Dual Nationality and Import Duties

[SydneyTim]

I am dual English/Australian citizen and my wife is dual Canadian/Australian and we were gettinga bit concerned as we planned our circumnavigation as it appeared that dual nationals got a hard deal on import duties.

Australian Customs told us that as we were Citizens of Australia we would have to pay import duty as soon as we set foot in Australia even though the boat is UK registered and we only plan to stay for a few months. I had read on the board here that Canadians can similarly get slugged as they are not allowed to sail a foreign flagged vessel in Canadian waters.

I did some follow up research as I didn't want to have to pay 3 import duty 3 times!

There is good news in the form of the UN Treaty called the International Customs Convention On Tourism which protects the rights of people touring. Under this you are exepmt from paying import duty on your vessel if you are a tourist, which boils down to not being ordinarily resident in that country.

I subsequently rang back Australian Customs who grudgingly admitted that as long as we weren't ordinarily resident they couldn't charge us duty even though we own passports from Australia. Canada and The UK are also signatories to the treaty.

Obviously we still have to see how this works in practice, but if anyone wants to charge you import duty for a short stay refer them to this and they may change their mind.

[GordMay]

U.N. Convention Concerning Customs Facilities for Touring

This agreement was the final act adopted by the UN Conference on Customs Formalities for the Temporary Importation of Private Road Vehicles and for Tourism (New York, 1957). To facilitate international tourism, the parties to this agreement permit tourists to import their personal possessions, such as clothes, jewelry, sports equipment, etc., free from customs duties.

Goto:
UN: http://www.unece.org/trans/conventn/Touring-1954e.pdf
AU: Convention concerning Customs Facilities for Touring, as amended 6 September 1966 [1967] ATS 1

[Pblais]

The one issue that can come up is related to how long you stay in one place. Here in the US it comes up in many states along the coast as the states collect excise tax (sales tax). This is unrelated to customs duty. You can end up in a situation where they demand the excise tax and you have to prove you don't have to pay it. It's the one area in US law that is counter to most thinking. You are presumed guilty (you owe the tax) until you prove yourself Innocent when it comes to paying taxes. They don't have to prove you owe it before they try to collect it or issue police orders to detain you.

At the very least you would do well to keep all receipts from the places you go to establish proof you were not in the locality that is demanding tax or at least establish a window of when you arrived there and if you left and came back. It also means that you need all your ships and personal papers in order 100%. Many times immigration won't ask to see everything but if you get in a tax situation you'll need it all in order else they nail you with penalties on top of the tax mostly just because they can.

Getting trapped in a tax situation is not easy to resolve after it happens and should they do something wrong you may have to incur many expenses and delays without any recourse from a wrong action on their part. Should you get information ahead of time the fact that they now are demanding tax is of no benefit. Just because someone else told you something would not mean that it would put off some other official that is now demanding payment of tax. In that way tax collectors are basically above the law. They tend to operate that way universally.

Citing UN Customs agreements to a local tax collector really won't get you out of the problem quickly. You'll have a fight in most cases once they decide to come after you - even if you later win without penalty. They will take a "prove yourself innocent approach". At least if you committed a serious crime the process would be one of them proving you guilty before they sent you to jail. Instead of: "You owe us this tax and why did you not pay it before we caught you. We really don't care that you asked before you came here. We will need to compute the penalty fees in a few days."

I hate to make it sound so bad but should you find yourself in such a situation I think it is best to understand how tax collectors differ from police. You would be wise to get legal counsel as as soon as possible. It would be nice if you could get a written statement you could pull out and show someone that was giving you a hard time but I have never heard of such a thing.