Our free ride was over. For 15 years, my partner, Brian, and I had been taking summer cruises in Europe and leaving the boat wherever we ended up, while at the same time watching the EU take shape and waiting for it to notice us and sic its tax machinery on us. Occasionally, we dared to hope we’d simply grandfathered the whole rulebook–but no.
The letter from the French Customs Service came in October 2002: Get Clarity out of the European Union by February or else. It didn’t mention the option of paying the Value-Added Tax (VAT), simply threatened fines if we overstayed, and customs had decided to start the 18-month clock ticking back in July 2001. We had just four months left.
I subsequently spent the entire winter chasing up blind alleys, at first in search of a comprehensive set of regulations and later for any scrap of information that would help me know what to expect when the time came to engage the bureaucracy. What appears below as apparent officialese is how I imagined the regulations would be written, should I ever discover them.
The European Union limits the stay of non-EU-flagged boats to a total of 18 months in all EU waters, after which the vessel must either leave or pay VAT plus import duty at the rates prevailing in the country where the payments are made. Alternatively, if the vessel leaves and visits a non-EU port, it may then return to the EU for another 18 months.
I briefly envisioned getting a leave of absence from work in order to put to sea in February. But even a mid-winter dash to Tunisia would earn us only one free summer of cruising before we’d have to devote another summer’s cruise to sailing the several hundred miles to exit and re-enter again. Nor was the alternative appealing. VAT plus import duty could amount to a quarter of the boat’s value, and we had no idea what value would be declared for a 23-year-old one-off boat. We needed more time.
I called the sympathetic manager of our boatyard. She puffed herself up to formidable mode and called la douane (customs) to demand a six-month extension, which was granted. We were safe until my normal arrival in the summer. Thus began a winter of fretting while trying to obtain reliable information.
My painstakingly crafted letters to la douane, pleading for guidance as to how the process would go, brought opaque form-letter replies. Close scrutiny (including faxing them to French friends for translation) revealed the need for a valuation survey.
In order to establish the value of the boat for taxation purposes, the boat owner must furnish the authorities with any relevant documentation, such as purchase records, builder’s contract, government tax records, and so on, and must arrange for a professional valuation survey to assess current value.
But in which country would we undertake all this? Jimmy Cornell, a CW contributing editor who apparently thinks nothing of sailing a few thousand miles to score a bargain, helpfully e-mailed me VAT rates for various countries, and he recommended Ma-deira, Portugal, as the cheapest. We considered Spain, which has a VAT rate lower than France’s, but for all I knew valuations might be significantly higher there, erasing any benefit. We decided to stay put and take our chances. The French agency that has been doing our periodic insurance surveys for years agreed to do the valuation survey, but it had never helped a client through this process and had no idea what would happen after that.
I arrived in France in July with every remotely relevant scrap of paper Clarity had ever generated, including copies of ancient Cruising World articles, proving we’d been in the EU for well over a decade, and the yellowing builder’s contract, with the all-important bottom line on the last page.
Usually, on arrival, I embark on an immediate, vigorous clean-up of the winter’s mistral-driven grit, but this year, Clarity needed to look derelict for one extra day.
The next morning, as arranged, the surveyor arrived. George was one of those brisk young professionals whose crisply-ironed shirts withstand historic heatwaves. He ascended the ladder, stepped gingerly through the filth and artfully tangled rigging of the cockpit, and joined me below for our conference. I’m so proud of Clarity, so used to extolling her virtues, that I felt like a cad pointing out her shortcomings–her lack of refrigeration, hot water, pressure water, roller furling; every trace of wear and tear–as though following the advice of a shady divorce lawyer. Finally, I took a deep breath and told George what I wanted: a valuation fixed at half her original cost. His response was a thoughtful, cryptic smile.
