Do you want to buy a boat abroad? Find here everything you need to know from a fiscal and bureaucratic point of view on buying a yacht or a boat in Europe.
What should you pay attention to when buying a boat abroad?
If you want to buy a boat abroad, first of all you should determine wether the boat is placed in a UE-Country or not.
In case the boat is placed in a UE-Country and it is not subject to registration, then the purchase will be very easy, thanks to the European principle of free circulation of goods.
In case the boat has been registered, the purchase will be exempt from VAT between taxable persons. In case the boat is owned by a company, instead, it will be subject to the VAT rate of the company's original country.
The standard Italian VAT rate of 22% will be anyway applied when the following conditions are met:
- Territorial condition: in case the purchase takes place within the Italian territory;
- Subjective condition: according to which the natural or legal person selling the boat is acting as a business undertaking, that is it habitually carries out commercial activities.
- The situation is different if the boat is placed in a non-European country. In this case its transportation to Italy is comparable to an import procedure involving the payment of a VAT of 22%.
Since recreational crafts must be registered in ship registries, in this case the Bill of Sale should be translated and legalized in the foreign country, paying particular attention to certificate of deletion from the previous registry, which has to be translated and legalized as well.
Buying a boat abroad: MYBA MOA e BILL OF SALE for a boat transaction
The M.O.A. and the Bill of Sale are essential documents for purchasing a boat abroad.
More in detail, in the M.O.A. (Memorandum of Agreement) the terms of the sale contract (such as price, boat description, date of delivery, surveys, and other clauses protecting the interests of the parties) are set forth. The M.O.A. also includes standard clauses governing rights and obligations of the seller and the purchaser, as well as general sale conditions.
A Bill of Sale is a legal document made by the seller to a purchaser and is aimed at certifying the transfer of ownership.
Here are the main components of a boat Bill of Sale: details about the boat features, personal data of the seller and the purchaser, assurance that the boat is not subject to any liens or encumbrances.
A Bill of sale is only valid when it is signed by the shipowner and the signature is authenticated by a Notary.
Buying a boat abroad: why the MOA is essential for buying a yacht in Europe
A M.O.A is a binding legal agreement between the parties.
It is a standard format, which can be personalized according to the needs of the seller and the buyer, as well as according to the kind and the size of the the boat to be purchased.
Usually, at the moment the MOA is signed a payment on account amounting to 10% of the total price must be made, while the balance must be paid upon delivery.
For its part the seller will have to deliver the buyer all the documents he/she needs to register the ownership of the boat in the registry of the chosen country, in compliance with local laws.
It is also worth noticing that a M.O.A. usually contains a clause providing for a technical inspection of the boat and a survey of its conditions. Since the boat will stay in possession of the seller until it is delivered, this clause is aimed at protecting the buyer's interests, guaranteeing that the boat status remains the same as it was at the moment the inspection was carried on.
Here are other clauses of a standard MOA:
- a condition of the sale is the positive outcome of surveys or maintenance work carried out by the seller before delivering the boat;
- inventory of all elements included in and excluded from the sale;
- assurance that the boat is not subject to any liens or encumbrances;
- consequences of any non-compliance with the terms of the agreement;
- dispute settlement tools.
Buying a boat abroad: how to register a recreational craft in a foreign registry
The United Nations Convention on the Law of the Sea, signed in Montego Bay on 10December 1982, regulates the rights and obligations of different countries for the use of seas and oceans.
The Convention was signed by 164 countries, among which Italy as a ratifying country.
Thanks to the Convention all European citizens have the right to register their recreative crafts in the ship registry of any Member State, allowing navigation even in international waters, without any limit from the coast (Article 90).
Buying a boat abroad: how we can help you
The Arnone & Sicomo international Law Firm has a maritime and navigation law department, providing legal assistance in the field of yacht purchase to both foreign and Italian clients.
We assist our clients with negotiating the agreements for the sale and purchase of yacht in Italy or abroad, as well as with drafting transfer of ownership agreements.
We advise our clients on how to fulfill tax obligations in order not to be sanctioned with criminal or tax penalties by Italian or foreign tax authorities.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.