How skip VAT?

[David_Old_Jersey]

Originally Posted by TaoJones

Sorry, DOJ, I should have said "the best such professionals in Europe are usually to be found in Switzerland and Jersey."

TaoJones

You are spot on that anyone seeking this sort of advice should research the subject before seeking advice which costs £££ / $$$ so you know what you need / want........and to research who you are dealing with before parting with money - or the Registration of yer boat!

I do not claim to be a "professional" more a "jack of all trades" , but one who does know when to call a proffesional..........and that proffessional is rarely in Jersey! - first stop for Tax advice is London, the safest place (for various technical and non technical reasons) for "stashing yer cash" is, has always been (and I suspect always will be)...........Switzerland - but not exactly cheap to do business in / with - hence places like Jersey / Caribbean etc.

Actually, have been thinking of relocating to the Land of Cuckoo Clocks for a few years - but a bit of a short coastline though .

And I have recently had an idea for a cruise around Europe by canals - not for tax purposes though!

[TaoJones]

Originally Posted by David_Old_Jersey

Actually, have been thinking of relocating to the Land of Cuckoo Clocks for a few years - but a bit of a short coastline though .

Short coastline?? Switzerland?? The home of the America's Cup??!!

And I have recently had an idea for a cruise around Europe by canals - not for tax purposes though!

That's one of the things I hope to do before I die, as well, DOJ. If you ever want to split the costs on such a voyage, and think you could tolerate a Yank, just let me know where and when to show up!

TaoJones

[RLB]

Pier.
In Canada one can avoid taxes by legal means (although frowned upon by the Canadian tax authorities). It is important to note that evading taxes and avoiding taxes are different in Canada as they may be viewed in other countries.
It was suggested in this forum that one could start a corporation. In a country like the Cayman's(insert your tax haven here) for a modest fee of about $2000.00 (canadian) you could have the corporation setup and have the corporation directed to buy the boat. The structure of the corporation is important here becasue you will want to avoid a connection to the corporation. This is usually done by appointing someone else not related to you as a director and directing them to buy the boat for you. You posses the boat but the corporation then owns it.
Getting the money out of your country to buy the boat is another matter however but it can be done. This is very similiar to setting up an offshore account and avoiding taxes.

In Italy you may even be able to pay the corporation a modest lease payment and claim it as a tax deduction.

All of this is just a suggestion of course.

RLB

[Pblais]

I think this thread points out the only important issue. Tax and legal advice you get from the Internet is not worth what you pay for it. tax and legal advice you get from a yacht broker may be worth even less. For the amount of money we are talking about you need a real legal / tax expert that you have to pay for. None of our members are real experts nor do they even play one on television. For myself I think I might be able to drink as much liquor as a real expert and maybe sail a boat better than one too.

[SVLiv]

Well, I'm in almost the same situation as Pier (only difference probably being that in Denmark, we pay some 25% VAT + import tax....on a vessel imported from outside the EU). In my case, I'm looking to buy a boat in Florida, sailing it around the world for some 4 years + and selling it off again. Naturally in such (and probably in any) - case you will try to avoid the VAT. I have no problem with the moral issues related hereto, firstly because the boat's never intended to enter Danish waters and secondly because there vill be no VAT refund when selleing off the boat to someone abroard. Honestly - I do not even see that asking the VAT under such circumstances is fair!
I'm looking (on another thread, though) for advise on where, how and at what cost to register in Jersey, Cayman Islands or whereever a tax haven may exist - but I think that advises may be just as relevant in this thread anyway.

[Boracay]

As I understand the position in Australia I only have to pay taxes if I import a boat.

The Australian Maritime Safety Agency appears to have no interest in tax status.

In particular
"Ability to sail overseas

• It is an offence for an Australian-owned vessel to sail for a foreign port unless it is registered in the Australian Register of Ships.
• Note: vessels purchased overseas by Australians are also required to be registered before they sail for Australia or another foreign country."

[Pblais]

Does registration mean taxes?

Registration has nothing to do with taxes except the process of registering will naturally inform tax officials.Tax collectors may not be equally smart but they know where to look for rich people that owe tax.

1. The ability to register a boat some place not your home country is requires a naitive 3rd party. In the US even a partnership must be mostly US citizens. Other coutiries all have their own rules.

2. The ability to later sell a boat that was unregistered is impossible except for perhaps something you sell for cash at the dock. (would you buy one?).

3. No legitimate broker would offer your boat for sale (after you are done with it) unless they were sure you held the title. Registration is proof of title any place in the world. Nothing else is.