For the next two days, while he wrote up his report, I fidgeted; thousands of VAT dollars hung on his assessment. I passed the time by calling the nearest customs office, in the neighboring town of Port de Bouc, to see whether they could handle this sort of affair. Despite having sent that original letter in October, they said no, that I would have to go to the regional office in Marseille to file a request for a jauge (admeasurement) with the Service de la Jauge in that office. I groaned, picked up a train schedule, and called the Marseille office to make an appointment. They said nonsense, I could pick up the request form in the Port de Bouc office and mail it. I was clearly the guinea pig for this whole procedure.
When George arrived to deliver his report, he seemed to want to hand it up to me and leave, which worried me. I invited him for coffee. Glancing at his watch, he climbed the ladder. Did he notice how Clarity now sparkled? I flipped nervously through the pages, and finally came to the valuation: He’d done exactly as I requested. I let out a huge sigh of relief. He must have thought my smile too conspiratorial. “No, no,” he protested, “it simply worked out that way when I did all the calculations.”
I interrogated him about how the rest of the process would go. He didn’t know but made cell-phone calls to various friends, grimaced on hearing that I might have to bring the boat into conformity with the famously detailed French safety standards, then relaxed when someone else told him I wouldn’t. Now that we were allies, he even offered to drive me to Port de Bouc for my first encounter with officialdom.
The Office of Customs will determine the boat’s taxable value based on the valuation survey and supporting documentation provided by the vessel’s owner.
Well, not exactly.
In Port de Bouc, the very official who’d set this whole pageant in motion with that first letter back in October glanced briefly at my plump dossier and looked up with evident satisfaction: “I can’t help you,” he said.
It turned out he was the same official who’d told me on the phone that I needed to pursue this in Marseille. I’ll call him Mr. Makes Everything Difficult, a product of the gene pool that spawns bureaucrats the world over.
“First you must go to a transitaire,” he said. “You’ll need to hire a broker to negotiate with the transitaire, who will collect the VAT and the import duty. There’s one in Fos, one in Istres.”
“You mean there isn’t one here in Port de Bouc?”
“Oh, yes, right there, on the other side of the canal.”
Across the canal, in a furnace of an office at the Auxiliaire Maritime, I met my transitaire. Patrick–blocky, red- faced, suffering with the heat–greeted me with a peevish look, as though my arrival were the last straw. Nonetheless, he promptly launched into my business, and I quickly realized that his peevishness wasn’t directed at me but was the demeanor of someone who’d been yelled at so often, so undeservedly, in his life that, ever fearful of rebuke, he’d become a fretful bumbler. While I sat, feigning calm, he contemplated my documents. He explored his software, emitted chuffs of frustration. When I sneaked a glance at his screen, I saw he was actually creating a table in Microsoft Word in which to enter the facts and figures of my case.
Within a mere hour or so, he’d accepted the surveyor’s valuation, calculated the VAT, ascertained that the import duty (which I’d been warned might be as much as 6 percent) would be 1.7 percent, and had come up with an overall bill far lower than what I’d feared. Such was my gratitude, I wanted to apply a cold compress to his sweating brow.
We’d reached the moment for payment. I took out my bundle of traveler’s checks, which in my planning had seemed like the best choice for a payment of an unknown amount in a foreign currency.
Patrick regarded this fresh challenge with consternation. He went for advice and returned to tell me that, because they were in U.S. dollars, I would have to go exchange them for euros. It was Monday, and all the banks were closed.
The next morning, I visited every bank in Port de Bouc; none would change traveler’s checks, except for clients–defeating the checks’ purpose, it seemed to me. I phoned the toll-free number on the check packet: American Express had no office in the region, not even in Marseille, the third-largest city in France–they were terribly sorry. I returned to Patrick and flung myself on his mercy. “I have the money, right here. You want the money. There must be a way.” He slunk off to his superiors, as though to the gallows.
He returned with le patron, a distinguished-looking gentleman who gave me an appraising look, offered his hand, asked me a few friendly questions about my favorite French ports, and agreed to call the agency’s bank. Fifteen minutes later he appeared with a yes, the exchange rate, and calculation of the dollar amount. I sat right down and signed the requisite dozens of checks, passing them to Patrick, who, under the boss’s watchful eye, laboriously inscribed each with “AUXILIAIRE MARITIME” in block capitals.
