EU cross border VAT question

No idea. Do you have an accountant to ask?

There's some new VAT form thing to fill in these days ... had to register at the gateway for it... it's to do with cross border stuff I think.

Why are you just answering this, I asked the question three months ago!

Yes, I know all about this and I'm registered. It's just not really clear what one can reclaim, hence my original question. We (fairly) obviously can claim the VAT on day to day expenses incurred running the boat but I'm not at all sure about the capital cost of the boat itself.

I'm an accountant but I don't get involved with registering for VAT in other EU countries. Large firms of accountants will deal with this for you but it will be expensive. You are better off using a smaller firm in France who can speak English.

I know of businesses who try to do it themselves but they don't find it easy.

I'm not aiming to register in France, I'm using the (new) way of handling reclaiming VAT expenses incurred in other countries of the EU. We will have no income in France from the boat, any income will be paid in pounds in the UK to our company here.

Registering to claim back VAT incurred in other countries of the EU is now standardised across the EU and you can do it in your own language on a (relatively) simple form that you can find at the UK Tax&VAT site.

It's pretty clear that we *can* reclaim VAT on expenses incurred on maintaining the boat, repairs and things like that. There are codes for exactly the sort of things we will be doing.

What isn't so clear is whether we can reclaim the VAT on the purchase price of the boat, that would go under the last code which is a sort of 'everything else' code.

In principle everything ought to work in exactly the same way as if you were running the whole show in the UK, i.e. *where* an expense was incurred (provided it was incurred in the EU) should have no bearing on whether it can be reclaimed.

That being the case, the answer ought to be that you can claim back the VAT on the capital cost of the boat bought in France if and only if you could reclaim it if you were instead buying it in the UK. That question should be easier to find the answer to.

As an aside, might it not be easier to do just that? Buy the boat from a UK based middleman who will import the boat for you and give you a nice simple UK VAT invoice. But perhaps the mark-up is too high.

A different question you will need to explore is whether it is permitted to base a UK-flagged boat in France at all if it's going to be commercially used. You may need to change it to French-flagged, in which case it would need to be French-owned, so you would need to form a French company through which to own it. It is unlikely that a French company could become UK VAT registered, so you would need to register for French VAT instead.

Ah, but what *does* affect whether the VAT can be reclaimed is the French rules that apply, it doesn't play by the UK rules. While in general the rules are similar in all countries the details can be different, otherwise we'd all be working to the same "VAT Guide" and we're not.

See above, I don't think that's true.

I don't want to import the boat, it's staying in France. That's what makes this a somewhat out of the ordinary case.

It's already French flagged, we're buying it from a French company, it's all ready to go as a French registered boat on French waterways. I don't think the ownership affects its registration at all.

I fear you may be mistaken on that point, and would suggest you seek further advice. It is, so far as I'm aware, a general feature of international maritime law that flagging (i.e. registration) is tied to ownership of nationals (citizens) of the flag country concerned.

No doubt French rules will be similar to British rules in this respect but my knowledge and experience is limited to the latter. In the case of a boat owned by an individual, the basic rule is that you cannot put your boat on the UK shipping register unless you are a UK national. There is an exception under the Treaty of Rome whereby the privilege of UK registration is also extended to UK resident EU nationals. I don't know off hand whether this concept extends to companies or whether it even makes sense for it to do so; how do you establish whether a foreign (but EU) company is "resident" in the UK? On the other hand, I don't think foreign ownership of a UK registered company would be a problem. Provided the company is UK registered, any boat it owns can be UK flagged.

Translating this to your situation, I think it means that unless you're going to form (and own) a French company for the sole purpose of owning and running the boat, or you own the boat personally and become French resident, you won't be able to keep it French flagged. The fact that the boat is "already French flagged" is irrelevant because French registration will (or should, if their rules are similar to ours) automatically lapse as soon as the eligibility criteria for French registration cease to met, such as upon sale of the vessel to foreign (i.e. non-French) owners (such as your UK company).

There are hundreds (if not thousands) of British (and Dutch and German) owned boats trundling around on French waterways and the registrations thereof are as many and varied as the owneerships with no one to one correspondence between nationality of owner and nationality of registration.

Maybe 'inland waterways' registration of small[ish] boats works differently from what you're describing but it doesn't seem to me that your understanding above is anything like the reality I am seeing.

I will check it out though, I'll report back here if/when I find any interesting answers.

I find that surprising.

Perhaps. The sort of boats I'm talking about are ones which would not be restricted to inland waters, but which operate in coastal waters and are in principle "sea-going".