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Old 08-04-2013, 08:28   #1
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Taxes and Boat Registration

Looking for a little advice on Canadian registration and importation taxes. We are planning on purchasing a Cat in Florida this summer and floating in the Carribbean for three years before reselling the boat in Florida. I would like to register the boat in Canada but do not intend to import the boat into the country and pay the taxes. Is it possible to delink the two? I intend to insure the vessel and will need to register it somewhere but can anyone give me some advice on how to register it in Canada without engaging Revenue Canada?
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Old 08-04-2013, 08:49   #2
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Re: Taxes and boat registration

If you can do this, the Canadians aren't writing their tax laws well enough.
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Old 08-04-2013, 08:53   #3
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Re: Taxes and boat registration

You can buy a boat in Florida, get a temporary tax exemption allowing you to stay in Florida for up to 180 days. From there you need to leave Florida or pay the use tax which is 6%, but capped at $18,000usd. No need to pay Canadian import duty unless the yacht reaches Canadian waters.

You can still register the boat in Canada. I've sold numerous yachts to Canadians who have done just what you are referring to.

Send me a PM if you need any advice.

Wiley Sharp
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wiley@denisonyachtsales.com
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Old 08-04-2013, 13:31   #4
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Re: Taxes and boat registration

Wiley Sharp is 100% correct. However, the moment your boat enters Canadian waters, you are on the hook for the money. Never knowing what the future holds and where you may cruise to, you may want to consider another option. A BVI registration will allow more feedoms in case you ever want to go to Canada,
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Old 08-04-2013, 14:04   #5
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Re: Taxes and boat registration

The issue with a BVI registration it is expensive, and you have to pay a substantial yearly fee to maintain a BVI corporation. For cruising around I would recommend just going with the Canadian registry. If you were to ever bring the boat back into Canada down the road the import duty won't be on what you paid for the yacht, but the surveyed value of the yacht.

The surveyed value of the yacht right off the bat is normally 80-85% of the purchase price of the yacht. If you have the boat overseas for a couple of years there would obviously be even more depreciation on the surveyed value.

If you need any help, or have any further questions please don't hesitate to PM me.

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Old 08-04-2013, 14:41   #6
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Re: Taxes and boat registration

Quote:
Originally Posted by Frozen Chosen View Post
I would like to register the boat in Canada but do not intend to import the boat into the country and pay the taxes. Is it possible to delink the two? I intend to insure the vessel and will need to register it somewhere but can anyone give me some advice on how to register it in Canada without engaging Revenue Canada?
Yes, it is possible as the two events (boat licensing/registering and paying due taxes/fees) are not linked procedurally. If you are lucky, you might not show up when Revenue Canada does occasional harvesting of Canadian boat license/registration records. If you are not, the RCMP might be knocking on your door and asking the questions ... I am not kidding!

If they find you, then you are not only responsible for the outstanding taxes and fees, but also for penalties and accrued compounded interest. Could be a bad event for your retirement fund ... not fun.

I did it by the book, despite the fact that I am NOT permanent Canadian resident. Here is my experience: Purchasing a boat in the USA and bringing it back to Canada
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Old 08-04-2013, 15:55   #7
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Re: Taxes and Boat Registration

> If they find you, then you are not only responsible for the outstanding taxes and fees

If the boat never crossed the Canadian border? I think that's not true.
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Old 08-04-2013, 16:07   #8
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Re: Taxes and Boat Registration

Not sure ... I meant to word it: If they find you in violation, then ...

As to be sure, one should consult Canadian accountant or tax lawyer.
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Old 08-04-2013, 21:56   #9
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Re: Taxes and Boat Registration

Excellent info, thank you. We have no intention of taking a cat back to Canada so have no intention of paying Cdn taxes. I appreciate the info and advice.
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Old 09-04-2013, 06:40   #10
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Just to mirror what Richard said... I would definitely contact a tax expert in Canada to make sure you are on the up and up...
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Old 25-04-2013, 20:23   #11
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Re: Taxes and Boat Registration

To close the loop here I contacted the registration folks and the two events are completely separate. If you stay in Canadian waters then you would be subject to Canadian import taxes however if you do not import the boat you are still able to register the boat as a Canadian vessel and get the proper paperwork for an administrative fee. If at a later date you elected to "import" the boat into Canada you would then be liable for the importation taxes.

Thanks for all your inputs.
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