There is no place that is a 100% tax haven with 100% fees. You'll pay something and even in the case of the Caymans you'll need an agent that will require annual fees. Being from a heavily taxed country will mean it costs you more.

This thread brings up an interesting topic. The idea that you can be a "citizen of the world". To somehow not be a citizen of any place and not subject to anything. Sounds good to me. Form a tax point of view I would think you should emigrate from your own country and forget about. It's easier to move yourself than import a boat.

[David_Old_Jersey]

Originally Posted by SVLiv

I'm looking (on another thread, though) for advise on where, how and at what cost to register in Jersey, Cayman Islands or whereever a tax haven may exist - but I think that advises may be just as relevant in this thread anyway.

I knew this thread was nagging at something in the back of my mind........I must get around to re-registering my own boat (now bought for some 18 months. or so )..............

...........which brings me nicely onto "Registration is proof of title any place in the world. Nothing else is"........in the UK (and Jersey) this is not true. Possibly a very good indication (depending on which Register used), but not absolute proof of Title. For that you need a chain of signed Bills of Sale (originals, not photocopies) back to day 1 when the boat was built......but of course the last one could be forged or the pile could not include a Bill of Sale signed the day before.......

Of course in some countries registration IS proof of Title / Ownership - but not in the UK.....which is not always a bad thing as it means a boat can be registered in the name of a person / a company purely as nominee for a 3rd party person, company or Trust whose name does not appear on any paperwork filed anywhere in the world.

PBLAIS is quite correct however. "You'll pay something and even in the case of the Caymans you'll need an agent that will require annual fees" and the same applies in Jersey, you need a local (Hey, we are not stupid - it's bizness!).....and for that fees vary.


BTW some of you may have wondered why I have NOT touted for bizness on this and similar threads, this is quite deliberate because the Company I am presently working in (albeit I am self employed / a very very small businessman ) are staffed by donuts who struggle to spell Boat and are also just too embarrasingly expensive to recomend .- despite them being a large and reputable bank who can and do provide this service to others at a cost in the multiple of 000's (£)..........on the other hand Offshore Yacht registration is something I have thought about getting into as a sideline - just that it is not quite profitable enuf as a standalone business, mainly cos' we are in a Jurisdiction which is nowadays highly Regulated which creates costs (a downside of being reputable).........plus I do have wayyyyy too much on my plate elsewhere. Hardly touched the boat this year ..........but me being a good Jerseyman if someone waves enuf cash at me...................

[hellosailor]

David-
"Ok, so the boat is then "Out of Africa" ........if you are not importing the boat into the EU / Italy you do NOT need to pay any Italian VAT ...because you are also simply NOT importing the boat into these countries"

I don't think there was any qoubt about that. However, your picture of buying the boat in SA and then sailing it around the world has one major flaw in it. The boat will probably be allowed to leave SA (probably) but it will not be allowed into the US, or most other jurisdictions, without documentation/registration papers and a "flag" from some sovereign state.

And there lies the rub. Would Italy be foolish enough to allow a vessel to be Italian-flagged, without first having VAT paid on it? Regardless of where the vessel lay? I can buy a South African vessel and bring it home on my local state registration, without even a national flag or national documentation. But--I still can't get that state registration until and unless I pay full state sales tax on it. Cash in hand to get the papers.

I could document the vessel without paying any tax, but then, the federal documentation status requires a home port and someone is going to notify someone else "this boat is home ported in your state" and tax enquiries may be made--and summonses issued, resulting in the physical arrest of the boat if I don't pay what is determined due.

And even then, I only have one option for flagging the vessel, based on my citizenship.

To explore any more options, means a commercial ownership for the vessel, and a "domestic" corporation somewhere under a flag of convenience. And that of course, means the added pros and cons of having to run and support a corporation somewhere, on paper at least. Playing the "dummy corporation" game works very well for some folks, but if a tax authority declares the corporation null & void (as a sham) things can go very badly. Beginning, again, with the arrest of the vessel.

[libellula]

Pay the taxes and live free!

[David_Old_Jersey]

Originally Posted by hellosailor

David-
"Ok, so the boat is then "Out of Africa" ........if you are not importing the boat into the EU / Italy you do NOT need to pay any Italian VAT ...because you are also simply NOT importing the boat into these countries"

I don't think there was any qoubt about that. - agreed

However, your picture of buying the boat in SA and then sailing it around the world has one major flaw in it. - I disagree - but we are not that far apart, read on!