This major hurdle behind us, Patrick handed me the first official-looking papers I’d earned so far, one of which even said “Communaute Europeene” across the top.
Patrick insisted on driving me the two blocks across the canal back to la douane, where he gravely presented me to the counter staff as though I were his protege. A short, stout woman bustled forward to take charge, and I quickly understood Patrick’s plight in life. She glanced skeptically at his painfully achieved sheaf of paperwork and blared, “Yes, you have calculated the value, but not the Customs Office value!” Patrick absorbed this taunt with resignation. I groaned inwardly, dismayed that what had been so hard won could be so simply tossed aside.
But wait–she consulted a fat binder of tables and determined that, because of the boat’s age, the tax rate would only apply to 82 percent of the boat’s current value, a tax reduction of nearly 500 euros. Although this made no sense to me–wasn’t the purpose of the survey to determine the value now, at 23 years of age?–I felt myself begin to smile.
But wait again–they wouldn’t simply refund some of the money I’d paid only moments before across the canal. No, the refund would take about a month and would be a check in euros that I had no idea how I would cash.
I noticed a general stirring in the office. As usual, I was catching only a fraction of the rapid-fire Provençal that was flying about, but Patrick murmured to me that now came the viewing of the vessel. Three senior staff in one car, Patrick and I in another, drove in convoy to the boatyard.
When we got there, the three officials circled Clarity on the ground. I watched nervously as they exchanged what I thought were knowing glances. Was she too clean, too gorgeous? I encouraged them aboard, but only one even climbed the ladder for a peek into the cockpit. They were waiting to see which way the boss was leaning. Finally he said to me, “It’s a beautiful boat, worth much more than you are saying,”–he tortured me for a beat–“but OK.”
Yes! They departed, and I opened a Cotes du Rhone.
The next morning, I returned to Patrick, who’d figured out a way of giving me a cash refund. I thanked him and trudged back across the canal to present myself before Mr. Makes Everything Difficult and file a request for la jauge.
After VAT and import duty have been paid, the vessel’s volume must be measured to determine the amount of French annual navigation tax due. If it is a one-off vessel, the owner must request a measurement to be performed by the government measuring service. Any documents that may pertain to this measurement, such as builder’s drawings, specifications, etc., must be submitted with this request.
Mr. M.E.D. actually seemed surprised, and newly respectful, to see me back in his office, unaccompanied by a broker. He filled out the request form for me, drew up a list of possible documents I should enclose with the request, and assured me that, once I had applied for la jauge, I could safely head off on my summer cruise. I had already accomplished enough to satisfy any officials I might encounter while sailing; la jauge would take place after I returned. That afternoon I posted a fat packet to La Service de la Jauge.
Brian and I had a lovely cruise, and when we returned to the boatyard, there was a letter waiting from La Service de la Jauge: No measurer’s visit would be necessary; they’d used the plans to arrive at a volume, and they’d already sent the measurement certificate to the customs office in Port de Bouc. The next day, I returned to la douane for the last time.
Once the navigation tax has been fixed, the vessel is issued a Passeport du Navire Etranger (Passport for a Foreign Vessel), which allows the vessel indefinite free passage throughout the European Union.
Mr. M.E.D. calculated the tax due, wrote out his findings in longhand on the precious Passeport, hammered it with rubber stamps, shook my hand, and wished me bon voyage. Back at the boatyard, I waved the Passeport triumphantly at the manager, who let out a cheer. The office staff gathered for an impromptu celebration: Clarity’s Passeport was the first they’d ever seen.
A delicious final twist: Mr. M.E.D. calculated the navigation tax at 74 euros per year. Fair enough, I thought; I used to pay more than that to the state of Connecticut. But wait–this triggered another regulation: If the tax amounted to less than 78 euros per year, it needn’t be paid, ever!
Vive les regulations!
William Storandt is looking forward to a little more Clarity in his future, now that he’s dispersed the VAT cloud.