Only in rare cases of doubt do customs require corresponding proof. There is also no general obligation to provide proof of Union status after every return to the home port from outside one's own country. Nevertheless, there are always different interpretations and applications of both customs and VAT regulations from country to country and from office to office throughout the EU.
The EU has therefore drawn up guidelines. Recreational craft lawyer Benyamin Tanis recently reported on this on yacht.de.
However, as the guide appears to be extremely complicated even for the authors, they have also added a long catalogue of questions and answers, which is intended to deal with as many individual cases as possible.
This concerns, for example, how long a boat may remain outside the EU in order to avoid being taxed again on its return. This is particularly interesting for blue water sailors or for owners who buy a used boat in a non-EU country. For example, in Switzerland or the USA. According to the guidelines, the latter have virtually no chance of not being asked to pay when returning a boat. Even if the boat had EU status and was only outside the EU for a short time - less than three years.
How long can a ship stay outside the EU and who is authorised to re-import it?
The explanations on the condition a boat must be in when it returns to the EU are also fascinating. And who is authorised to return it to the EU so that it does not lose its EU status.
In addition, the Q&A clarifies the difference between EU customs territory and EU VAT Directive territory. A small but subtle difference. Example Canary Islands and Spain. And also what happens when a boat is brought back to the EU from England after Brexit.
Even regatta sailors who enter the EU with their boats for a short time for competitions are considered in the catalogue of questions. And owners of boats who do not live in the EU themselves and/or whose boats are not registered in the EU but do have their home port in the EU are also informed about the extent to which they are exempt from customs duties and taxes.
What do you have to do to clear in or out correctly?
The explanations on how to formally import or export a boat to or from the EU when crossing the border are also of interest to everyone. Keyword: clearing in and out. According to the authors of the tax guide, nobody needs to go to customs. Crossing the border is enough to officially declare the import or export. At least in normal cases. Of course, there are exceptions to this rule. The questions and answers also deal with these.
Below are the questions and answers from the EU guide, which we have translated into German and slightly edited. The English version is binding. And despite the translation, the whole thing is unfortunately not easy to consume due to the unwieldy, bureaucratic language used by the authors.
The most important points from the catalogue of questions and answers from the EU guide on the customs and VAT treatment of recreational craft
How does a boat owner prove that his boat has Union status in case of doubt?
For boats that need to prove their respective Union status, a T2L certificate is usually requested from the customs authorities of the country where the boat is berthed (where it usually spends most of its time). The customs authorities of this EU country issue the T2L certificate as soon as the necessary checks have been carried out and they have no doubts that the goods have the customs status of Union goods. If necessary, they ensure that the customs duties and taxes due have been paid. The respective checks by the customs authorities depend on the individual case. They concern VAT issues, which are largely based on national legislation. And customs have a certain amount of discretionary power, which means that there may be slightly different checks depending on the country.
Do all goods released for free circulation in the EU have the customs status of Union goods?
Goods that have been released for free circulation by the customs authorities in the EU have the status of Union goods. This means that the necessary checks have been carried out on the goods and, where applicable, taxes and duties have been paid. Please note that according to Article 4(8) and Article 7(2)(d) of Council Directive (EU) 2020/262 laying down the general arrangements for excise duty, the excise duty rules apply to excise goods released for free circulation.
Special case: If a boat is released for free circulation in a part of the customs territory of the Union that is not part of the EU VAT territory, VAT may be due on importation despite the customs status as Union goods if the boat is imported into the VAT territory and does not qualify for duty exemption or is not imported by the person who exported the boat (or was not previously in free circulation in the VAT territory).
If all goods in the customs territory of the Union are presumed to be Union goods unless it is established that they are not Union goods, why do I need to be able to prove that my boat has Union status?
Not all goods in the EU have Union status. Goods may be under customs supervision and have been brought into the customs territory of the Union under a customs procedure such as temporary admission. There are restrictions on who may use such customs procedures. If a boat is used in the customs territory of the Union by an EU citizen, it must generally have Union status. According to Article 46 UCC, Member States are authorised to carry out any customs controls they deem necessary.