The boat will probably be allowed to leave SA (probably) but it will not be allowed into the US, or most other jurisdictions, without documentation/registration papers and a "flag" from some sovereign state - agreed

And there lies the rub. Would Italy be foolish enough to allow a vessel to be Italian-flagged, without first having VAT paid on it? Regardless of where the vessel lay? - I don't know / cannot remember / too lazy to Google - but I suspect to be Italian flagged they would require VAT to be paid (But i am happy to be proved wrong)

So the answer is to register your boat somewhere which does not require VAT to be paid as part of a Boat Registration process.......like Jersey . Or even the UK (note that buying a UK registered boat does NOT automatically mean she is VAT paid, as many have found to their cost over the years and conversley a boat registered in Jersey CAN be VAT paid). You then have a registration that is internationally recognised and the captain does not have to be the same nationality as the boat registration and does not need any paper qualifications. To acheive this in Jersey you either need a Jersey company or (I beleive now in Jersey) a foreign company with a local (!!) representative. (Broadly the same in Cayman, but don't quote me on this).

I can buy a South African vessel and bring it home on my local state registration without even a national flag or national documentation This would probably have to be non-stop as I suspect that countries in between would not accept what is in effect merely a local (non-national) permit. In Jersey and probably the UK, I (as a Brit Citizen) could just set off from SA (even if in the middle of the night ) and arrive quite legally with no Reg (OR State registration!)- but it would also have to be a non-stop journey )

But--I still can't get that state registration until and unless I pay full state sales tax on it. Cash in hand to get the papers. - State taxes, nothing to do with travelling around the world - agreed. nothing to do with travelling around the world. If you were travelling around the world WHY would you pay State Taxes? as you are not keeping the Boat in that State (maybe visiting for a while?)........with a Jersey or UK flag you do not NEED the State Registration

I could document the vessel without paying any tax, but then, the federal documentation status requires a home port and someone is going to notify someone else "this boat is home ported in your state" and tax enquiries may be made--and summonses issued, resulting in the physical arrest of the boat if I don't pay what is determined due. - Fair enuf, cos then you are importing the vessel, in pretty much the same way as an EU person importing a VAT free boat into the EU would be clobbered for the unpaid tax - However as a visitor to your State I assume I get a window of time to not be clobbered for State taxes, in the same way as a non EU boat can stay in the EU for certain periods without paying VAT - I forget the rules .

And even then, I only have one option for flagging the vessel, based on my citizenship. - OK, this may be a bit of a hurdle if Uncle Sam has a rule against folks having boats on foreign shipping registers in their own names - cos' he is known to have longggg arms......BUT I would be surprised if using the foreign company route was not permissible - indeed in practice I would be surprised if anyone other than a citizen of a country could register a boat without using the foreign company route - rather than the problem being that Uncle Sam says no.

To explore any more options, means a commercial ownership for the vessel, and a "domestic" corporation somewhere under a flag of convenience. And that of course, means the added pros and cons of having to run and support a corporation somewhere, on paper at least. - yes, but some Company jurisdictions are cheaper than others, and I do recall that they changed the law in Jersey a couple of years back to allow a Foreign company (with a local Rep!) to register a vessel - and folk may well have a company already in existence that could be used.

Playing the "dummy corporation" game works very well for some folks, but if a tax authority declares the corporation null & void (as a sham) things can go very badly. Beginning, again, with the arrest of the vessel - don't ask, don't tell..........no, I didn't say that really . Depends what you mean by Dummy corporation (I suspect might be difference in use of English accross the pond), of course I am not going to claim that their are no tax issues possible (like I know the US tax codes!!), but as long as you declare ownership of the asset (if required?) then how it is actually registered should only be a minor issue - I do not see how you have evaded any USA / state taxes because the boat is simply not in the USA........of course if you start stuffing income into the offshore company and not telling anyone then this would probably cause a problem!

As you stated initially this is about "Going around the world" and therefore never being anywhere permanently that requires the boat to be imported and for taxes to be due (otherwise it would be a very expensive trip!) but no need to start off the trip paying taxes to a country / state the boat and you may never visit again (or only briefly), even if it was your home - could well be that at the end of the trip you could decide to import the boat to your home state and then pay the taxes (on a s/h vessel), but also you could sell her elsewhere in the world - with or without local import taxes being paid.

It is NOT about buying a boat free of whatever taxes are payable in your own country / locale and then importing her home.......without paying the tax. I think that was / is called "Smuggling"


I probably should write this stuff down in one place. But lot's of things I should do