US citizen in the US buying a boat in South Africa

[serpa4]

I'm looking at a boat in Cape Town for sale. I live in the US and am a citizen of the US.

I'd need to buy the boat in Cape Town and then leave it there for about 6 months before moving on and then sailing away.
I'm not finding much info on this.
Do I have to leave the country with the boat in a certain time period (30 days?) to avoid paying SA taxes?
I'd register the boat in the US as a US citizen, but not sure how long I can leave a boat in SA till I have to pay some type of fees.
I know in the US if you buy in say Florida, you have like 30 days to leave or pay state taxes. I assume there is something like that in SA, but not turning up much of foreigners buying a boat in SA and NOT registering it in SA.
Any info or links would help, thanks.

[Blackie Swart]

Are you looking at buying new or second-hand? I'm sure if you're buying new, the manufacturer can help you with that. I know new boats leave as "demo" registered models with a registered Offshore captain. Second-hand is a different issue.

[serpa4]

It will be used.

[Blackie Swart]

So, if it's second hand, it will already be registered in South Africa. There are 2 forms of registrations - local under SA Sailing which is just for local waters and the other under SAMSA for going offshore. If it only has local registration, to get an offshore one an safety survey, hull and rig inspection would have to done to get a SAMSA registration with a LGSA (local general safety certificate) to take it out the harbour and go offshore.
The taxes will have already been paid but you would have to import it into the US when registering here. I believe it's 1.5% duty on the value.
I'll send you a private message as well.

[Cadence]

[QUOTE=serpa4;3109006]I'm looking at a boat in Cape Town for sale. I live in the US and am a citizen of the US.

I'd need to buy the boat in Cape Town and then leave it there for about 6 months before moving on and then sailing away.
I'm not finding much info on this.
Do I have to leave the country with the boat in a certain time period (30 days?) to avoid paying SA taxes?
I'd register the boat in the US as a US citizen, but not sure how long I can leave a boat in SA till I have to pay some type of fees.
I know in the US if you buy in say Florida, you have like 30 days to leave or pay state taxes. I assume there is something like that in SA, but not turning up much of foreigners buying a boat in SA and NOT registering it in SA.
Any info or links would help, thanks.[/QUOTE

I bought a boat from a SA about 17 yrs. ago. Unfortunately I had to donate it to a non-profit. They had problems because apparently SA had no official boat registration at the time and registering it in the US was a problem. It may have changed but just a heads up to check into.

[jmschmidt]

Again great confusion between "registering" and "documenting." In the US "registering" is a state function whereas "documenting" (aka US Flagging) is done through the US Coast Guard's National Maritime Center.

If your "register" it in a US state the has a personal property tax on boats, like Florida or California, you will forever be dinged for, not only the tax, but for annual renewals if you leave the boat in-state for a period of time which varies between states.

If you US flag it by documenting through the USCG National Center (about $250) and base it in a state without personal property the tax, like Hawaii, you will only pay the annual renewal to the USCG which used to be free but now cost $26.

Of course you may base a USCG documented vessel in a personal property tax state but you must report it to the state's tax agency and receive a sticker to be placed on the boat to notify tax agents who prowl marinas and anchorages for victims, that you are paying the tax. But do not also "register" a USCG documented vessel with any state or your USCG documentation will be invalidated. Yes, your choice is state registration or USCG documentation, not both.

[Montanan]

There is a 15% VAT due upon purchase which may be refundable if you export the good on a timely basis [in this case the boat and all its accessories, one needs to detail each of the accessories in your Bill of Sale document, list would be long]. You mentioned 6 months, that does not appear to be within the time limit for export; it seems you have within 90 days after purchase, else the good has been deemed to be purchased for domestic purposes.

Reference: The South African Revenue Service (SARS) is the nation’s tax collecting authority. Established in terms of the South African Revenue Service Act 34 of 1997 as an autonomous agency, we are responsible for administering the South African tax system and customs service.

https://www.sars.gov.za/TaxTypes/VAT...ted-Goods.aspx

VAT REFUNDS FOR TOURISTS AND FOREIGN ENTERPRISES
What is a VAT refund?
A VAT refund is an amount of VAT that was charged (increased from 14% to 15% from 1 April 2018) by a vendor and paid by a qualifying purchaser, on the acquisition of goods in South Africa. The qualifying purchase must be in South Africa at the time of acquisition and must also export the goods from South Africa.

The VAT refund will only be applicable to the acquisition of goods and not on the acquisition of services i.e. the VAT charged at 15% on any acquisition of services, such as transport and accommodation, will not qualify for a refund. For more info on the process for VAT refunds for vendors, click here.

Notional Input Tax and Open Market Value will be considered for refund on registrable goods and other second hand goods, for more information please refer to the VAT Act.
Who may claim a VAT refund?
A qualifying purchaser is entitled to claim a VAT refund. In this regard, a ‘qualifying purchaser’ is a person who is not a registered vendor and who is according to the Export Regulations a:
tourist;
foreign diplomat;
foreign enterprise;
non-resident of the Republic;
any –
international organisation established in terms of a Constitutive Act, a constitution or a charter for the purposes of promoting peace and security, human and people’s rights and political and social-economic development or any similar purpose; or
o organisation which is similar to an association not for gain or welfare organisation which is registered as such in that export country
and established in an export country and not conducting any activity in the Republic; or
for purposes of Part Two – Section A, a person who is not a resident of the Republic who acquires goods from a vendor in the Republic with the sole purpose of selling those goods to another person who is not a resident of the Republic.
For more info on VAT refunds for vendors, click here.
How do I claim a VAT refund?
A qualifying purchaser, may claim a VAT refund by submitting such claim to the VAT Refund Administrator (Pty) Ltd (the VRA).