Moreover, since the mere crossing of the border of the customs territory of the Union can be considered a customs declaration, this declaration can be verified by the customs authorities in accordance with Article 188 UCC.
Can someone who is not resident in the EU own a vessel with Union status and keep it in the EU indefinitely?
Yes, a person who is not resident in the EU can own a ship with Union status and keep it in the EU; as long as the ship is in the customs territory of the Union, the presumption of Union status applies. Ownership of a vessel is not relevant for customs status. However, as most boats with Union status are registered in an EU Member State, a boat registered outside the EU may be subject to more frequent inspections. The ownership and registration of the boat have no relevance to customs status or VAT obligations.
Can a boat registered outside the EU have Union status?
Yes, the nationality of the owner, the country in which the boat is registered and the flag of the boat owner are not relevant for the customs status of the boat.
What happens when a boat that is in free circulation with the customs status of Union goods leaves the customs territory of the Union?
If the boat is removed from the customs territory of the Union, it loses its Union status (i.e. it becomes a non-Union good), unless this status is established under certain conditions and in accordance with the procedures laid down in the customs legislation (Article 155 UCC).
When a boat is removed from the customs territory of the Union, it automatically loses its Union status (i.e. it becomes a non-Union good). Can the boat regain its Union status and be released for free circulation when it returns to the customs territory of the Union?
Yes, if the boat is returned to the customs territory of the Union, it can regain its Union status provided it is released for free circulation. To be considered as returning goods and avoid the payment of customs duties and VAT, the boat must fulfil the conditions set out in Article 203 of Regulation (EU) No 952/2013 (UCC), i.e. it must be re-imported within three years of leaving the customs territory of the Union and return in the condition in which it was when exported.
In order to be exempt from VAT, the boat must also be re-imported by the same person who exported it (see Article 143(1)(e) of Council Directive 2006/112/EC (VAT Directive)). In order to be released for free circulation, the boat must be declared to customs, which in the case of a returned item is done simply by crossing the border with the boat (see Article 141(1)(d)(v) of Regulation (EU) 2015/2446, hereinafter UCC-DA).
If the boat cannot be considered as returned goods (e.g. because it is brought back to the EU after four years), customs duties and VAT are only not due if the boat is eligible for temporary importation and is declared for this purpose. In this case, the boat remains a non-Union good (i.e. it is under customs supervision) and must be re-exported after 18 months in accordance with Article 217(e) UCC-DA.
Can a person who is not established in the EU return to the EU with a boat that had Union status when it left the EU and re-enter the EU without paying VAT and import duties if all the conditions of Articles 203 UCC and 158 UCC DA and Article 143(1)(e) of the VAT Directive are met? An example of this would be an Australian citizen resident in Australia who places his pleasure craft in Croatia. The vessel has Union status and is in free circulation. Can he travel to Montenegro for a few months (less than 3 years) and then return to the EU with the vessel without paying VAT and import duties on the vessel?
The nationality of the owner, the country in which the boat is registered and the flag of the boat are not relevant for the assessment of customs duties and/or VAT for goods returning to the customs territory of the Union, except in the case of temporary importation under Article 212 UCC DA.
Special case: With regard to boats that were in the UK on 1 January 2021 (when the UK was no longer treated as an EU Member State), it should also be noted that, from a customs perspective, all goods that had Union status and were removed from the customs territory of the EU on or before 31 December 2020 are exempt from customs duty as returned goods under the conditions of Articles 203 UCC and 158 UCC DA. If this is the case, they should also be exempt from VAT in accordance with Article 143(1)(e) of the VAT Directive, i.e. re-importation in the state in which the export took place must be carried out by the person who exported the boat.
What does an EU citizen who buys a boat outside the customs territory of the Union and wants to import it into the customs territory of the Union have to do?
Any person wishing to place goods under a specific customs procedure, e.g. release for free circulation, must declare this in the prescribed form and manner by submitting a customs declaration. For specific details, please contact the relevant customs administration.
