The Temporary Importation (TI) VAT relief is regulated in the provisions of the EU Council Regulation (EEC) No 2913/92 establishing the Community Customs Code means for non-EU vessels are intended for re-export may be temporarily be brought into and used for private purposes in the EU, or more strictly in the Customs territory of the Community, (which includes our territorial waters) without customs duties or Value Added Tax (VAT) needing to be paid.
The period of the customs duties and VAT relief under TI is 18 months. A boat is temporarily imported into the EU and not into one of the Member States; thus it can move from one Member State to another with no further customs formalities during the 18 month period allowed. In case that the vessel shall not be moved the owner might apply to the Customs & Excise Office to put the vessel in bond, that is, the boat is laid up for a certain period of time not counting the period of non-use. Before starting new navigation said bond must be removed by the Customs.
You should also know that the TI relief for means of transport covers spare parts and the accessories that accompany them, however if the importation is just – or mainly – for the purposes of major overhaul, refitting or refurbishment, it won’t be eligible for TI, but we should consider using Inward Processing (IP) instead.
You may be able to claim total relief – custom duties and import VAT exemption – as long as the vessel:
- it’s registered outside the customs territory of the EU in the name of a person established outside that territory
- if it’s not registered, it must be owned by a person established outside the customs territory of the EU
- it’s used by someone established outside the customs territory of the EU
- its use is private, or if it’s being used commercially, its journeys begin or end outside the customs territory of the EU
The non EU flagged vessel is just placed under TI by arriving in any EU although in order to state clear the period of 18 months and the tax situation we highly recommend to make written Customs declaration, which helps in case of being stopped by the Customs or Guardia Civil . The re-exportation of the goods from the Customs territory of the Community is the usual way of ending or ‘discharging’ a temporary importation procedure. If the boat does not leave before the end of that time then customs duty and VAT become due. In Spain the 21% VAT-rate.
Finally, we just remind you that you are not limited to a single period of temporary import so that you can sail the yacht out of the EU one day and when you came back again for another holiday a new 18 months period of temporary importation can begin.
However, is very important to observe very strictly all provisions, procedures and 18 months periods of time and the nature of the residence for tax purposes in the EU, then the consequences of any mistake these regards means the vessel arrested and VAT payment and sanctions immediately due (or bank guarantee due if you want to go to a several years long financial court procedure).