Hey there! We are US residents, buying a boat from an EU country without VAT paid and planning to travel worldwide, including the Mediterranean, the Caribbean, the US coast, and more international destinations. Can anyone suggest which country is best to flag the boat and do I need to pay VAT?
Fountaine Pajot Helia 44 in Turkey
If you’re going to pay VAT then Poland is absolutely NOT the cheapest as their VAT rate is 23% – one of the highest in the EU.
The lowest rate is Cyprus or Malta at 19%.
However the best way of all is to register in a tax haven like Guernsey where you don’t pay any VAT and then you have an 18 month clock in EU waters tax free and you can reset that clock for another 18 months by taking the boat to Turkey for example for just one day.
That will give 3 years of no VAT. You could elect to reflag and then pay VAT on the then lowest VAT rate country – paying VAT on the market value of the boat applicable at the time.
The cost of registering the boat in Guernsey is £2,000 approx and Guernsey is recognized worldwide as a premier flag and therefore insurance is very easy to get.