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bean_fidhleir

Horror Story: don't take a good fiddle through Germany

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Not at all. I never said she should not pay tax. I am waiting to see what will happen to her violin. I was just pointed out there were some exceptions to custom tax, and I would say that her violin was probably as important to her that a private jet could be to a billionaire... ;)

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Really, billionaire is the best explanation you can come up with?

Here's a clue: You pay VAT when you _register_ a vehicle. When you move (transfer residence) across borders you will have to register the vehicle.

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But suppose you sell it to someone else. Does that person have to pay the tax again? I believe that's what Anders is asking.

Yes of course. Value added tax is a tax payable on a sale.

However, second hand goods and antiques are covered by optional margin schemes in the UK for instance, whereby if you are VAT registered you can pay VAT on the margin not the total price, and you don't declare the VAT in the invoice. So the buyer receives an invoice which appears to be VAT-free. I operate this scheme. How a buyer who has bought something in the UK under this scheme can prove that VAT is paid when travelling to a country outside the EU is beyond me! I suppose the fact that I issue invoices which state "sold under the terms of the second hand margin scheme" and which give my VAT number might be sufficient.

Input tax is just a fancy name for value added tax or sales tax that happens at a border. Every time an item crosses an economic boundary in the context of a sale it incurs some kind of import duty, which in the UK for instance is 20% VAT, or 5% for antiques .... there is no standard, not even within the EU. In Austria it's obviously 20% and 10% for antiques.

Travelling across these boundaries with an item that you have bought and on which you have already paid VAT or an import tax does not incur an additional import duty, but you have to be able to prove this. Otherwise, what would stop me from flying to Norway with a Guarneri for instance, where the Import duty/VAT is 25%, and selling it privately so that the buyer can avoid paying tax? A random check would quite rightly lead to a prosecution or confiscation, certainly someone would have to pay the tax and I would most likely be fined.

In the case we're discussing, if the owner is Japanese, bought the item in Japan without paying any duty, and is now permanently resident in the EU for instance, then she is IMPORTING the violin (I don't know if that's the case or not). If she can't or won't pay to import it, the violin might have to be returned to Japan, at which point the Japanese authorities might well ask whether it had been legally imported in the first place. If she can prove that she paid an import duty in Japan or wherever she bought it, then I'm sure she'll get it back.

My first reaction to this story was shock, but on reflection there is a MASSIVE amount of tax avoidance that goes on. How else might this be policed? Is there a logical argument for making valuable instruments exempt?

The idea that this state of affairs is somehow down to German-ness is extremely insulting to Germany. Every instrument I sell to the USA is taxed on arrival, this tax being paid by the purchaser. If either I or the purchaser attempted to side-step this tax we would be breaking the law.

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Martin, we don`t want to cause confusion. If a private person sells the violin on, there is no VAT, people such as you or I who are in the business have to add VAT on the invoice, or include it without explicitly stating the amount, if it`s on the margin scheme.

The Topic here, is when a EU resident imports something from abroad, not if he/she is traveling. I posted a translation of the known details in post #11. The Frankfurt authorities appear to be of the opinion that input tax (fancy or not) was payable long ago when she originaly bought it to Europe and she has been walking through the green door, not declaring it ever since, hense the standard fine of the same amount as the evaded tax (€190.000).

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Yes of course. Value added tax is a tax payable on a sale.

However, second hand goods and antiques are covered by optional margin schemes in the UK for instance, whereby if you are VAT registered you can pay VAT on the margin not the total price, and you don't declare the VAT in the invoice. So the buyer receives an invoice which appears to be VAT-free. I operate this scheme. How a buyer who has bought something in the UK under this scheme can prove that VAT is paid when travelling to a country outside the EU is beyond me! I suppose the fact that I issue invoices which state "sold under the terms of the second hand margin scheme" and which give my VAT number might be sufficient.

Input tax is just a fancy name for value added tax or sales tax that happens at a border. Every time an item crosses an economic boundary in the context of a sale it incurs some kind of import duty, which in the UK for instance is 20% VAT, or 5% for antiques .... there is no standard, not even within the EU. In Austria it's obviously 20% and 10% for antiques.

Travelling across these boundaries with an item that you have bought and on which you have already paid VAT or an import tax does not incur an additional import duty, but you have to be able to prove this. Otherwise, what would stop me from flying to Norway with a Guarneri for instance, where the Import duty/VAT is 25%, and selling it privately so that the buyer can avoid paying tax? A random check would quite rightly lead to a prosecution or confiscation, certainly someone would have to pay the tax and I would most likely be fined.

