Tax free flag options - repost!

[Ric]

I posted a few days ago (on practical forum) enquiring about my options for buying a boat tax-free. I didn't get an overwhelming response (apart from one helpful suggestion to investigate a Gibralter flag). I think maybe it was because I didn't phrase my question very well.

My situation is as follows. I am a kiwi living in France. I wish to buy a rugged cruising boat (aluminium, centreboard French go-anywhere type boat) to sail back from Europe to the antipodes - either NZ or Australia - where I will settle for a while at least. There is a serious disadvantage to buying a second-hand boat in Europe, as the second-hand price here in Europe will reflect the VAT the first buyer has paid. When I arrive in Australia or NZ, the VAT will not be recoverable, and I will have to pay a wacking fee in sales tax (antipodean equivalent to VAT) to import the boat. The economics therefore point to buying a new boat free of VAT, then paying the Aus/NZ sales tax before I set out. If I knew where I will end up, this would be the solution. But I am not yet sure! I will settle wherever I get a job - going by boat allows me the freedom to take my home with me.

I am therefore looking at the option of buying the boat VAT free under a temporary flag of convenience (eg Gibralter?) then sailing until I decide to settle, then paying the relevant tax then.

What do others advise? Is there a better solution?

<hr width=100% size=1>

 

[MainlySteam]

Not too familiar with the situation in the EU but going by the comments of another forumite who I suspect knows very well the issues, then I believe that it is not worth while unless it is that you are looking in the super yacht class. That is certainly so for the rest of the world if one is looking for tax free flagging.

Have you considered flagging it in NZ - I do not think you have to pay the GST until you actually enter it here (assuming that you ever did enter it here) but customs here could tell you that - they have plenty of experience with it. You need an address in NZ for the registration, but that can be an accountant, lawyer, family (we used my mother's address for some years) or whatever. I do not know what the time allowed for temporary entry into EU countries is for non EU flagged vessels and any time limits per year, but given how easy it is to come and go from there maybe that is no problem. NZ boats seem to have no difficulties staying around there for years.

With respect to entering the boat eventually in NZ or Australia, NZ has a policy of not charging any taxes on the boats of immigrants. Being a NZ'er that obviously does not apply to you, but if the boat is held in the part ownership of a non NZ partner who immigrates with you (your share has to be the majority if to be registered in NZ) then it may be that their share does not have taxes levied on entry - don't know that, again customs could advise.

If you end up in Australia, then without the expensive problems of putting the boat into the ownership of a local company, then I believe that it will not be able to be registered in Australia until citizenship is obtained (5 years I think), should it need to remain on a register if you contemplated further international voyages. Whereas on the NZ register it can stay there forever once the Australian GST is paid - plus you may have the length of temporary entry (1 year I think or until you start employment) before the GST would be payable, your being a NZ "visitor".

If interested details at <A target="_blank" HREF=http://www.msa.govt.nz>http://www.msa.govt.nz</A> if you have not looked already.

John

<hr width=100% size=1>

 

[Ric]

Thanks for that idea.


It would be relatively painless if I can buy the boat in France free of VAT, flag it immediately under NZ ensign, set off, then only pay the GST and duty on arrival in NZ (or Australia, should I end up there).

And certainly I will bear in mind your idea of part-ownership should I meet some nice young lady on the way...

I've emailed the very helpful NZ customs and excise, and hopefully they will let me know the best solution.

<hr width=100% size=1>

 

[MainlySteam]

Wanted: One nice young lady. Must not be a NZ citizen. /forums/images/icons/smile.gif

John

<hr width=100% size=1>

 

[mocruising]

I just bought a VAT free cruising boat 46' (June) and plan to export it by sail as I live and work outside the EU. You just have to look out for them looking at aluminium only might limit you further but there are plenty about but watch out for ex charter boats. If you need more post me.

<hr width=100% size=1>