The qualifying purchaser must first declare the goods to a customs official at the designated commercial port of departure from South Africa. The tax invoice for goods that are not kept as hand luggage must be endorsed by the customs official and a VRA official if the VRA has a physical presence at the commercial port. If the VRA does not have a physical presence, you must apply in writing to the VRA. See the list of commercial ports further down.
When will a VAT refund be considered?
A VAT refund will be considered if the following requirements are met:
The purchaser must be a qualifying purchaser.
The goods must be exported within 90 days from the date of the tax invoice subject to certain exceptions.
The VAT inclusive total of all movable goods purchased during a particular visit to the RSA and exported at the end of that visit by the qualifying purchaser must exceed the minimum of R250 per qualifying purchaser.
The request for a refund, together with the relevant documentation, must be received by the VRA within 90 days of date of export.
The goods must be exported through one of the 43 designated commercial ports by the qualifying purchaser or the qualifying purchaser’s cartage contractor.
The qualifying purchaser must submit all the relevant original documentary proof as contemplated in Part One of the Export Regulations in order to prove that the movable goods were exported by road, sea, air or rail.

[serpa4]

Thanks. So you must pay then apply for a refund and they "should" give it back.

[Montanan]

The boat registration / documenting / flagging is an issue separate from the taxation. You may need a cruising permit if you keep your vessel in SA, again that is yet another issue. Don't confuse them.

There may be other fees and excise taxes in addition to the VAT. Ask a boat broker in SA for the details. VAT will be the major money matter.

If you bring your vessel into the USA there will be a modest customs import duty, I believe 1.5% of value due upon checking into the Customs and Border Patrol in the USA.

If you are a US citizen then documenting the vessel with the USCG would seem most appropriate. Very straightforward and inexpensive.

[Montanan]

Originally Posted by serpa4

Thanks. So you must pay then apply for a refund and they "should" give it back.

Should if you follow all the procedures and time schedule. Cross T's, dot i's.

A lot of value so definitely read up on the rules at SARS and perhaps go visit their offices in person when you are in SA to get it right because getting anything wrong could be costly.

There may be some "exceptions" that apply, which may include for an example, an affidavit of intent to export if purchasing from a dealer, which allows for registering a temporary waiver of payment of the Sales tax, e.g. in Florida, if purchased from a registered boat dealer.

I am not an expert in SARS. You will become one. I have given you a heads up and a reference to follow. Good luck and enjoy your boat.

[MikeFergie]

If you are buying the boat from an individual and not a company and it’s registered in South Africa and second hand there is no VAT applicable.

Currently there are 2 forms of registration. If the boat is locally sailed then it will be registered with SAS ( South African sailing) this registration lapses if the boat does not have a current certificate of fitness (annual seaworthy inspection) and may not leave the Harbour etc.

If the boat owners intended or have sailed internationally then the boat will be registered on the countries shipping register. This is with SAMSA (South African maritime Safety Authority) this also requires an annual inspection or certificate of fitness. If this is the case then when you buy it you have to deregister it from the shipping register. During this process you will need to inform them which countries register it will go on and the deregistration form will contain this info.

In South Africa the vessels are registered according to the distance from shore they can operate.
Category A is for ocean crossing vessels which has the most safety gear etc
Category B is for coastal and no more than 40nm from the shore
Category C is inland vessels, lakes dams etc

Where is the vessel currently, how old is the vessel, type of vessel ?

Rgards
MikeF

[Vasco]

Originally Posted by jmschmidt

Again great confusion between "registering" and "documenting." In the US "registering" is a state function whereas "documenting" (aka US Flagging) is done through the US Coast Guard's National Maritime Center.

If your "register" it in a US state the has a personal property tax on boats, like Florida or California, you will forever be dinged for, not only the tax, but for annual renewals if you leave the boat in-state for a period of time which varies between states.

If you US flag it by documenting through the USCG National Center (about $250) and base it in a state without personal property the tax, like Hawaii, you will only pay the annual renewal to the USCG which used to be free but now cost $26.

Of course you may base a USCG documented vessel in a personal property tax state but you must report it to the state's tax agency and receive a sticker to be placed on the boat to notify tax agents who prowl marinas and anchorages for victims, that you are paying the tax. But do not also "register" a USCG documented vessel with any state or your USCG documentation will be invalidated. Yes, your choice is state registration or USCG documentation, not both.

Florida with a personal property tax? No way!

[Sand crab]

Plus you need to make sure the engine(s) will pass EPA regs in the states. It's a big issue with documentation.

[dfelsent]

The epa issue is, as far as I know, not a documentation issue. It can be a Customs issue on import.

[jmastal70]

The mentioned 1.5% import tax has an exclusion under the African Growth and Opportunity Act, which the US Congress has extended until 2025. It excludes boats manufactured in Africa and imported into the US. As the boat owner, you are the sole importer and responsible for pointing out to the customs official at your US port of entry that the exclusion applies and be prepared to support your assertion of the exclusion by gathering information before you set out. I can tell you that "refunds" are difficult to come by if you miss the opportunity to claim the exclusion upon first entering the US.