Can someone who is not established in the EU pay VAT and import duties on arrival in the EU and have their imported watercraft released for free circulation?
Any person who wishes to place goods under a particular customs procedure, e.g. release for free circulation, must declare this in the prescribed form and manner by submitting a customs declaration. In principle, when declaring goods for release for free circulation, the declarant must be established in the customs territory of the Union. Therefore, if a person established outside the EU wishes to lodge a customs declaration to release a recreational craft for free circulation in the EU, that person must involve an indirect representative established in the EU to act as the declarant. However, Article 170(3)(b) of the Union Customs Code provides for an exception to this general rule where the customs authorities consider it justified.
Is it always necessary to contact a customs officer when arriving in the customs territory of the Union with a recreational craft in order to obtain customs clearance?
Upon importation, the goods (the watercraft) are deemed to be released for free circulation simply by crossing the border of the customs territory of the Union, regardless of where the watercraft is registered and where the owner is resident. This is the case if the watercraft is declared as returned goods or for temporary importation.
Do certain formal procedures have to be followed to export a boat in free circulation from the customs territory of the Union?
No, the export declaration for a boat that is in free circulation prior to export and is to be re-imported can be made orally (see Article 137(1)(c) UCC-DA for a boat registered in the EU and Article 137(2) UCC-DA for a boat registered elsewhere in the world). Irrespective of where the owner is resident (where he is domiciled) and irrespective of whether the boat is registered in the EU or elsewhere in the world, the mere crossing of the border of the customs territory of the Union is deemed to be an export declaration (see Article 140(1)(d)(iii) UCC-DA).
What happens if a boat that was previously in free circulation with the customs status of Union goods, but lost this status because it left the customs territory of the Union, returns to the customs territory of the Union but cannot be considered as returned goods (e.g. because it is brought back to the EU after four years)?
Customs duties and VAT only do not apply if the boat is declared for temporary importation, which can also be done simply by crossing the border (see Article 141(1)(d)(iv) UCC DA). In this case, the boat remains a non-Union good (i.e. it is under customs supervision) and must be re-exported after 18 months in accordance with Article 217(e) UCC DA. Please note that only vessels with non-EU registration can be declared in the Union under "temporary admission". In such cases, different deadlines apply depending on the mode of transport.
There are territories that are part of the EU customs territory but are not part of the VAT territory; therefore a boat can have Union status without VAT having been charged in the EU VAT territory. Have all goods with Union status been released for free circulation in the EU VAT territory? Is VAT payable when a boat enters the EU VAT territory from a place that is part of the customs territory of the Union but not part of the EU VAT territory?
No, a boat in the EU customs territory outside the VAT territory may have Union status, but as soon as it enters the EU VAT territory, the VAT due must be paid. The "release for free circulation" is a customs procedure that includes the collection of import duties and other charges as well as the application of commercial policy measures (Article 5(16) and Article 201 UCC).
For VAT purposes, goods brought into the EU VAT territory from a part of the customs territory of the Union that is not part of the EU VAT territory are deemed to be imports. An example of this would be transport from the Canary Islands to Madrid. VAT exemptions may apply to imports, such as those set out in Article 143 of the VAT Directive. In this context, the re-importation of boats by the person who exported them and in the condition in which they were exported is exempt from VAT, provided that these boats are exempt from customs duties (see Article 143(1)(e) of the VAT Directive). The boat must have been in free circulation in the EU VAT territory and must be returned to the EU VAT territory by the person who exported it from that territory.
For example, if a ship was in free circulation in Spain and then sailed to the Canary Islands, Article 143(e) of the VAT Directive exempts the re-importation by the person who exported it of goods in the same condition in which they were exported on its return to Spain, provided that these goods are exempt from customs duties. If these conditions are met, no VAT is payable.
If the watercraft was exported from free circulation in the EU VAT territory by a previous owner or was never in free circulation in the EU VAT territory, VAT must be paid on importation into the EU VAT territory.
