25% import tariff on yachts from USA

[westernman]

My understanding is that this applies to any yacht bought in the USA, new or second hand - even if it was originally made in Taiwan (which is the case for many so called American brands).

Could this be avoided, by doing the transaction outside USA waters - e.g. in the Bahamas?

Could this be done with the boat sitting in the dock in Florida or would the boat need to be physically sitting in the Bahamas?

What if it need to be sailed back to Florida for transport to (Dockwise or similar) to Europe?

What if I registered a company in the Cayman Islands?

Does it make any difference where the boat was built or commissioned (many US boats are built in Taiwan but final commissioning is done in the USA)?

Who knows?

 

[Hoolie]

It's a Donald Trump wheeze to make US products unaffordable throughout the world. Wait till he's unelected ...

 

[Lucy52]

At the end of the day I think it would be a non starter, you would need to change the country of registration which could incur another lot of tax and duties. Would your Nigerian Brother be able help you, no?

 

[richardjacobs]

I’m no expert, but I recently explored this. It doesn’t matter where the sale happens. When you physically bring the boat in to Europe, you have to declare the “Country of manufacture”. If you, or the original owner, bought it from an American manufacturer, I would expect it to be considered American. It doesn’t matter where they make the components (large or small).

If they really make the whole thing in Taiwan, then maybe you can buy directly from the Taiwanese factory, without any US involvement. I imagine that this could be set up, but I doubt that any American manufacturers have done so.

And don’t forget the VAT, which also has to be paid on the tariff, unless you’re a business (So it’s really a 30% tariff). Then you need to make sure that the vessel complies with the Recreational Craft Directive, which is not a given even for new US boats. In the UK It is a criminal offence, with potential for imprisonment, to import a boat that doesn’t comply.

I was looking at a boat in Turkey, that had not been in the US for 15 years. I decided that there must be a boat for me already in Europe.

 

[westernman]

I’m no expert, but I recently explored this. It doesn’t matter where the sale happens. When you physically bring the boat in to Europe, you have to declare the “Country of manufacture”. If you, or the original owner, bought it from an American manufacturer, I would expect it to be considered American. It doesn’t matter where they make the components (large or small).

If they really make the whole thing in Taiwan, then maybe you can buy directly from the Taiwanese factory, without any US involvement. I imagine that this could be set up, but I doubt that any American manufacturers have done so.

And don’t forget the VAT, which also has to be paid on the tariff, unless you’re a business (So it’s really a 30% tariff). Then you need to make sure that the vessel complies with the Recreational Craft Directive, which is not a given even for new US boats. In the UK It is a criminal offence, with potential for imprisonment, to import a boat that doesn’t comply.

I was looking at a boat in Turkey, that had not been in the US for 15 years. I decided that there must be a boat for me already in Europe.

For new it is clear. The idea I am toying with is a second hand boat from an "American" company which has the boats built in Taiwan.

The design, sales and marketing is all US based, and all the manufacture is done in Taiwan.

 

[richardjacobs]

It sounds like an American boat to me. The only body I would trust for an opinion otherwise is HMRC. I found their "Pleasure Craft Unit of Expertise" (pleasurecraft.lcsouth@hmrc.gsi.gov.uk) very helpful.

 

[Walther]

For new it is clear. The idea I am toying with is a second hand boat from an "American" company which has the boats built in Taiwan.

The design, sales and marketing is all US based, and all the manufacture is done in Taiwan.

Hylas? Those are nice boats.

 

[BelleSerene]

For new it is clear. The idea I am toying with is a second hand boat from an "American" company which has the boats built in Taiwan.

The design, sales and marketing is all US based, and all the manufacture is done in Taiwan.

You still haven’t said, but now you have strongly implied, the one thing that matters - where is the boat currently registered? You’ve said where it was manufactured, which is irrelevant as you’re not buying it straight from there. You’ve said where its manufacturer did their marketing, which may be relevant to the tax residency of its marketing employees but not to the boat. I think we can put 2 and 2 together to figure the boat has been sailed and registered in the USA for some time, which is why it’s second hand and why you mention various American locations? So that’s an American boat which you are considering importing into the EU.

Perhaps there’s a minimum time the boat could now be registered somewhere else outside the EU, such as Guernsey or Jersey, from where you could buy it without the tariff on importing American boats applying? Perhaps she could be transferred and registered there by you or a company you set up, or a friend or family member? Tranona of this parish is brilliant on these matters.

VAT is going to apply anyway, at the rate of whichever EU country you first import the boat into, but I guess you’re aware of that. If you did arrange for the boat to belong and be registered somewhere else between its current US registration and its future UK registration, then who knows, you might buy it from the intermediary for less than they paid to the current US owner. So the 17.5% VAT on importing to the UK would be payable on a smaller sum.

You’ll also have to pay someone to do a Recreational Craft Directive survey on her and make her comply with all its little rules. You could take a view on this for your own use, but whenever you sell you’ll need it, and it’s a criminal offence not to have it, and the liability remains with the original importer (you), even after the boat is sold and resold. The RYA can help you with that.