AT and Yachts in the EU
Understanding VAT rules is essential for yacht owners navigating EU waters. The key concept is VAT Paid Status (VPS), which means VAT has been correctly paid (or deemed paid) on a vessel. EU Customs require owners to be able to demonstrate VPS at any time.
Residency, Not Citizenship
EU Residency: If you live in the EU, your vessel must normally have VAT Paid Status unless qualifying under Temporary Admission.
Non-EU Residency: If you live outside the EU, you may bring a non-EU VAT paid yacht into EU waters under Temporary Admission for up to 18 months without paying VAT.
EU Citizenship: Holding an EU passport does not by itself determine VAT liability. Residency, not nationality, is what matters.
How a Yacht Gains VAT Paid Status
A yacht may be classed as VAT Paid if:
It was first supplied new in the EU with VAT correctly charged and not reclaimed.
It has been legally imported into the EU with VAT paid.
It qualifies under transitional rules (for example, private yachts in EU waters before 1 January 1985 and present on 31 December 1992).
How VAT Paid Status Can Be Lost
Sale of the vessel outside the EU.
Yacht remaining outside the EU for more than three years.
Sale by a VAT-registered business that reclaimed input VAT.
Documentation to Keep Onboard
Original VAT invoice or import entry.
Full chain of Bills of Sale.
Evidence of presence in EU waters at key dates (e.g. Brexit).
Current registration certificate.
Temporary Admission Relief
Available to non-EU resident owners.
Yacht may remain in EU waters for up to 18 months without VAT.
Must not be sold, chartered, or transferred to an EU resident during this period.
Summary
Residency is decisive for VAT treatment – not citizenship.
Always retain documentation proving VAT Paid Status or relief.
EU Customs can seize or assess VAT if evidence is missing.
Disclaimer
Advice based on legislation in force at the date of reply; confirm with the competent Customs office.