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Yacht VAT Exempt on Age

posted by Bruce Maltwood

Even though the EU was formed almost 24 years ago, there are still a large number of yachts operating within the EU under the status of VAT exempt on age.

This status is applied to yachts built before 1st January 1985 and also lying within the EU on 1 January 1993. Yachts complying with this criteria may be deemed VAT paid under the Single Market transitional arrangements.

As Austria, Finland and Sweden joined the EU later, the relevant dates for vessels in these countries are ‘in use’ before 1 January 1987 and moored in EU on 31 December 1994.

What Documents Can I Use to Evidence Age? 

There is no formal EU list of approved documents although HMRC in the UK lists the following under section 4.2:

  • Marine survey
  • Part 1 registration (UK flag)
  • Insurance documents
  • Builder’s certificate

What Documents Can I Use to Evidence Location?

There is no formal EU list of approved documents although HMRC in the UK lists the following under section 4.2:

  • Receipt for mooring
  • Receipt for harbour dues
  • Dry dock records

Can I Acquire a Certificate of Exemption?

It is no longer possible to obtain an exemption document, although HMRC did issue such a document to some owners for a short period after 1 January 1993. This is partly due to the potential loss of such a status following, for example, the sale of a yacht outside the EU which neutralises any VAT paid status the vessel may have obtained.

Can This Status be Lost? 

The status of being VAT exempt on age will be retained unless a chargeable event has taken place. Examples of a chargeable event include re-entry into the EU following an export from the EU, yacht sale outside the EU or as a result of a refit period affecting the value of the yacht.

In the absence of sufficient evidence consideration to addressing VAT on the yacht should be considered and Sarnia can assist you with this.