Chain sales of yachts and intra-community transport implications

05.2015

With the economic crisis receding, issues relating to yacht sales are likely to resurface. A Spanish Supreme Court judgment of 4 March 2013 examined a case in which a German company sold yachts to a Spanish company, which then resold them to another German company before a final sale to a customer in Spain. The second sale by the Spanish company to the second buyer was invoiced without Spanish VAT, on the basis that the yachts had not yet entered Spain. The Spanish tax authorities argued that the yachts had already been transported to Spain, triggering VAT liability at the point of sale.

Interestingly, the judgment did not consider the perspective of German VAT law. Had the Spanish company been correct in treating the goods as outside Spain, any non-charging of VAT on the second sale would constitute a German VAT issue. In other words, the Spanish authorities’ approach could have created a cross-border compliance conflict.

++ Published at the tax newsletter of the German Chamber of Commerce in Spain related to VAT news ++