In the case we're discussing, if the owner is Japanese, bought the item in Japan without paying any duty, and is now permanently resident in the EU for instance, then she is IMPORTING the violin (I don't know if that's the case or not). If she can't or won't pay to import it, the violin might have to be returned to Japan, at which point the Japanese authorities might well ask whether it had been legally imported in the first place. If she can prove that she paid an import duty in Japan or wherever she bought it, then I'm sure she'll get it back.

My first reaction to this story was shock, but on reflection there is a MASSIVE amount of tax avoidance that goes on. How else might this be policed? Is there a logical argument for making valuable instruments exempt?

The idea that this state of affairs is somehow down to German-ness is extremely insulting to Germany. Every instrument I sell to the USA is taxed on arrival, this tax being paid by the purchaser. If either I or the purchaser attempted to side-step this tax we would be breaking the law.

If you're going to post you have a duty to make sure your information is correct.

VAT rates differ by countries (and even by year). EU publishes rates of all member countries on the EUR-LEX web site. A customs agent has access to that very same information. You seem to imply there is a need for a standard. I don't see why it's necessary.

Without going into details I think I've figured out how Ms. Horigome got into her predicament and how she might have a plausible defense (subject to certain assumptions and specific info I don't actually have). However, your statements regarding importing the fiddle back to Japan makes no sense what so ever. She cannot retroactively import the fiddle back to Japan and pay the duty there because she is no longer in possession of said fiddle.

If you're a EU resident, and you bought the fiddle in EU, as long as you can demonstrate that, EU customs is unlikely to ask for proof that you paid VAT. It's only if you bought it from outside EU they are going to ask you to show that you've paid VAT.

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I don't get what you're taking issue with.

My position is the same as Jacob's .... if she didn't ever pay input tax and is moving the violin from one economic area to another then it's a fair collar.

I see no reason for standardized rates of VAT nor did I suggest or imply that this would be a good idea.

Otherwise we seem to agree completely. You take my statement about re-importing it to Japan (or "the far east") too literally - it was just a way of questioning whether the violin was ever "imported" in the first place. Lots of holes in the story ....

On a side-issue, the UK has provisions for temporary importation of articles required for professional use, and musical instruments are included in this. But you have to apply in advance, and there's quite a bit of paperwork - not sure if you have to pay a security or not.

My overall point is that people are over-reacting to this story. I think it's completely plausible that the German Customs are within their rights to levy import tax and a fine.

Anyone who travels with a valuable instrument and no paperwork is likely to get in a big mess.

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Martin,

The issue I have with your post is you're making statements that make zero sense. Jacob has already pointed out there is no vat on private sales (which was ander's original question, and la folia's follow-up).

Since you're are "in the business," of course you get to use VAT marginal scheme provided you meet all requirements. That doesn't have much to do with what ander's and la folia asked; they weren't talking about people in the business.

On top of this you make another indecipherable statement suggesting Ms. Hirogome could possibly re-import back to Japan and pay duties there.

Just because you agree it's a rightful collar doesn't mean you've correctly provided the answers to questions that other people asked, or what you stated is correct. There's enough other stuff to debunk without adding unnecessarily to it.

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Cool yur jets ....!

Of course there is no VAT on private sales between people in the same economic area/country.

VAT or import duty is charged on private sales that cross these borders. If Anders buys a violin from a friend in the UK (who is not VAT registered) he will have to pay 25% Import VAT when it arrives in Norway, assuming it's accompanied by an accurate declaration of value. Doesn't make any difference if it's a sale between friends or if he buys it from a dealer who is or isn't VAT registered.

In the case in question it makes no difference if Ms Horigome bought it from a private individual or a dealer.

In so far as people are worried about taking instruments abroad, it makes no difference if they were bought from a private individual or a dealer - the issue is whether they are being imported or not.

I'm sure you'll tell me if I'm wrong.

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Cool yur jets ....!

Of course there is no VAT on private sales between people in the same economic area/country.

VAT or import duty is charged on private sales that cross these borders. If Anders buys a violin from a friend in the UK (who is not VAT registered) he will have to pay 25% Import VAT when it arrives in Norway, assuming it's accompanied by an accurate declaration of value. Doesn't make any difference if it's a sale between friends or if he buys it from a dealer who is or isn't VAT registered.

In the case in question it makes no difference if Ms Horigome bought it from a private individual or a dealer.

In so far as people are worried about taking instruments abroad, it makes no difference if they were bought from a private individual or a dealer - the issue is whether they are being imported or not.

I'm sure you'll tell me if I'm wrong.

In fact you are wrong on this very post. Go do your own homework.

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But you're so keen to disabuse others of their erroneous notions - why single me out for special favour?

