Yacht VAT Exempt on Age

Even though the EU was formed nearly 30 years ago, there are still several 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 lying within the EU on 1 January 1993. Yachts complying with this criterion 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 the following could be used:

• Marine survey
• Flag registration
• Insurance documents
• Builder’s certificate

What Documents Can I Use to Evidence Location?

There is no formal EU list of approved documents although the following could be used:

• 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 in the UK 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 in the EU 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 because of a refit period affecting the value of the yacht.

Please note that this article is intended to provide a general overview of the matters to which it relates. It is not intended as professional advice and should not be relied upon as such. Any engagement in respect of our professional services is subject to our standard terms and conditions of business and the provision of all necessary due diligence. © Praxis 2023