Schengen & IVA Rules
The following article was written in 2009, by two very active members of Lagos Navigators (Class of 2005!). Originally produced for “Flying Fish”, the magazine of the Ocean Cruising Club, David has agreed we can circulate it for our members who may be travelling east. It is particularly relevant for Americans and citizens of other non-EU countries.
SCHENGEN, VISAS & VAT RULES IN EUROPE
Janet Erken and David Heath
Janet and I had been cruising aboard “Alegría”, our homebuilt 38ft Ingrid cutter, for many years before crossing the Atlantic in the summer of 2005. We spent our first winter in Lagos, southern Portugal, our second in southern Spain, our third near Rome, and the winter of 2008/09 in Marmaris, Turkey. We feel that everyone was an excellent choice.
Like many Americans, we assumed that the European Union would be a large number of diverse countries but run under the same set of logical laws, uniformly and clearly enforced. Now our opinion is that, though it may be the same set of laws, they are interpreted, enforced and often ignored very differently from place to place, from person to person, and perhaps even from day-to-day. And keep in mind that the rules are different depending on your nationality, the country you are visiting, and probably other variables too.
After leaving the US and before sailing to Europe we spent some time in another country in the New World which had best remain unnamed. We enjoyed it very much, but one of the facts of life was that the laws were no more than a ‘suggestion’ to the officials. We quickly learned that a good working knowledge of what the law actually said, helped a great deal when an official thought we were newbies waiting to be plucked, but reality was only what you could work out with the person you talked to, at the time you talk to them – you never really knew for sure what was going to happen when you walked into an official’s office. But, over- all, it was a great country and our favourite so far in spite of the many ‘free spirit’ officials.
We were amazed to find that the EU is shockingly similar. But don’t be put off by this – we are having a great time
Schengen Rules for People
We, and most of our friends, have found that Portugal generally enforces the laws thoroughly and uniformly. Being very bureaucratic is not the worst that can happen.
We were told that as Americans we got 90 days in a six month period. After that we were allowed apparently unlimited – or least more than four in a row – 90-day extensions. In 2005 we paid 45 euros each for these, but shortly after that some friends were charged 80 euros each. First you need to find the correct office (no small trick), then prove solvency (via bank statements etc) and medical insurance or ample solvency, produce the correct sized photos, and finally spend about a day in line fighting the paperwork. We were also told that, while the ‘90 days in a six month period’ automatic visa for Americans worked for the whole Schengen group, we would need extensions in each individual country if we overstayed our initial time. In other words, our Portuguese extension only worked for Portugal. To travel on to Spain we would need a Spanish extension etc.
We also understood that, if we left the Schengen area at the end of our 90 days, when we returned we would start a fresh six month period and a new 90 days. This was confirmed by a Portuguese official, so at the end of the first six months we took a bus trip to Seville and Gibraltar (for about the same cost as the extension), and asked to have our passports stamped in Gibraltar to show that we’d left the Schengen area. On our return we continued to enjoy Portugal and, after 90 days, went in to buy our Portuguese extension, only to find that we were in Portugal illegally – a very bad idea.
This official assured us that the other official was wrong, but told us that since we had been given incorrect information by one of his colleagues there would be no fines this time. We were even allowed to buy another 90 day extension. We were also told that, if you buy a 90 day extension but can prove that you left Portugal two days later, the clock stops and you have 88 days left on your extension for Portugal to use at a later date. In fact we left Portugal later the same day, but I will not be surprised if, the next time we visit and want to use our remaining 89 days, we find that the rules have changed.
Spain and Italy
In 2006 Spain and Italy did not seem to enforce the 90 day period at all, but this may have changed. We were told (and believe) that the officials did not want to be bothered with paperwork for people who were behaving themselves. In other words, they don’t have a problem if you stay for several years, though at some point they may start wondering when you’re going to leave.
However, if you overstay in Spain or Italy and then enter a new Schengen country the second one may say that you are in trouble. This is made more confusing in that, as you go from country to country inside the EU, there is usually no border official to talk to. It is just like going from Texas to Louisiana – you just go. So it would be possible to be illegal for a long time and never know it, though if you returned to Spain or Italy to check out of the Schengen area you’d probably be none the wiser since they don’t care.
For Americans and, I think, Canadians, Greece has yet another interpretation of the 90 day Schengen visa. It was our understanding that, as Americans, we could stay for 90 days in Greece without a problem, even though we’d already spent weeks or months in Italy. However, to get an extension after 90 days in Greece is extremely expensive. We heard various rumours that it cost US $800 or US $1200 per person per month, and were also told (unofficially) that there were expensive problems if Americans left a boat in Greece for more than 90 days, even though they themselves had flown out.
