Canadian Taxes on out of country purchase - Alberta

[Sapper]

Hey all.

I've gone some digging to try and find an answer to this, but everything seems to be for costal areas of Canada.

I live in Alberta where there is no Provincial sales tax, just GST. I do know that when you import a boat into Canada you need to pay the sales tax on the assessed value / purchase price of the boat. I'm wanting to buy a sailboat, which obviously cannot be pulled into Alberta as we are land locked... So BC it is. As an Alberta resident, does anyone know how taxes are charged on this if the boat lands in BC after being brought up? Will I be required to pay BC PST on the value of it? Am I exempt as an Alberta resident?

Any help would be greatly appreciated!

[Marathon1150]

Interesting question. We live in BC and when we imported our boat from Washington we paid BC Sales tax as well as Canadian Excise Tax and Duty because the boat was built in France and registered in the US (Washington). If it had been built in the US (or Canada) we would not have had to pay the latter because of NAFTA.

The taxes etc were calculated and levied by the federal tax people but did include PST. We paid by credit card which was handy because we received a lot of points!

It might depend on where you intend to keep the boat. The document at this site https://www2.gov.bc.ca/assets/gov/ta...quirements.pdf indicates that vehicles brought into the province for use somewhere else are exempt. In previous paragraphs, boats are mentioned as "vehicles". You may want to phone the BC Tax office, and/or get it in writing if there is an exemption. The boat will need to be inspected when you enter the province and individual officers may have slightly different understandings of the relevant laws.

[Sapper]

Thats a good point, I didn't even think of Excise Tax or duties. The boat I'm looking at is an Oyster 39 so it was built in the UK. I'll need to look into that in term of Duties and such. One would think being part of the commonwealth, there would be a rather robust trade agreement in place between the two of us. Thanks for bringing that up.

[chris mac]

Hi sapper,
I am albertan as well, in fact was there most of the summer. We just got back to our boat yesterday.
When you register the vessel with transport canada, you will be asked to list your home port. For Alberta, the only option is Edmonton. Ours is registered that way.
Ours was already imported to Canada, we bought it on lake Ontario, so I never tested the theory. When we were looking stateside for a boat, We were told that we would not have to pay pst on import that way.
Your best bet would be an email or call to transport Canada in Hope's of getting it straight from them
Good luck with the purchase

[AiniA]

Originally Posted by Sapper

Thats a good point, I didn't even think of Excise Tax or duties. The boat I'm looking at is an Oyster 39 so it was built in the UK. I'll need to look into that in term of Duties and such. One would think being part of the commonwealth, there would be a rather robust trade agreement in place between the two of us. Thanks for bringing that up.

I don't think the Commonwealth has such a trade agreement. You could check to see if the free trade agreement with the EU helps since the UK was a member of the EU when the boat was built although not when you are importing.

[Mirage35]

Keep in mind that GST/PST/HST is actually a consumption tax, which means that goods are taxed in the jurisdiction where they are used. Which sounds like BC in your case.

But that's for new goods, used gets more complicated. GST (and by inference HST) does not apply on used goods, so provinces make up their own rules. For example - personal experience - Québec, which is not part of HST, applies its regular provincial tax; Ontario - because they can't apply HST - has a "special" tax specifically on used boats. Because I live in one and sail in the other they were both hoping to tax my boat.

Fun fact: for those who may not know, HST stands for "harmonized sales tax", and includes federal and provincial components. When it was first proposed, the suggested name was "blended sales tax." Until someone realized that it would immediately be referred to as the "BS Tax."

[Macblaze]

As Chris says, if you are an Alberta resident, and even if you don't register your boat but license it, you are potentially exempt from BC sales tax. The trick is the "offshore" delivery. We took possession of our boat in Point Roberts (U.S.) and avoided any BC sales tax for the transaction. It now lives in BC waters as I figured trucking it home every season was a bit too much

Seriously though, where the boat is kept is irrelevant.

