Changing Flag Post Brexit

[alenka]

I recently received a PM asking if I was planning on changing flag post Brexit to avoid problems cruising in Greece.

As my answer might be of interest to a few forum members this is how I replied. Perhaps others could add comments regarding other countries such as France, Italy, Spain, Portugal, etc.
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At this point in time I have no plans to change flag.

When you apply for a DEPKA to cruise in Greece you have to show all passports for the owners. Putting a boat on another flag does not disguise the nationality of the owners. Well, maybe, on a daily basis but day to day sailing in Greece does not create any problems as such requiring you to show your paperwork other than to confirm the LOA for port fees.

If you are thinking that once out of the EU then UK citizens may be limited to the 90 day in 180 day rule then it has to be considered that many EU countries already grant a 12 month tourist visa to non Schengen visitors from New Zealand, Australia, etc. It is highly likely we will considered for just such a visa. The boat is not the problem, it can be put in customs bond - people potentially could be.

A big downside to changing flag is that should you require boat related consular assistance then that will be provided by the country of flag, in the language of that country and according to their laws.

An even bigger downside is that you might prompt a tax investigation if the country of flagging includes boats in wealth tax calculations.

I would certainly not attempt to re-register in Greece for the reasons stated above and a few more besides.

[vasko]

yep the PM was from me Thanks for the answer   


agree ! - I'm more worried about :



1. the 18 months rule - e.g. the boat need to leave EU every eighteen months or will be subject to EU VAT ( in practice as our boats has a EU VAT paid while UK was part of EU  - VAT problems and 18 months should not be valid , but not sure that this can be explained to Greek authorities...)



2. when decide to sell the boat - will be issue as potential EU buyers will need to pay VAT on it



in my case I have another EU passport on top of the UK one e.g. I'm entitled to have the boat registered in Holland and Belgium with no issues ... also I think Malcolm already registered his with Swedish flag ?

[MalcolmP]

As with all things brexit there seems to be hardly any facts and just lots of speculation. The recent edition of the Cruising Association magazine has an article on post brexit VAT, which makes assumptions and speculates some scenarios, but until official stance is known on both sides it seems yachting Brits face a big dilemma, which of course is not very high up on the pecking order for action. So think we have to plough our own furrows at the moment, which may prove to be right or wrong with hindsight.

The CA article also speculates that for those UK flagged boats that remain in the UK post brexit may face a new VAT bill if they subsequently (and after more than 3 years) then move the boat permanently into the EU as even now VAT paid EU boats loose that status if they leave the EU for more than 3 years. I suspect this is not currently often enforced (probably because there is no effective reporting/monitoring mechanism) as all the returning world cruisers would already face this issue. 

Yes we have reflagged as Swedish, it was really straightforward and is easy and cheap if you are under either 12m LOA or 4m beam. But fortunately my wife is now listed as the owner and has Irish nationality (we would have preferred to have flown the Irish tricolour, but that currently is ultra complex as the boat needs to measured by an Irish examiner)

[alenka]

The VAT issue could be more restrictive than the loss of freedom-of-movement for UK citizens post Brexit.

Although I doubt the Greeks will have any concern, other countries love to check VAT status. Equally, the idea of paying a 2nd lot of VAT when returning to the UK after 3 years from a post Brexit EU is somewhat daunting... Dare I say it has the potential to hammer yet another nail in the coffin of the UK boating industry.

There are two simple solutions. 

(i)    Use 2019 as a watershed where VAT paid (prior) in any EU country is valid in both the UK and Ireland for the life of the boat.

(ii)   Get HMRC to drop the 3 year rule.    

Of course, nothing in politics is ever simple. But maybe the RYA, CA and even the members of this forum should start lobbying?!?