Do Temporary Residents pay VAT on Boats

Lifes Challenges

New boats (and all other ‘means of transport’ – cars, airplanes, motorhomes, superyachts) sold in the EU for private use are subject to a 16% – 27% consumption tax called Value Added Tax or VAT.  The tax is levied country-by-country.  The rate of VAT depends on the country and listed here in the National VAT Rates.  Around 20% is common.  Boats used in the EU customs zone must prove prior VAT payment or pay VAT.  Boats imported, owned and used by non-EU residents under Temporary Admission rules enjoy a VAT exemption for 18 months.

The overarching detail is in the Union Customs Code and the meaty detail in Article 212 of the UCC Delegated Act

Question to Your Europe Advice

I asked the following question of the Your Europe Advice legal service:

Question: I am an Irish citizen. My husband is a third-country national. He owns a boat purchased outside the EU and brought into the EU Customs area under the Temporary Admission rules documented in the EU Uniform Customs Code. Our permanent residence is in Australia, where we have a house, adult offspring, dog, car, bank accounts and pension fund.

We travel from country to country on the boat usually staying less than 3 months in each.  Sometimes we extend our stay using Irish passport and my husband’s status as the spouse of an EU citizen. Typically we spend 9 months of the year in the EU.

We are confused by the rule in the Temporary Admission rules for the owner of the boat to not be “habitually resident in the EU”. Authorities in Greece have told us if we stay more than 6 months in Greece then the boat will be liable for VAT. Could you provide a reference that explains how this habitual residence is defined please?  Read More

Questions and Answers from the Web

Question: Does the VAT rule also apply to temporary EU residents?  Read More

Question: Does the 183 day tax residency rule apply to all persons regardless of their citizenship, habitual residency or visa-waiver status? For example, if I was habitually resident in Australia with lots of evidence to support that assessment and stayed in Italy for 9 months legally, under an Irish passport, would I then become a tax resident of Italy?  Read More

Question:  Is the Customs zone the same as the Schengen zone?  Read More

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