Yachts that are owned by non-EU residents and registered outside the EU are permitted to cruise EU waters for private purposes free of VAT. Generally a formal application must be made for a Temporary Importation (TI) Certificate. This allows the boat to cruise EU waters for a maximum of 18 months and move between EU member states without further customs formalities. TI relief is invalidated if the boat is hired, sold or put at the disposal of a EU resident.

At the end of the 18-month TI period, the boat must be sailed to a country outside the EU or VAT must be paid. Anyone intending to import the boat should review the different VAT rates across EU member states.

The TI period may be extended, at the discretion of local customs, for legitimate reasons – if the boat is left unattended and unused while the owner leaves the EU, or if the boat is left in a boatyard for repair. In such cases, the ship’s papers must be deposited with the local customs office, which will put the vessel under bond.

Yachts that are owned by non-EU residents and registered outside the EU are not limited to a single TI period. The yacht can be sailed out of the EU and, if it is sailed back again for another holiday, a new TI period can begin. The customs rules do not provide for a “minimum period” during which the goods must remain outside of the customs territory of the EU.

The legal provisions on TI are set out in Articles 137 to 144 of the Customs Code (Council Regulation (EEC) N° 2913/92 of 12 October 1992 establishing the Community Customs) and specifically in Articles 553 to 562 of the implementing provisions of the Customs Code (Commission Regulation (EEC) No 2454/93 of 2 July 1993).