We have been requested to import two yachts under the returned goods relief (importation under VAT exemption subject to a set of conditions). These two yachts were registered under the UK flag which became a non-EU flag following Brexit on 12.31.2020. The two yachts were considered VAT paid since 2018. EU VAT paid vessel outside of the EU on 12.31.2021 are deemed to have lost their EU VAT PAID status unless they can benefit from the returned goods relief which conditions are:

• Coming back in the EU within 3 years since the last presence in the EU
• The ownership shall not change between the last presence in the EU and the date of the return
• No substantial modifications shall be performed on the yacht between the two above dates.

These two yachts had left the EU, without temporary exportation, in 2019 and were willing to return in the EU in 2021. The lack of temporary exportation was perfectly understandable because it was not requested for EU flags and, in 2019, UK was still part of the EU.

Nonetheless the French customs were initially not keen on issuing an authorization for these yachts. They were arguing that these two yachts had left in 2019 without carrying out the proper formalities and, surprisingly, that they were not present in the territory of the EU on 12.31.2020.

We argued, in our reply, that the returned goods relief was available to yachts returning in the EU within 3 years since their last presence in the European territory (moreover, the ownership had not changed and no substantial modifications had been performed). As we said above, these yachts left in 2019 and were willing to come back in 2021, thus less than 3 years had passed. We also argued that demanding their presence in the EU on 12.31.2020 made no sense as, if that was the case, they would have kept the benefit of their EU status without needing to request the application of the returned goods relief.

After several weeks of back and forth arguments, the customs finally gave us the authorization to import these two yachts.

Do not hesitate to contact us should you experience a similar situation.

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