Once a vessel, irrespective of type or size, leaves her territorial waters, it is a legal requirement that she is registered. A boat takes its flag normally from either the nationality of the owner or the country of residence of the owner. Most countries have a simple register and a more complex one, which involves further checks, and tonnage and measurement surveys. In the UK, the Small Ships Register is the simple form of registration (for boats under 24m), and the Part 1 is the more involved register. Both have the same legal validity throughout the world, and they are both issued by the Marine and Coastguard Agency MCA.
Boats must carry their original registration document, insurance policy and – where appropriate – a ship’s radio licence. In these circumstances one member of the crew must have a radio operator’s certificate of competence. For EU boats, proof of VAT status is also required. It is also very useful to have a typed sheet containing the name of the boat, dimensions and other key data, registration documents, and the crew list. See elsewhere for information regarding certificates of competence and vignette licences. Boats must also clearly display their registration number – for example their SSR (UK Small Ships Register) number.
For non-Europeans, registration in the Netherlands provides possible advantages, with minimal ‘red tape’ – see here Sander Doeve
Insurance is compulsory on the inland waterways of Europe. In some cases it may be a requirement for the insurance documents to be translated. For further details refer to the relevant countries listed in the RYA’s Foreign Cruising Guides, published jointly with the Cruising Association. These publications detail the regulations for European countries and list the documentary requirements of both the boat and the crew, including a section on inland waterways.
VAT is a tax paid when certain goods, including boats, are purchased new.
VAT paid in one EU country is recognised throughout the EU and import can be made for an indefinite period without complication. The only conclusive proof that a boat is ‘VAT paid’ is the original VAT certificate, which is issued to the original owner of a new boat and subsequently passed on to future owners. However, a variety of VAT exemptions apply to boats, and it is important for the traveller to become familiar with these rules prior to going abroad.
For readers in the UK, the best place to get hold of this information is from the Revenue and Customs website, where various notices are available on line and can be downloaded. Particularly relevant is Notice 8 Sailing your pleasure craft to and from the United Kingdom, published in December 2002. This summarises the main VAT rules relating to EU residents who are using their boat within the Union, and also explains the rules relating to temporary importation, also applying to those who are not EU residents. They may bring a boat into the EU and use it for up to 18 months in a 2-year period without being liable for VAT.
Notice 200 gives further details on temporary import, while notice 728 should be referred to if you are buying a boat for personal use in a country within the EU. VAT is payable either in the country of purchase at that country’s rate, or at the rate applicable in country of destination.
VAT, Boats and the E.U.
This is a complex subject and one where expert advice should be sought. The following is no more than a series of pointers, without any authority claimed. In addition, whilst the EU has established a VAT tax scheme that in general provides VAT liability for boats purchased in or formally imported into all EU waters, these are EU guidelines and they are interpreted, administered and enforced by each member country’s taxing authority. Therefore, boat owners may often experience some difficulties and misunderstandings in various EU countries, between the varied tax regimes and according to local conditions and individual circumstances. Bear in mind that Gibraltar is not in the EU, nor is Norway. Cyprus, Madeira and Malta currently have lower rates of VAT than other EU states.
VAT for EU registered boats owned by EU citizens
A boat belonging to a EU citizen, or flying the flag of a EU country, must be VAT paid. This means that both in home waters and when sailing between any EU countries, such boats should carry evidence of VAT payment. This could be the original boat builder’s receipt or paid invoice, or some other original document showing clearly that VAT has been paid. A boat owned by EU resident individual or body corporate has the right to free movement throughout the EU, provided VAT has been paid on that vessel in one of the EU countries. A VAT paid yacht should encounter no difficulties in EU waters provided the vessel is not chartered. Pleasure yachts built pre-1985 and in EU waters on 31st December 1992 are treated as VAT paid. Evidence that the yacht was in EU waters on this date may be required.
VAT for non-EU boats and non-EU citizens
Temporary importation relief from VAT is available to yachts beneficially owned and used by non EU residents provided such non EU resident does not become ordinarily resident in the EU. Boats owned by non-EU residents and registered outside the EU are entitled to tax free temporary importation into the EU for a total period of eighteen months. The EU Common Customs Tariff provides for relief from VAT liability for up to 18 months (Article 562(e) as referenced above) when the boat is owned by non-EU residents and where the boat will subsequently be removed from EU waters (Article 561). The permitted period, or temporary importation, applies to the entire EU area and therefore at the end of the period the boat must be sailed to a country outside the EU or VAT must be paid. It must be stressed that the above 18-month VAT relief applies only where the boat is owned and sailed by a person not resident in the customs territory of the EU. The relief is invalidated if the boat is hired, sold or put at the disposal of a EU resident.
For information about boat handling competence see www.french-waterways.com/practicalities/competence.html
For information about boats and equipment see www.french-waterways.com/practicalities/boats-equipment.html
Non-EU boats and owners are required to contact local immigration authorities whenever crossing a border between EU countries. In the case of EU citizens and EU registered vessels, no formalities are required for departures from a EU port to another EU port, nor arrivals in a EU port directly from another EU port. However, immigration must be contacted if there are non-EU citizens aboard. Customs must be also notified if there is anything to declare, such as firearms (the carrying of which is almost always both unnecessary and prejudicial in any EU state and illegal in many). Customs and immigration must be notified when departing for a non-EU port or arriving from one (a yellow Q flag must be flown then). This rule is widely ignored and largely unenforced in the case of Spain and Gibraltar.