Under What Flag Would You Register ?

[Lagoon4us]

With all the flags of convenience out there which country other than your own would you consider registering your foreign going/cruising yacht in and why.

I'm not talking with regard to criminal or evasive reasons more for simplicity...

[jeremiason]

I can't see a reason to Flag a Recreational Vessel under a "Flag of Convenience" for anything other than avoiding taxes or not paying a crew a fair wage or benefits.

The problem with registering pleasure vessels with "Flags of Convenience" is that they may subject themselves to other laws more problematic than just registering in their own country...

For example, recently I ran into an American owned Sport Fisher who flagged the vessel in the Bahamas, obviously for tax reasons.

The problem arose when he wanted to head into US Waters for a tourement and realised his vessel's Cruising Permit for the USA was expired.

It cost the owner a significant amount of money to have an agent/lawyer re-instate the permit, probably more thn he would have paid in taxes that year if he had registered in say Florida.

[Lagoon4us]

I guess i was not meaning to register under a flag of convenience more using them as an example.
i.e. there are advantages in registering under a NZ flag when travelling in Europe as NZ has agreements for visitors in Europe that most other countries don't.
I'm definately not talking about American residents registering outside of America unless they are foreign going/cruising overseas for long periods.... Cheers

[goboatingnow]

Originally Posted by Lagoon4us

I guess i was not meaning to register under a flag of convenience more using them as an example.
i.e. there are advantages in registering under a NZ flag when travelling in Europe as NZ has agreements for visitors in Europe that most other countries don't.
I'm definately not talking about American residents registering outside of America unless they are foreign going/cruising overseas for long periods.... Cheers

The flag of a leisure vessel in the EU is of little consequence and confers no rights on its crew. If you have crew with NZ passports there are concessions for the, but the flag of the vessel is irrelevant


Dave

[surfmachine]

Consider the british SSR, if you have a member of the british commonwealth passport, eg ausiie, nz, etc, and have an address in GB for them to send it to. Cost 25 pounds for 5 years, do it over the internet.
This is a full international ships registration in britain.
Cheers from Keith.

[David_Old_Jersey]

If you qualify for SSR and are happy lying that you live in the UK then I would go for that - £25 quid. Slight potential downside (if you are claiming the boat is not an EU import and therefore not looking to pay VAT) is that a switched on customs officer may use your claim of UK residence (to obtain the SSR) as a reason to claim that the boat was an EU import - that £25 could get expensive! Whether rightly or wrongly - get the bill first and argue it out in court. In practice how likely is that? No idea. Probably somewhere between very unlikely and unlucky......

I would go for a Jersey flag. But I would say that! - we have two physical flag designs, a Red Ensign with the Jersey stuff on it. and a plain Red Ensign. No skipper or boat equipment requirements. I forget the costs - but registration good for 10 years...the big cost is the tonnage / measurement survey (around a £1k?). Upside is that boat loans / mortgages can be registered against the vessel - might not be important to you, might be to a buyer (if they qualify to keep the flag - or simply as a comfort that you don't!).

If you have a legitamate reason for the boat / you being where it is (in EU or elsewhere) - then all you need is a reason for not being registered in your home country (as a reasonable explanation to anyone who asks - and also simply because you do need a reason before bothering / paying out!), and in the case of Australia (correct me if I am wrong) the reason is that registration means paying boat taxes even before the boat arrives "home". If that not the case I would simply get Aussie Registration, as keeps your story easy to understood (officialdom like easy).

I appreciate that "flags of conveniance" have a certain reputation for tax dodging (and in some places that is reason enough to avoid them) - but nonetheless can be useful to some in the right circumstances - hence I guess the term "flag of conveniance"

I can hear GBN giggling / rolling eyes as I quickly scribble the above - but am dashing off to the boat now.....

[Lagoon4us]

My reason for this thread was when in another thread i mentioned we were going through Aussie registration i was quizzed as to WHY i would do that, i thought it natural to do so albeit time consuming...
DOJ
I forget the costs - but registration good for 10 years...the big cost is the tonnage / measurement survey (around a £1k?).

We have a Tonnage certificate as part of ships papers.. I see your point that Channel Islands not part of EU so the boat goes to the 18month rule, is that correct?
Cheers Frank

[David_Old_Jersey]

Originally Posted by Lagoon4us

My reason for this thread was when in another thread i mentioned we were going through Aussie registration i was quizzed as to WHY i would do that, i thought it natural to do so albeit time consuming...
DOJ
I forget the costs - but registration good for 10 years...the big cost is the tonnage / measurement survey (around a £1k?).

We have a Tonnage certificate as part of ships papers.. I see your point that Channel Islands not part of EU so the boat goes to the 18month rule, is that correct?
Cheers Frank

Jersey not being in the EU does not affect the 18 month rule - the rule is about you (not being resident within the EU). What Jersey Reg gives you is no need to claim to be a resident of an EU Country - like the UK) simply to get the Flag. Claiming to be an EU resident to simply get a flag on your boat does not automatically make you an EU Tax Resident - but it would go against everything else you are saying when cliaming that you do not merit a VAT Bill!