[NaClyDog]

Originally Posted by Macblaze

Seriously though, where the boat is kept is irrelevant.

Except it's not if you never plan to bring it into Canada.

[Macblaze]

Originally Posted by NaClyDog

Except it's not if you never plan to bring it into Canada.

???

A) he's bringing it to BC
B) if he never brought it to Canada the question of provincial taxes is completely irrelevant to an Albertan

[NaClyDog]

Just saying your statement wasn't clear. Should have said "Seriously though, where the boat is in Canada kept is irrelevant." instead.

[Mike OReilly]

Originally Posted by Sapper

Thats a good point, I didn't even think of Excise Tax or duties. The boat I'm looking at is an Oyster 39 so it was built in the UK. I'll need to look into that in term of Duties and such. One would think being part of the commonwealth, there would be a rather robust trade agreement in place between the two of us. Thanks for bringing that up.

Interesting question about whether AB's non-PST applies in your case. Only GST. I don't know, but it kinda makes sense if that is your province of residence. When I bought our boat from the USA I imported it into Ontario (my home province) and was charged 13% (5% GST and 8% PST).

But make sure you check out any import duties that may apply. Boats that were built outside of the old NAFTA zone used to be subject to a 9.5% import duty. I'm not sure what it is under this New-NAFTA (whatever it's called), but I bet it's the same. So my understanding is that a UK-built boat would have been subject to this 9.5% duty under the old NAFTA.

[Bill Youmans]

I bought from a private owner in Ontario 3 yrs ago a used sailboat 36 footer CS 36 made in Ontario in '83. Paid no sales or any tax and sailed it to MN and no border or import taxes. My only
tax has been MN sales tax saying I owed taxes because the money was transferred to a broker for the private used sale. Still contesting it as all other 5 issues defining a used sale do not have to pay a sales tax. If I had written
2 checks one to seller and one for 10% commission to broker I would have no "sales tax". Stupid go figure.

[Emouchet]

9.5% import duty tax on European boats is still on duty in 2020!

Even if Canada signed the Comprehensive Economic and Trade Agreement (CETA) with Europe, this 9.5% tax still apply.
CETA is not yet fully in forced, parts are provisionally applied.
Rumors says that when CETA will be fully enforced, the 9.5% tax for importing European made boat will disappear.

[roland stockham]

You don't say how much you are planning on spending but since boats are not cheap I suggest it is worth talking to an accountant with experience in boat imports, may cost some but they can probably point to ways to minimize dues.

[Sapper]

Originally Posted by Emouchet

9.5% import duty tax on European boats is still on duty in 2020!

Even if Canada signed the Comprehensive Economic and Trade Agreement (CETA) with Europe, this 9.5% tax still apply.
CETA is not yet fully in forced, parts are provisionally applied.
Rumors says that when CETA will be fully enforced, the 9.5% tax for importing European made boat will disappear.

This is good to know and is certainly going to affect my buying decisions. Looking at an $80,000 boat with a potential for up to 21.5% tax (GST, PST, Duty) and adding $17,200 to the total price is not a road I'm willing to go down. I may need to change what I look for. This thread has been a real eye opener. I was prepped for the expenses that come along with boat ownership - maintenance, insurance, moorage and so on - but a potential 21.5% tax rate and $17,000 in taxes is just absurd.

I started this thread as a way to find out how much in tax I would potentially need to pay in my jurisdiction, not to find out how to skip out of the taxes. Now that I know more about this I can see why people are always looking for ways to get out of paying the taxes.

With the details provided and the questions I have asked elsewhere as well, it looks as though the boat would need to have the PST paid on it when brought into BC no matter what. But if I move the boat to Alberta within 30 days, that tax is refunded by the BC government. If I move it out of the country the tax is also refunded so long as its declared as not for use within Canada. These two options aren't plausible so in the end the full BC tax rate applies.

Looks like I'll be looking for something built within Canada or the US unless CETA take full effect before purchase.