Tax matters often raise many doubts. When do we pay? Who pays, and to whom? How much?
Let’s assume that we’re eager for a sea journey and decide to buy a new yacht. We find a good offer abroad, for example in France. We reach an agreement with the seller, pay, and receive the yacht to sail back home. Simple, right? Not entirely. There’s still the matter of VAT.
Why VAT on yacht purchase?
While this may not surprise business owners, a regular individual may not realize that this is one of the exceptions where even a person not running a business must pay VAT. This occurs when we buy a new means of transport from another EU country.
What is a new means of transport?
To determine whether the yacht we’re eyeing is a new means of transport, we need to refer to the VAT Act, which defines it as a vessel not longer than 7.5 meters, if it has been used for no more than 100 sailing hours on water or if no more than 3 months have passed since it was put into use. If the yacht meets these conditions and is purchased abroad, it is considered new, and VAT will need to be paid. It’s worth noting that a “new” yacht doesn’t necessarily have to be purchased directly from a shipyard or manufacturer.
What is intra-community acquisition of goods?
Intra-community acquisition refers to the right to dispose of goods (including a new yacht) that are sent to Poland from another EU country by the supplier, buyer, or on their behalf. In the case of intra-community acquisition of a new means of transport, VAT is also applicable to individuals who are not VAT payers.
Why VAT, even if I’m not a business owner?
The purchase of new means of transport from other EU countries is treated specifically by both EU and Polish tax law. Although this may seem strange and counterintuitive, according to the regulations, even individuals who are not running a business and are not VAT- registered are obligated to pay VAT in such situations. Furthermore, it doesn’t matter whether the seller conducted the transaction within their business activity.
When and how much do I have to pay?
If the yacht meets the criteria to be considered a new means of transport, you must pay 23% VAT, and the tax amount will depend on the price of the yacht. The acquisition must be reported to the tax office using the VAT-10 form. The deadline for submitting the declaration is only 14 days from the receipt of the yacht (or the date of the invoice issued by the seller).
What if I transport the yacht to another EU country, not Poland?
If you’re transporting the yacht to another EU country instead of Poland, there’s a chance you will need to pay VAT in that country. Keep this in mind to avoid disputes with the local tax authorities.
Summary
So, when purchasing a yacht, make sure to check if it meets the criteria for being a new yacht according to the VAT Act. Regardless of whether you are a business owner or not running any business, you may still be liable to pay VAT.