It’s worth mentioning that in Turkey 90 days actually means 88, as they count both the first day and last days. Sort of like floors in buildings – go to England and the third floor is called the second floor. Isn’t travel broadening?
Where and When do You Need to Report to Officials?
Another confusing issue is where and when to check in as you move around inside the EU. It is our understanding, from talking with two different customs officials in Portugal, that you check into the EU at your first port of entry and, after that, one does not need to seek out officials at every new port to show them the papers. Of course the documents must be produced if anyone in an official capacity asks, and some did, but they stressed that it was not necessary to go looking for an official even when entering another EU country.*
* This may not be the case when moving from a country which is part of the Schengen area (such as Portugal) to one which is not (such as the UK), or vice versa.
Marinas always want to see your passport and boat papers, and may volunteer local knowledge about official rules. However don’t assume they are always correct – they can mean well but still be confused.
Reporting Rules as applied in Greece
Greece seems to have its own view on when to report. It is definitely necessary to check in at one of the several official ports of entry on first entry to Greek waters, even if coming from an EU/Schengen country such as Italy. As Americans we could not check in at Gouvia Marina, Corfu although EU citizens could and in 2008 had to go to offices at the south end of town, near the cruise ship area. We also had to buy a cruising permit or Transit Log, but the heavy fee previous levied on visiting yachts had been dropped. Then today I read that motor yachts of 10m or more and sailing yachts of 15m or more will be taxed to raise 60 to 70 million euros. This may only apply to yachts with marina contracts, but have a look – it may affect your plans. That is a lot of money to raise.
There is a lot of confusion within Greece as to where and how often you must check in at the various ports. We were told by the officials at Corfu that we only needed to seek out an official and check in at the large cities of Athens and Thessalonica. They were clear and firm on this and it sounded simple enough to us. But when we checked out of Simi in eastern Greece en route to Turkey, the lady said that we should have checked in about every twenty days for our own safety. We have no idea why that would have made anyone safer, and the fees that were charged were quite small so it was not that they wanted our money, but it was often a time-consuming hassle to find the correct officials and go from office to office in the prescribed order.
And remember that you see typically 3 offices when doing your papers in Greece. Some offices may “multitask,” but if seeing the officials, be sure to find the office that will stamp your Transit Log. One American frequently showed his papers to some official, but got no stamps and got yelled at as he left Greece for too few Transit Log stamps. I think he saw the Passport Police and it is the Coast Guard that stamps, but find out.
In Greece it seems that everyone has a different experience. Some Canadian friends were told they had to check in at every single place they stopped, which caused them a lot of effort and frustration and seriously lessened their enjoyment of the country. The crowning blow was to be threatened with a 1200 euro fine when checking out at Samos, because the official in Corfu had not stamped a Canadian woman’s passport when she entered Greece from Italy. After milking enough adrenaline from her, and since she was leaving for Turkey within minutes, he eventually let her go with a stern warning never to let it happen again. Knowing this, we asked the officials in Corfu to be sure to stamp our passports – but they explained that they could not, as we had just come from Italy. We made sure not to check out of Samos.
EU Rules for the Boat
Another issue which is often discussed and causes some fear among visitors to the EU is just how long a non-EU boat can stay in the EU without having to pay VAT. Everyone – or at least every official – should know by now that it’s eighteen months if the boat is registered outside the EU and the owner is not an EU resident. Even so, a customs official in Cyprus recently told a British boat owner that the maximum time was 180 days. That used to be correct, but I believe the eighteen months change came in 2001 so the official was very wrong.
If the boat is correctly put into bond and not used, non-residents can add up to six months for a maximum possible of 24 months. Several websites carry information on this topic:
These all agree that (a) the time limit is eighteen months, and (b) there is no set period during which the vessel must stay out of the EU before returning to re-start the clock. However it seems that a few officials still believe in the old ‘six months in, six months out’ rule, so it may sometimes be necessary to stand one’s ground.
While cruising during the winter months in the Med can be very nice, there can be long periods of very nasty weather. For this reason we have planned our ‘EU exit’ for the summer months. This means that we leave every ten to fourteen months instead of eighteen, but we prefer to pick our time and place rather than perhaps be forced into making a desperate run under questionable conditions. We found going to Morocco and Tunisia convenient when they were nearby, and they were interesting to visit. Some said that going to Gibraltar or Ceuta was sufficient, but it was simple and enjoyable to visit the nice marina at Smir in Morocco, and then we were certain.
