Questions of VAT 2: Azores

Created by webmaster. Last modified on 2005-01-15 14:20:36
Contributors:
Topic: VAT

Received from: Patricia Smith, s/v Wantok

Question 1: Are you aware of any EU country giving special entry provisions to a liveaboard that is a "permanent residence"? I thought I had heard something about UK.

Have Canadian registered Nicholson 35, built UK 1983, given VAT-exempt status due to immediate export to US from manufacturer. I also understand that this tax exempt status pre-1985 would have subsequently been annulled, as vessel was not in EU on december 31, 1993? The vessel is my home, although I have a Canadian mailing address and am considered a Canadian resident for income tax purposes. I have both Canadian and UK citizenship, and am currently in the Azores under my UK passport (of greater practicality for EU visit).

Answer: In your case, it would be better for you to use your Canadian passport and take advantage of the soon to become law - 18 months VAT free stay in the EU. If, however, you insist on using your EU passport, sooner or later you'll have problems.

Question 2: Vessel currently in Azores, where I am advised that, pursuant to a Portuguese regulation, effective December 31, 1999, private yachts are excluded from the tax-exempt status granted under EU reg. no. 2454/93 (the reg. currently under revision re time-limits).

The Portuguese regulation was circulated by their documentation and public affairs centre, dated June 1, 1999, as circular #47/99 "serie II". Section II, article 13, 1(d) and 3(a)III refer.

I have just been charged 25% VAT and other misc. costs on a US$200 item! Although I have been advised that the VAT here is 12%. Would this just be on vessels?

I was yesterday advised that VAT would not have applied had the goods been sent to a commercial vessel, or had I used a broker. However, as they had been addressed to my private vessel at the marina, there was no obligation on the part of the post office or the customs office to deliver them to me, I therefore had to pick up the goods myself, resulting in their being carried over Portuguese territory, and so subject to VAT, etc....; the final comment was that "this was the cheapest way" for me to import these goods. This last info received from Sr Melo, Director of Customs in Ponta Delgada (verbally). Some of it, at least, would appear to be in conflict with circular 47/99 (above).

Are you in a position to confirm or deny any of this? Or is there a site where I can obtain such info?

Noonsite Answer:

The problem with the Azores is that local Customs interpret VAT rules as they see fit, so there is little you can do about it once the local Customs man decides to throw the book at you. So if you feel in real danger of being forced to pay VAT on your boat, rather than start having legal wrangles with Azores Customs, I suggest you leave the Azores, go to a non-EU destination and re-enter with your Canadian passport.

Question 3: Shipment of new liferaft

I am awaiting response to arrange shipment of a new Winslow liferaft (ordered in January, before Ponta Delgada discovered this "new" regulation). I currently propose to route through Madeira, Canaries, possibly Cape Verdes, to Trinidad. Would it cost-preferable for me to route raft via one of these stops? Obviously I would prefer to have it now, but at 25% I´m not sure I can afford it.

Answer:

The liferaft is best sent to the Canaries, where there is NO Vat and it is indeed much easier to retrieve items from Customs BUT you do need a local agent to expedite matters. The Canaries generally are much more lenient, so maybe that's where you should go!

Relevant countries: Azores , Canary Islands