Am deffo off down the boat now!

GBN no doubt will be along shortly (again?) - but just to ask, where is the boat currently registered?

[savoir]

A tonnage survey is 155 pounds in UK, maybe more in Jersey. Jersey registered boats are caught by the 18 month rule but there are lots of places you can go to restart the clock - Morocco, Jersey, Croatia, Turkey, Gibraltar etc.

Might be able to add Greece soon.

[goboatingnow]

Your right DOJ. Im on the floor laughing.

I can see the French ( no more likely a Portuguese official) understand how you have a jersey flagged no Vat uk address no resident set of papers. , talk about a stick to beat yourself with. LOL

Dave

[goboatingnow]

Originally Posted by savoir

A tonnage survey is 155 pounds in UK, maybe more in Jersey. Jersey registered boats are caught by the 18 month rule but there are lots of places you can go to restart the clock - Morocco, Jersey, Croatia, Turkey, Gibraltar etc.

Might be able to add Greece soon.

How many times do I have to say this

THE FLAG OF THE BOAT IS IRREVERENT IN DETERMINING VAT STATUS. IT'S THE TAX RESIDENCY OF THE OWNER

If you are a EU tax resident, irrespective of flag, when you bring the boat to Europe you pay VAT immediately. If you are not a EU tax resident, again irrespective of flag you are entities to TIR , which gives you 18 months, resettable. ( in effect for ever )

sheesh

Dave

[DotDun]

Originally Posted by jeremiason

For example, recently I ran into an American owned Sport Fisher who flagged the vessel in the Bahamas, obviously for tax reasons.

The problem arose when he wanted to head into US Waters for a tourement and realised his vessel's Cruising Permit for the USA was expired.

It cost the owner a significant amount of money to have an agent/lawyer re-instate the permit, probably more thn he would have paid in taxes that year if he had registered in say Florida.

The cost was self-inflicted agent/lawyer fees. US citizens that own a foreign-flagged vessel can get a CBP cruising license for free with a simple visit to any port CBP office. Yes, it probably requires an annual visit, but unlike a foreigner owned vessel, there is no 15 day/out of country requirement.

[savoir]

Originally Posted by goboatingnow

How many times do I have to say this

THE FLAG OF THE BOAT IS IRREVERENT IN DETERMINING VAT STATUS. IT'S THE TAX RESIDENCY OF THE OWNER

If you are a EU tax resident, irrespective of flag, when you bring the boat to Europe you pay VAT immediately. If you are not a EU tax resident, again irrespective of flag you are entities to TIR , which gives you 18 months, resettable. ( in effect for ever )

sheesh

Dave

Silly me. I had foolishly assumed that an EU tax resident would know that foreign flagging a boat was a waste of time.

[swisscraft]

Originally Posted by goboatingnow

How many times do I have to say this

THE FLAG OF THE BOAT IS IRREVERENT IN DETERMINING VAT STATUS. IT'S THE TAX RESIDENCY OF THE OWNER

If you are a EU tax resident, irrespective of flag, when you bring the boat to Europe you pay VAT immediately. If you are not a EU tax resident, again irrespective of flag you are entities to TIR , which gives you 18 months, resettable. ( in effect for ever )

sheesh

Dave

Just to add two things - I think the confusion which comes from that are created by the mega yachties. Yes they are foreign registered for tax reasons and not necessarily just VAT. And yes the real owner may be EU citizen. But the owner of the is yacht maybe a company, trust or whatever in such a tax haven - which is then subsequently owned by the real owner.
So they do not own a yacht - they own an investment which has a yacht in it and maybe other stuff as well....different game.

And lets not forget there is another reason for having another flag on the stern: Employment law! If you have 5 -20 souls crew and you operate under a "decent" working law you may face minimal wages, health insurance, pension, paid holidays and in some countries you cannot fire people easily...did you know that you need special working permits to work on weekends and after hours in major EU countries?? That as well a big money saver...

Said so, I have my home flag on my stern. After all its my home country, its easy to get insurance and documents, nobody thinks I'm hiding anything and so one. And if I ever would have any problem my embassy would for sure help with the whole case - since my boat is part of my home country, somehow

[K_V_B]

Originally Posted by goboatingnow

How many times do I have to say this

THE FLAG OF THE BOAT IS IRREVERENT IN DETERMINING VAT STATUS. IT'S THE TAX RESIDENCY OF THE OWNER

If you are a EU tax resident, irrespective of flag, when you bring the boat to Europe you pay VAT immediately. If you are not a EU tax resident, again irrespective of flag you are entities to TIR , which gives you 18 months, resettable. ( in effect for ever )

I'm a Belgian living in Switzerland. If I buy a boat I could put a Swiss Flag on it, but then the problem arises that only people with Swiss Sailing Permits can sail it...
But am I correct in assuming that I could hang a Belgian flag on it (or a Flemish flag in a few years :-) and still avoid paying VAT, as I'm not an EU tax resident?