The increasingly strong fiscal interests of the tax authorities have obviously led to the fact that to an increasing extent the owners of boats and yachts have also come into the view of the authorities responsible for the turnover and import turnover tax. Nationwide, there are reports of customs inspections, directly at marinas in the maritime and inland areas. Very few owners were able to provide proof of the sales tax paid directly on site. These are not unique cases! So what should you consider as the owner of a boat or yacht?
The problem has been known in the water sports industry for a long time. Nevertheless, the BVWW (Bundesverband Wassersportwirtschaft e.V.) would like to give you a short overview and some information:
1. Which certificates are accepted?
Water sports vehicles that are to be used within the member states of the European Union and by persons resident there must be in "free circulation for tax purposes". The sales tax must have been paid for old vehicles in one of the EU member states. Appropriate proof of this must be presented at the request of the customs authorities.
The obligation to provide proof does not apply to all vehicles. The relevant EU Directive 92/111/EEC stipulates that taxation is to be assumed for watercraft that were put into service before January 1, 1985. In the case of the later accession countries, however, different cut-off dates were set. The problem in practice lies in the proof of the paid sales or import sales tax. The tax authorities accept sales invoices from a dealer with sales tax shown as proof.
In addition, customs clearance documents showing the import VAT paid on imports from third countries are also accepted as proof of free circulation under customs and tax law. A certificate from the manufacturer or supplier stating that the VAT has been paid can also be accepted as proof. Another suitable proof is the so-called "single administrative document with customs endorsement". After the above-mentioned directive came into force, many owners in the EU became liable to pay VAT. When paying the VAT, the owner received the SAD as a proof.
The owners who could prove with appropriate documents such as invoices, insurance papers, etc. that their boat had already been put into operation before the effective date and was stationed in the EU remained tax-exempt. However, no evidence of this was provided by the authorities.
The tax authorities always check on a case-by-case basis what evidence they consider sufficient. However, declarations or assurances by private individuals, e.g. a previous owner, are not sufficient, even if they are included in the written purchase agreement.
All in all, there is a considerable problem in proving taxation, especially in the case of older boats, and especially in the case of multiple changes of ownership. In the case of very old boats, there may also be difficulties in proving tax exemption, because the time of commissioning and stationing of the boat on the reference date is decisive.
2. What must be watched out for when concluding sales contracts or in agency business?
The missing proof of the paid sales tax leads more and more often also to legal problems with the conclusion or the completion of sales contracts, The BVWW offers its members different model sales contracts among other things for new and used boats as well as for sales in the agency business. These model contracts are also balanced in the interest of the solid and reputable dealer and therefore also take into account the well-understood interests of the buyers as customers of the trader.
For this reason, the sample contracts offered by BVWW include an assurance by the seller that the sales tax has been paid. This assurance of the dealer or the private seller leads to liability. This liability is independent of any fault on the part of the seller with regard to the lack of proof. The BVWW continues to consider this contractual arrangement appropriate, even in light of recent inspections.
However, the trader or agent should check in each individual case whether he should delete this declaration or assurance in the contract. If suitable proof cannot be provided, the relevant clause of the contract must be deleted or adapted. The lack of proof should then be expressly pointed out in an amendment to the contract. lns particular, intermediaries should exercise special caution when concluding purchase agreements in the agency business. On the one hand, intermediaries are liable to their client, for whom they often make declarations, but also, under certain circumstances, to the other party to the contract on the basis of so-called intermediary liability.
However, the seller or agent may also be liable if the contract does not contain an explicit provision on the payment of VAT. In these cases, too, if there is any doubt, provisions should be included in the contract that point out the problem of a lack of proof.
Here is an overview of the most important details:
- Sales invoices, customs clearance documents, supplier's certificate or SAD with customs endorsement may be accepted as suitable evidence.
- Only if suitable proof is available may this also be assured in the purchase contract.
- Missing evidence must be pointed out in the contract. Otherwise, the customer may assume that he is purchasing a taxed boat.