I have a boat that is normally based in a country that is not part of the EU customs territory. Can I bring it into the customs territory of the EU for competitions or holidays without having to complete customs formalities or pay VAT or other duties?
A boat or aircraft for private use can be temporarily brought into the EU from a third country under a temporary admission procedure without incurring VAT or other duties. The boat or aircraft must be registered outside the EU and owned by a person established outside the EU in order to benefit from this procedure with full exemption from import duties. The boat must leave (be re-exported) the customs territory of the EU within specified time limits: namely within 18 months for a boat/sea vessel.
How can a yacht be placed under temporary admission (TA)?
In general, it is sufficient to cross the border of the customs territory of the Union. However, you may have to use a route specified by customs and customs may require you to make an oral or written customs declaration. It is possible that customs will require the provision of a security or guarantee to cover the payment of customs duties and VAT due if the boat does not leave the EU.
How long can the yacht remain in the EU?
As a rule, you can use the watercraft in the EU for one and a half years. Technically, the period for discharge for privately used sea and inland waterway vessels is 18 months. This is set out in Article 217(e) of Commission Delegated Regulation (EU) 2015/2446 (UCC-DA).
Please note that with regard to temporary admission, Article 251(4) of Regulation (EU) No 952/2013 (UCC) stipulates that "the total period during which goods may remain under the temporary admission procedure shall not exceed 10 years, except in unforeseeable circumstances".
Can the 18-month period be extended if the yacht is not used? Perhaps you would like to go home for Christmas!
This period may be extended by a reasonable period in exceptional circumstances upon reasoned request, as laid down in Article 251(3) of the Union Customs Code (UCC).
Do the authorities have to be notified if a boat that is in the EU for temporary use is left in the EU while the owner leaves the EU for a certain period of time?
The holder of the temporary admission authorisation must transfer the rights and obligations before leaving the customs territory of the Union: in such cases, customs authorities usually ask the holder to apply for a prior authorisation for transfer of rights and obligations (TORO) in accordance with Article 218 UCC before leaving the customs territory of the Union. There is no explicit provision in the EU customs legislation stating that this TORO authorisation is mandatory or that the transfer must take place before the holder leaves the customs territory of the Union. However, such a TORO authorisation should be required to ensure proper customs supervision and to facilitate possible customs controls that may be carried out at any time (see Article 46 UCC). The transferee of this TORO authorisation could, for example, be the port authority in whose jurisdiction the boat is located. In practice, this is rarely required.
Is a further period for temporary importation possible? How long do you have to wait?
Yes, you are not limited to a single period of temporary importation. You can leave the EU with the yacht and when you return, a new period of temporary importation can begin. The customs rules do not provide for a "minimum period" during which the goods must remain outside the customs territory of the Union. However, according to Article 251(4) UCC, the total period during which goods may remain under the temporary admission procedure may not exceed 10 years, except in unforeseeable circumstances.
We assume that the boat is a piece of sports equipment and falls within the scope of Article 2 of Annex B.6 of the 1990 Istanbul Convention on Temporary Admission (adopted by Council Decision 93/329/EEC of 15 March 1993). If it is brought into the EU temporarily for personal use (regardless of whether it is used in a regatta or not), is a customs declaration required in this situation?
Yes, a customs declaration is required, see above.
In what form should the customs declaration be made?
If the boat is declared for temporary importation as recreational craft (Article 219 of the Delegated Act to the Union Customs Code (UCC-DA)), an oral declaration may be sufficient in accordance with Article 136(b) UCC-DA. Alternatively, a declaration may be made by another act in accordance with Article 141(1)(a) and (b) UCC-DA (see Article 139 UCC-DA), e.g. by passing through the green channel.
Is an oral customs declaration sufficient?
Yes, it is sufficient, see above. However, the customs authorities may require a declaration other than the standard oral declaration in certain circumstances.
What should the boat owner do if the customs officer in the EU Member State disagrees?
In the event of disagreement with the customs authorities, the persons concerned have the right to lodge an objection in accordance with Article 44 of the Union Customs Code (UCC).
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Pascal Schürmann
Editor YACHT