I really don't think it's helpful or informative (which I think you wish to be) to simply say "you're wrong!"

About what exactly?

We export and import dozens of violins a year to and from outside the EU, and I thought I understood the law. I don't like to think I'm labouring under some misapprehension ....

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Of course there is no VAT on private sales between people in the same economic area/country.

VAT or import duty is charged on private sales that cross these borders.

If Anders buys a violin from a friend in the UK (who is not VAT registered) he will have to pay 25% Import VAT when it arrives in Norway,

Martin, I take it that “cross these borders” means the external EU ones, not the internal. Norway isn`t in the EU, but is in the EFTA, so I`m not quite sure about their status re VAT, since I have never done business there. Otherwise I havn`t found your deliberate mistake yet. :rolleyes:

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Read this, not only the tabloids

http://ec.europa.eu/...on/index_en.htm

And here is the "ONLY" document to fill out before they leave the European-Union for travels who are citizen of any european country as Ms. Horigome is.

Available on every custom offices and on international Airports in Europe. Officers are kind to help, get your stamp,.....done.

When you come back in the EU just show it the customs.

Many people on other forums and mostly on Facebook find endless time to hammering on germans nose, but not ten minutes to inform and respond in an appropriate example.

0330.pdf

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And here is the "ONLY" document to fill out before they leave the European-Union for travels who are citizen of any european country as Ms. Horigome is.

Dear Michael,

(just checking that/if Maestronet works again!)

You are quite right that people only need that form if they are leaving the EU with, and returning with their violin.

Here, the question will be if Ms H. ever paid the input VAT (Einführumsatzsteuer) when she first brought the violin into the EU 15 years ago. I agree wih you generally about the “Bildzeitung” but they do quote the Customs-Spokesperson, Yvonne Schamber, who said:

“Ms. Horigome didn’t declare the violin correctly, and couldn’t provide evidence that it had ever been taxed in the European Union”, and that she “She must now beleatedly pay the Input Value Added Tax for Antiques

If it were the case that she never paid this import VAT, I can see no other way out for her, but to pay it now,+ fine,and hope they drop the charges of tax evasion.

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Dear Jacob,

in the case with Ms. Horicome there is a small difference in taxing. When you move into the EU all your relocation goods for household and daily things are free of taxing. Also her violin as long she use it for her profession. But for goods they are higher then 5.000 Euro you must fill out a paper when you move in the EU. That point she missed! So the customs have the right to think she bought it after she moved in.

Only official customs documents have validity!

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Dear Jacob,

in the case with Ms. Horicome there is a small difference in taxing. When you move into the EU all your relocation goods for household and daily things are free of taxing. Also her violin as long she use it for her profession. But for goods they are higher then 5.000 Euro you must fill out a paper when you move in the EU. That point she missed! So the customs have the right to think she bought it after she moved in.

Only official customs documents have validity!

Dear Michael,

You are presuming that she relocated to the EU after she purchaced the violin (Übersiedlungsgut). She seems to have been in the EU since about 1989 though, and have bought the violin as a EU resident, so the customs may well be quite right.

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Yes it would be.

And according to her own Web site, as of Jan. 2007 she had been married for 13 years. That would be 1993 or 1994, not 1989 as stated elsewhere. Also, some articles are stating that customs claims the violin was purchased 15 years ago, while a Japanese newspaper says 1986.

In spite of quite a bit of variation in reporting of the facts, some here are assuming that German customs is so efficient that they would quickly correct any mistake and render a decision with near 100% certainty, so Horigome must be guilty of tax evasion. Let's wait and see, shall we?

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Ask the custom if you can put a deposit to insure that you will take the object back out when you leave that country. There is no

business transaction involved just passing through. It makes more sense this way.

Once I took a violin to Taiwan, the custom looked at it for a long time. At last he let me go free because it is a "used" violin. No value so

to speak. Who would pay for an old violin like mine?

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Ask the custom if you can put a deposit to insure that you will take the object back out when you leave that country. There is no

business transaction involved just passing through. It makes more sense this way.

Once I took a violin to Taiwan, the custom looked at it for a long time. At last he let me go free because it is a "used" violin. No value so

to speak. Who would pay for an old violin like mine?

It is possible for an "Nachverzollung". But it works only for citizen they are live in the same country as you get in contact with the customs.

For this the customs make a sealed cord around the violincase and inform the inland customs in your near. Then you get an timespace to bring your violin to the office with all documents.

In the issue of Ms. Horicome it doesn`t work because she leaf the country over the border to Belgium and it would be no possibility to catch her. The europen union is although a custom union, but still very difficult of an transnational official act between the territorial countrys.

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