Individual Country Taxes
We have been told that Portugal* and Spain, and probably many countries, may also tax you a percentage of the value of your vessel if it remains in their country more than 180 days in a calendar year, or in some cases 180 consecutive days. This is similar to many states in the US, where they grab you after 90 days. The percentage is said to range from 15% to 22% depending on the country. Although in practice it seldom seems to be enforced, it is another worry for cruising sailors who live in fear and in violation.
We were told that in Spain it was not how long the boat was there which mattered, but how long the owner was in the country. In theory, if the boat is there for more than 180 days and the owner cannot prove that he was NOT outside of Spain long enough during that time, he is consider to be resident and, if his boat is more than 9m long he will be obliged to ‘import’ it, which costs of 13% of its value, and then pay 11% registration tax. And to register a boat in Spain you need Spanish Coastguard approved safety equipment, your boat must pass a Spanish inspection, and you must gain a Spanish operator’s license – for which the exam is in Spanish!
Rumour has it that these rules were brought in to catch commercial operations – charter and hire fleets – and in the real world many EU and non-EU cruisers stay in Spain for years without problem. However they keep their ears to the ground, and generally after three or four years they leave for a year or so before returning. As always, some harbours are said to be relaxed, some rigorously policed – but things change, so get fresh information.
Spain also has two other, much lower, taxes on the rule book though neither seem to be enforced with any consistency. One is an annual ‘lighthouse tax’ (Tasa de Señalización Marítima) of 4 euros per sq.m. (LOA x beam); the other a ‘Recreational Vessel Tax’ which seems to be limited to marinas inside commercial ports and in 2008 was set at 0.0612 euros per sq.m. per day.
* Portugal does indeed levy a tax on all yachts (not just visitors) which remain in its waters for more than 183 days. In 2005, it was based on displacement, engine size and the age of the yacht, rather than its value, and is unlikely to exceed a couple of hundred euros.
LAGOS NAVIGATORS AMENDMENT; December 2009
The structure of the Boat Tax in Portugal changed in Jan 2008. It is now applied only to boats built after 1986 and with engine over 20 Kw. (26.82 HP). The tax rate is now based only on engine size – in 2008 it was €2.10 per Kw (1 Kw = 0.7457 HP). So, the tax roughly = €1.50 per HP.
We also obtained clarification that the 183-day rule applied only to a continuous period in any one tax year. So a documented absence of 3 days in early July will break continuity. Equally, the standard 9-month winter contract (mid-September to mid-June, will escape tax in both years.
Some General Guidance
Proving where you – and your boat – have been
In light of the Spanish tax described above, and other tax issues, it is well worth keeping airline and hotel receipts – and even airline boarding cards – to prove when you left and re-entered the country by air. It’s also wise to keep at least some of your marina, fuel dock and other boat-related, even restaurant receipts, to show where the boat was on that date. More than one boat has been able to refute a large tax, and/or fine, by being able to prove that they were out of the EU on a certain date. As well as the official paperwork, we kept our fuel dock and Marina Smir receipts from Morocco for several years.
At borders, you may want to politely ask for a stamp in your passport, but remember this will be impossible to hide. While receipts, etc may be shown or not, as you wish.
When the Official Hits the Fan
So, you do the best you can and you still are told that you are wrong? We always try very hard to never get into a test of wills with anyone in authority. A polite, non-confrontational: “Sorry! But I thought that…” or, and very, very politely: “I’m confused. Could you please show me where it says that in the law on the Internet?” are more likely to further your cause. Perhaps the links on the previous page may also help make your case. But DO let them save face. Even if you win, the next several poor fools in line will pay the price. And the next one might be me.
If, as an American, by now you’re thinking “how bad those other countries sound”, talk to a few foreign cruisers who have visited the USA – some have real horror stories. I have met high-ranking US Immigration Officials who are working hard to make the US laws fair and rational, but they have to hire humans to administer them and some of these people are much less reasonable.
Do Your Homework
Learning how to use Google and Wikipedia are important skills when cruising today, just as Astro-navigation was thirty years ago. Do you check Google Maps’ satellite images of the anchorages before you go? Try it – they may be several years out of date but they can be a wealth of local knowledge.
Similarly, research on the internet may also warn of changes to countries’ rules and regulations. Better to know the rules than be caught out by an unexpected – and often poorly publicised – tax or fine.
Janet Erken and David Heath
SY “Alegria”; November 2009