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The Brexit Impact On The Med Fleet

posted by Darryl Sharman

The Brexit Impact On The Med Fleet

There has been much discussion within superyacht circles on the VAT status of yachts post Brexit and equally there has been and continues to be a degree of uncertainty following Brexit.

Here we will look at typical scenarios relating to yachts operating in EU waters and provide our latest understanding of the current position.

The position relating to UK based yachts or yachts, returning to the UK is covered in our previous article found here Time to Dust Off the Q Flag

 

EU VAT Paid Yacht

A yacht currently in free circulation in the EU, lying in the EU and having previously paid VAT in one of the remaining EU member states will continue to be treated as a yacht in free circulation. If the yacht is registered under a non-EU flag (which now includes UK flag) the usual return goods relief* application should be filed prior to leaving the EU with intent to return – for example when spending the winter in the Caribbean.

 

Yacht VAT Paid Through The UK

A yacht in free circulation in the EU having paid VAT in the UK pre-Brexit should continue to be considered in free circulation in the EU provided the yacht was lying in the EU on 31st December 2020.

If a yacht having paid VAT in the UK pre-Brexit, but having left the EU prior to 31st December 2020 with an intent to return and having filed for return goods relief* prior to EU departure, should be able to return to the EU and remain in free circulation. An application for return goods relief is subject to interpretation by the member state of departure and may not always be available.

 

*Under return goods relief, to retain in free circulation status, the yacht in question must return to the EU within 3 years and under the same status as it left – i.e. same ownership and flag.

 

UK VAT Paid Yacht Based Outside Of The EU And UK

A yacht previously in free circulation in the EU, but lying outside of the EU and having paid VAT in the UK pre-Brexit, which then returns to the EU will not assume its previous in free circulation status unless return goods relief was applied for prior to EU departure.

For a private use yacht falling into this category, operation in the EU under temporary admission may be an option.

The above outlines the common scenarios and reflects our understanding of the current position. We expect further clarity in the coming months. Each client’s situation will be slightly different and can be subject to interpretation by the authorities of the member state in which the yacht is based.

In all cases clients should contact us to discuss their specific circumstances.

Sarnia are committed to providing an all-encompassing corporate and yacht management service, including managing VAT, so should you wish to discuss any aspect of Brexit or indeed anything else relating to your yacht ownership or operation, then please feel free to contact us on +44 (0)23 8212 6400

All details are correct at the time of publishing.

If you would like to discuss any matters surrounding your current or future plans then please get in touch.