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A few years ago I managed the sale of a 25m motor yacht lying in
Greece for Syrian gent normally resident in Cairo but then living in
Athens. The yacht was registered in London, owned by a company
incorporated in Jersey but managed in the Isle of Man. The buyer
was a Cayman Island registered company managed in the Channel
Island of Sark but owned by a gentleman from Scotland.
Complicated? In fact it was one of the simpler transactions I have
managed in recent years because, you see, there was no VAT
involved.
Before we cast off on our voyage, please bear with me while I very
briefly explain.
That’s the background, so now let us start the voyage with full
bunkers and cast off from VAT free Gibraltar and travel around the
Mediterranean to see how successful the Eurocrat Directive has been
in achieving its objective.
Sailing East and North along the Spanish coast, a potential VAT
payer has a variety of opportunities to pay his tax which at 16% is the
lowest of all the European Union states with a Mediterranean
coastline. From Malaga to Barcelona, the local officials offer a
welcome and, because of the relative autonomy of the administrative
regions, negotiate happily on valuations. Beware however! Bandits
are alive and ready to strike when they spot an opportunity; I know,
I’ve met them and been a victim! There are highly experienced
practitioners in chicanery pretending to be authorised ‘customs
agents’, with official letter headings, impressive seals and even Bank
receipt stamps. Their only real skill is forgery!
Set an east and north course across the hazardous Golfe du Lyon
and take a bearing on the citadel at the entrance to Antibes in
France. French officialdom recognised, very shortly after the
publication of the Single Market Directive, that its rigid application
was not going to work to the advantage of the French yachting
industry.
3
Have they learnt, well some. Their aggressive bureaucracy, high tax
rate and sometimes hostile view of our industry, doesn’t make France
the first stop on the VAT/TVA payment tour. Remember, it was to
appease the French self regarding bureaucrats that the otherwise
valueless SSR or ‘Part Three’ was established.
Adieu to Antibes and sail East and a bit south to San Remo just over
the Italian border. In Italy, the national government issues laws and
edicts which, if they don’t suit local interests are either ignored or
subjected to local negotiation. There are concentrations of yacht
industry skills in Italy which have grown up around local families over
many generations. San Remo, Genoa, Viarreggio, Saboudia and
Naples to name but a few. The local government officials in these
areas have a close relationship via their families to the managers of
the local yards, port agents and marina bosses and this loyalty is
reciprocated.
4
Cast off, say ciao and sail out of Porto Sole and head south, avoiding
northern Corsica. Rumour has it that Douaniers who cross their
seniors in Paris are given a choice; either join the French Foreign
Legion or get posted as Douaniers in Cap Florent!
Leave Sardinia and Sicily to port and sail to Malta. Till 1992, duty free
fuel and negotiating freedom was the norm in this historically yacht
friendly Island. Then, the presiding Socialist administration threw their
lot in with Brussels. If you were one of the unfortunates whose yacht
was in Malta at midnight on the 31st of December 1992, you were
treated as an enemy alien. No matter how long you had had your
yacht in Europe, no matter how old it was, no matter where you were
resident and no matter whether you had already paid VAT/TVA/IVA,
the moment you departed Malta for any other member state of the
European Union, a new tax liability arose. Anyway, re-fuelled, bid
farewell to Malta and head for Greece or more precisely, Rhodes.
Anecdotal evidence suggests that Pireaus and the Islands are not
good locations for negotiating tax payments. There remains a streak
of national introversion first experienced by the yachting industry in
1973 when the Colonels took over. Previously mentioned flag and
tonnage laws were activated and a flourishing yachting industry,
which at the time was attracting billions of dollars of investment in
new marinas and yard facilities, was decimated with the fleets
disappearing overnight.
5
The end of the voyage then and by now you will have a view as to
whether Brussels is succeeding in its drive for standardisation.
Whether you do or you don’t, you can be sure that our Euro-
nincompoop bureaucrats will continue to issue edicts with scant
regard for their impact on you and me. By the way, thanks Ted!
Arem Tee