The EU has lifted the 25% customs tariff on the import of US-origin yachts and boats into the EU with effect from 1 January 2022. Unfortunately, at the moment the UK continues to impose the 25% customs tariff on the import of US-origin yachts and boats into the UK.
A deal was agreed between the US Government and the EU Commission last Autumn to remove steel and aluminium tariffs. This opened the way for in the full removal of the 25% retaliatory tariffs imposed by the EU on American-made boats and engines entering the EU. It has been estimated that the tariffs resulted in a 50% reduction in US exports of yachts to the EU with the loss of hundreds of millions of dollars in revenue.
These tariffs were introduced by the EU in the summer of 2018 in retaliation for the tariffs introduced by the US on the import of EU steel and aluminium products. They applied to the import into the EU of US-origin new and second-hand yachts and boats, and a wide range of other marine products.
There has been speculation on the removal of these tariffs by the UK. However, the UK decided to retain the tariffs and, for the time being, the tariffs continue, with the 25% tariff on US yacht imports still applying to imports into the UK. It seems likely that the UK will remove these tariffs before too long. So, if there is a desire to import a US boat into the UK, it might be sensible to wait or to import the yacht into the EU in the first place under the 18 month temporary admission rules in the hope that the UK tariffs will be removed.
VAT is also still payable on the import of US yachts into the UK and the EU. This is particularly punitive as the VAT is calculated as 20% of the value of the yacht together with the 25% tariff - resulting in an effective VAT rate in these circumstances of 25% and a total of 50% of the value of the yacht payable in the combination of the tariff and the VAT. Also, this will be UK VAT which will not count towards the EU “Union-goods” status of the yacht. This means that if these yachts subsequently enter the EU, EU VAT will be payable unless the 18-month EU Temporary Admission arrangement can be claimed. This provides for entry of the yacht into the EU for an 18 month period before EU VAT becomes payable, assuming that the owner is UK resident and the yacht is operated on a non-commercial basis.
Irrespective of whether the yacht is imported into the EU or the UK, compliance with the Recreational Craft Directive requirements will also need to be considered on an import of a yacht from the US as it is very unlikely that a US built yacht will have been manufactured to meet UK or EU standards. This brings in another level of complexity as the UK and the EU are now separate RCD territories.
9 March 2022
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