Yachts, often regarded as the playthings of the affluent, are frequently produced in European countries such as Germany, the Netherlands, and Italy. These nations are home to luxury shipyards like Lürssen in Bremen and Blohm + Voss in Hamburg, where the epitome of nautical luxury is crafted.
However, for those endeavouring to export a yacht from the EU to a non-EU country, navigating the waters of customs and tax regulations is a must.
Setting sail VAT-free: export delivery to third countries
In general, the export delivery of a yacht is exempt from European VAT, given that the vessel is genuinely being exported to a third country and the purchaser is a foreign recipient. For the context of this guide, let’s assume the yacht is destined for an offshore jurisdiction like the Cayman Islands, intending to sail under the Cayman flag. Given their status as a British overseas territory, the Cayman Islands are viewed as a third country from the EU’s standpoint.
The seller must validate the tax exemption with appropriate evidence, including export documents and customs documents.
Navigating customs: export formalities for Union goods
Exporting Union goods from the EU’s customs territory entails a two-stage export procedure:
- To begin with, an electronic export declaration must be submitted to the export customs office, and the yacht must be presented for inspection. During this inspection, the customs office verifies the export declaration and the yacht’s eligibility for export (e.g., by checking the serial number, registration, etc.). If the export is approved, the customs office issues an export accompanying document and clears the yacht for export.
If a non-EU resident, such as a U.S. citizen, is purchasing the yacht and thus requires a customs declaration, they must have representation before the authorities. It is generally advisable to seek a recommendation for a customs agent from the shipyard or a consultant, who can then handle the customs declaration. - The second stage involves presenting the yacht at the exit customs office – the customs office from which the yacht is being exported from the EU’s customs territory. Here, the export accompanying document is also presented. The exit customs office verifies whether the yacht matches the details listed in the export accompanying document. If there are no discrepancies, the customs office clears the yacht for export and concludes the export procedure.
Upon the yacht’s actual departure from the EU, the customs administration issues an export proof. This serves as evidence of a VAT-free export delivery.
If additional items, such as jet skis or dinghies, are also being exported with the yacht, they must be listed with their own positions in the customs declaration, and relevant invoices must be presented.
Docking in the destination country: adhering to customs and import regulations
When importing the yacht into the third country, it’s crucial to comply with the local customs and import regulations. Even though the Cayman Islands are a British territory, the Trade and Cooperation Agreement (TCA) can’t be applied to reduce or avoid tariffs, as overseas territories are excluded from this agreement. Consequently, importing into the Cayman Islands may incur local import duties. An import declaration is required for registration, regardless of whether duties are payable or not. Yachts of a certain size are subject to duty in the Cayman Islands.
Engaging a local customs agent who is well-versed with the local regulations and conditions is always advisable.
In conclusion, exporting a yacht to a third country demands meticulous preparation and coordination with both the shipyard and the relevant customs authorities to sidestep any potential pitfalls. If navigated correctly, at least the export will be VAT-free.
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