Should I register my boat in an EU country to avoid paying VAT again?

Susan Hurford paid VAT on her boat in the UK. The boat was moored in Spain at the end of the Brexit transition period and is now in Gibraltar but she wants to moor for longer than 90 days in Spain. What should she do?

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Should I register my boat in an EU country to avoid paying VAT again?

We have a UK-registered boat and are planning to sail the Mediterranean, but it would appear that Brexit/Schengen could be an issue.

Someone suggested re-registering to a Polish flag as you’re able to sail anywhere around the Med. We are unsure.

What would the pros and cons be? We are resident in Spain.

Our VAT has been paid in the UK and we were moored in a Spanish EU marina just before and during Brexit D-day.

We are at present moored in Gibraltar and would like to go back to a Spanish marina but are worried about the Schengen issue and taxes the Spanish would hit us with if we stayed longer than the 90-day Schengen time limit.

Susan Hurford

The Royal Yachting Association (RYA) Cruising Team responds:

As you’re resident in Spain, the situation is different for you than for a boat owner who is resident in the UK.

On return to the customs territory of the EU after leaving Gibraltar, the boat will need to be eligible for a relief, such as EU Returned Goods Relief, otherwise import VAT and duty will become due on arrival in the EU.

An EU Commission Note on Means of Transport details different scenarios that you may find useful.

In particular, the note confirms that: “The flag, plate or any other means of registration of the means of transport is irrelevant to determine the customs status to means of transport, except in the case of motorised road vehicles…”

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The Schengen Area relates to people and immigration rather than the customs status of the boat.

We explain this on the Entry & Exit page of the RYA website. (www.rya.org.uk/knowledge/abroad/entry-exit-formalities)

If you re-register, the boat will be subject to the legislation of its new country of registration. That could entail having that country’s evidence of competence (which might involve a test in the country’s language), compulsory carriage of equipment etc and it can also impact where you can buy your boat insurance.

Careful consideration of all the implications should be given to changing a boat’s registration.

Our VAT Guide for Boats (www.rya.org.uk/knowledge/buying-owning/vat), available to RYA members, includes general information relating to customs and VAT status – it also outlines the criteria for EU Returned Goods Relief.

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