAT liable. All assuming proper paperwork and procedures followed- which is clearly what you seek to do. But definitely sounds like an agent/broker like this is going to be invaluable. Just remember you have to get out of UK, get into EU, and onwards - there are several paperwork hops here if temporarily registering in EU. Good luck with it!

 

[Roleur]

We were able to get insurance (bought a French boat in France, reflagged to US before it left France) through Bluewater insurance (https://bluewaterins.com) in Florida, but that was back before the most recent spate of hurricanes  The options for insurers who would cover us on that boat have gotten much slimmer in the last two years.  Might also be worth checking with Richard Power at Fastnet (fastnet-marine.co.uk) - at the time they could insure a US-flagged boat in the UK/Europe if the vessel was domiciled in Delaware, and he has been very knowledgeable and helpful to us for a boat we work on that is Cayman flagged.

Richard is one of the people we've spoken to.  

 

[Zonker]

I think keep talking to US insurers for a US registered boat. I'm surprised - lots of US registered boats cruise in Europe. Can't be impossible. 

But I agree, talking to EU insurers would be useless. 

https://www.novamarinsurance.com/ specialize in US boats in Mexico but they covered us across the Pacific.
 

 

[Panoramix]

We aren't planning to keep the boat in the UK/EU for longer than 6 months, but it is winter right now and we can't very well leave Europe yet.  Trouble is we can't get insurance even for this short period before we can get the boat to the US/out of the UK/EU.  As mentioned, we are not trying to trick the system here.  We legitimately are not obligated to pay VAT, but I don't know if registering the boat in the UK or EU changes that.

You really need to understand that the UK and the EU are now like Mexico and the USA, it is the same continent but for taxes purposes it is two completely different entities. Europe is a place (like Asia or Africa) but it isn't a legal entity. The time when you could move freely between the UK and the rest of the continent is gone, now from an EU perspective going to / coming from the UK is like going to / coming from Turkey or Russia. The legislations are diverging and there is lot of red tape.

As for "legitimately not obligated to pay VAT", that might well be true but I am sure that you have to meet some conditions and I would check. It is obvious that there are limits to this, otherwise foreigners living in the UK could have a "VAT free life". British government sites tend to be relatively exhaustive : https://www.gov.uk/

 

[LeoV]

Normally a US owner would flag it US, and insure it there.  Can sail in the EU for 18 months, no problem. Even longer with tricks, legally. US import duties apply when you enter the US.

Flag is independent of VAT.
EU VAT is important if the boat is in the EU for a long period, or if there is made money with by renting it to an EU citizen.
I can have a Dutch flagged boat that has never been in the EU nor paid VAT. But when I enter it into the EU, VAT clocks ticks.