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Customs compliance

Works of art

Works of art and collectibles on board due to their particularities deserve a special consideration., as usually they are considered part of the Yacht equipment, when they are not. When travelling by yacht between ports, multiple EU borders are often crossed which would involve controls in different EU jurisdictions.

Appropriate customs procedures must be followed to ensure that the correct paperwork is in place for avoidance of any import VAT or customs duties. Furthermore, beyond the customs regulations, certain cultural properties fall outside the rules of freedom of movement and Cultural Heritage authorities might require to be in possession of the relevant export authorizations.

Cash declarations

As part of the EU’s efforts to tackle money laundering and the financing of terrorism, all travellers entering or leaving EU territory are already obliged to complete a cash declaration when carrying EUR 10 000 or more. Failure to comply with this obligation might involve severe penalties and detain undeclared cash. From June 2021 the definition of ‘cash’ in the rules will be extended to include certain other valuable items. Either you are arriving in your private jet or your superyacht we can assist completing these procedures on your behalf.

Inward Processing

Inward Processing relief allows customs duties, import VAT and excise duty on third country Yachts or Aircrafts imported to the EU for processing to be suspended on condition that there is an intention to re-export the yachts at the end of processing and that all the requirements of the procedure are met. If you plan to carry out maintenance works or a complete refit, this may be the right mechanism to use.

We assist planning the appropriate procedures and sequence of operations to be eligible for this customs arrangement. In addition, through our preferential partners we   control all the procedure until the processing is finalised.

Importation of commercial Yachts

Import under French Commercial Exemption allows import of commercial yachts VAT exempt into Europe. To be eligible the yacht must fulfil five conditions:

  • LOA must be over 15 meters.
  • Hold a commercial registration.
  • Must have permanent crew.
  • Must be used exclusively for commercial purposes.
  • 70% of the navigation must take place outside the French waters.

The exemption is not permanent, and it must be assessed year by year. If conditions are not fulfilled in time VAT can be enforced on the yacht value.

Temporary Admission for private Yachts and Aircrafts

Temporary Admission can very simply be described as a mechanism that enables non-European Union (EU) resident Yachts and Aircrafts owners to bring their assets into Europe for a limited time under certain conditions without having to pay VAT on their value.

There are three fundamental criteria laid down in the Union Customs Code for Yachts or Aircrafts to qualify for Temporary Admission

  • They must be owned by a person who is established outside EU.
  • They must be registered outside EU.
  • They must be used privately.

We assist with the necessary formalities to place and discharge Yachts or Aircrafts in this customs regime.

Export and duty-free re-importation

Non-EU flagged yachts in free circulation in the EU shall require completing a Temporary Export Declaration whenever leaving the EU so they can benefit relief from customs duty and VAT when returning to the EU customs area. The conditions to be eligible for this mechanism are:

  • The importer must be the same entity or person who exported the yacht.
  • The value of the yacht shall not be altered.
  • There is a time-limit of three year for re-importation of the yacht to the EU.

VAT importation depreciated value

VAT must be paid on any yacht sailing EU waters unless it falls under the temporary import relief. The main principle to determine the customs value for VAT is the purchase price agreed between independent parties. However, there are situations where this mechanism is not applicable, as it could be those cases where long time owned vessels intend to be imported into the EU for the first time. In this situation based on a book value Spain has a unique mechanism based on a “book” value which allows determine the import according to the years of use of the yacht. The percentages of depreciation might range from 10% 90% for yachts over 14 years age.

This is a very efficient and tax wise solution in the current post-Brexit times or for any other non-EU owner to settle VAT and conferring free circulation and allowing indefinite use within the EU.

Let us help you with your tax issue

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