There is, and has been for some time now, uncertainty over the subject of import Value Added Tax (“VAT”) as it applies to non-EU flagged commercial vessels that have been VAT accounted-for and operating in the EU, and who have then sailed out of EU waters and wish to re-enter Spanish waters and retain their VAT accounted-for status.

It would seem that the Spanish authorities (including the Balearic Islands Customs Office), stringent application of the law requires that these vessels be treated as new imports, unless prior to leaving the EU customs territory, a return goods relief (or export) document is completed and filed with Customs.

The confusion that has arisen is not because of the law itself, but because of the scope of its applicability and enforcement. Some member states of the EU do not apply the law in the same way as Spain does and in certain member states the export document is considered unnecessary.

The interim solution is to abide by the principle of “when under Spain’s overhead compartment, Spain’s rules apply”.
Network is collaborating with EU Customs experts who have developed a mechanism in which a non-EU, VAT accounted-for, commercial vessel can leave the EU and re-enter the EU (within three years) with its VAT accounted-for status intact. Whilst the solution that Network offers is not a mandatory one, it has been devised with the intention of offering non-EU vessel owners peace of mind when leaving and returning to the EU.

At the time of writing this article, a new EU Customs Code is in place, which will come into effect early next year. It remains to be seen how each Member State of the European Union will implement the terms of the Code. We will keep you posted on any developments in this regard.
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