What is this tax thing?

[cdocsail]

Ok, i go to a store, buy shoes and pay tax. The govt spends the money on entitlements, war or whatever its politicians think will get them more votes. But then i see boats for sale with the comment ‘taxes paid’ in the description. Even more confusing is when i see a boat for sale with taxes paid in another country. For example i found a boat in Australia with the line ‘taxes paid in mexico making this an excellent home’. What?

Or i read in these forums about canadians who want to come home in their boat from bvi and they have to pay tax just to enter the country- like a lot of tax!

Can someone explain what is this tax? Is it lime property tax? I mean what service do you get for paying this tax? And why is there tax on a 25 yo boat?

[Hartleyg]

In most US states, if you buy a used boat, the state wants "use tax", which is usually the same as sales tax, but on used property. If, however, you can prove that you already paid sales tax somewhere else, then the amount you already paid can be deducted from what they want.


I have no idea how that works internationally, but in the US of A, thats how it works.


Hartley
S/V Atsa

[thinwater]

This is just going to turn political, unless the OP has a specific question.

[JPA Cate]

I would wonder what on earth "taxes paid in Mexico," would have to do with importing a boat into Australia. Furthermore, I think if I believed it, I would be missing something important about that boat. As with any major purchase, one needs to assure a clear title, and so one of the things I'd wonder about is why would there be no sales tax in Mexico, and so on. Because all nations have their taxes and purchases would be subject to them.

If the boat was built elsewhere than Australia, import taxes will be due on it. Those taxes are calculated on the sale price of the boat, minus the costs of getting it to Australia, and based on a local surveyor's assessment of its present value, supported by photographs and text. We imported our old boat here when we decided to sell her.

You'd need to do a lot of research--carefully--to avoid being handed a sack of worms, rather than the key to the companionway hatch.

Ann

[Wotname]

Originally Posted by thinwater

This is just going to turn political, unless the OP has a specific question.

Exactly - the OP needs to ask a specific question about particular boat situation in a specific country for anyone here on CF to be able to help him.

Other than that, all governments raise funds by way of taxation to operate. Each one does it slightly differently and all the OP needs to know is the rules about a particular situation he might encounter.

[cdocsail]

apologies. the vessel is in new zealand, not australia. here is the listing

https://www.yachtworld.com/yacht/199...nt-42-9362532/

"For those interested in logistics: taxes have been paid in Mexico, making this an excellent home for someone."

So I guess this person lived on the boat in Mexico, and then sailed from Mexico to New Zealand. So when he is New Zealand, there was no tax?
And if it comes to the US, then tax has to be paid in the US?

[JPA Cate]

Maybe there is a confusion of terms here? NZ does have import tax, too. The way they compute it is different from Oz. They may call it "duty" rather than "tax". Google it, if you haven't already. Governments also change their regulations, and sometimes the changes are not reflected on their websites.

Maybe someone here who is near the yard in NZ where the boat is will offer to try and find out its status.

Ann

[NevilleCat]

Originally Posted by JPA Cate

Maybe there is a confusion of terms here? NZ does have import tax, too. The way they compute it is different from Oz. They may call it "duty" rather than "tax". Google it, if you haven't already. Governments also change their regulations, and sometimes the changes are not reflected on their websites.

Maybe someone here who is near the yard in NZ where the boat is will offer to try and find out its status.

Ann

The way I read that ad is that it has been imported into Mexico, which presumably means that you could sail it back there and not have to pay import duty.
It states that tax is not paid into NZ so it has not been imported into NZ.
Although they may have started the process, or had repairs done so that the gas system will comply.
If I understand this, you could buy this boat without having to pay NZ duty, which will be substantial, only if you are intending to keep foreign registration, and you will have to leave and export it before a certain grace period is up?
So for someone who wishes to continue on a circumnavigation etc, or do the pacific this season then sail on etc.

[grantmc]

Ann a boat imported in to NZ accrues two taxes 5-7% duty, plus GST 15% (goods and services tax). But the owner, (must have citizenship other than Kiwi), can request a temporary import entry (permit) that is usually granted for a maximum of 24 months. The permit allows that if the boat leaves NZ within the 24 months then the duty and GST does not need to be paid.
The boat in question is clearly advertised as a 1999 Valiant 42 | 42ft
Located Marsden Cove (Auckland), New Zealand for NZ$170,000 (approx. US$102,331) tax not paid.

Conditions for qualifying for a C4G/TIE

The vessel owners are a resident of a country other than New Zealand, and
- the vessel is in New Zealand for bona fide tourism purposes
- the vessel is in New Zealand for a maximum of 24 months
- the vessel will not be sold or offered for sale or
otherwise disposed of in New Zealand without the permission of Customs; and
- the vessel will not be used in a commercial capacity for hire, or for the transport of cargo or the carriage of passengers for reward while in New Zealand.
- the skipper/owner must export the vessel before the expiry of the 24 months period. If the vessel is NOT exported, the skipper/owner will undertake to pay Customs the amount of duty and GST calculated on the vessel at time of importation.

So what the owner is stating is that the vessel recently arrived in NZ under a Temporary Import Entry. So in order to keep the boat in NZ beyond the permit the duty and GST must be paid to the NZ Govt.

But the advert is also stating that the boat had all its taxes paid in Mexico, so if the new owner wanted to live in Mexico on the vessel it can be sailed there and no further taxes need be paid. In Mexico.

I have a similar issue with my own boat that I keep in Fiji. It is a fully imported and taxes paid boat there. But if I sailed her to NZ I would have to pay NZ duty and GST based on its valuation.

Originally Posted by cdocsail

So I guess this person lived on the boat in Mexico, and then sailed from Mexico to New Zealand. So when he is New Zealand, there was no tax?
And if it comes to the US, then tax has to be paid in the US?

In respect to the OPs non specific questions (that could be misconstrued as political criticisms).

Yes I think all your statements can be construed as being true.
1. The owner (or previous owner) imported the boat into Mexico, and lived there for a time.

2. The boat was sailed to NZ.

3, With exception of Mexico, where ever the boat goes next (including if it remains in NZ), it's very likely tax will need to be paid.

Also the owner(s) is NOT a NZ citizen.

I can also add that buying this boat, irrespective of one's own citizenship is very very risky. That is because on the face of the situation the TIE has been breached because obviously the boat is being offered for sale and that is not allowed. Very likely the owner will be required to pay the duty and GST very soon, and/or that the boat may be detained (confiscated) by Customs until taxes are paid.

If my summation is true then advertising this boat was a very very stupid thing to do.

[NevilleCat]

Originally Posted by grantmc

I can also add that buying this boat, irrespective of one's own citizenship is very very risky. That is because on the face of the situation the TIE has been breached because obviously the boat is being offered for sale and that is not allowed. Very likely the owner will be required to pay the duty and GST very soon, and/or that the boat may be detained (confiscated) by Customs until taxes are paid.

If my summation is true then advertising this boat was a very very stupid thing to do.

Thanks for the detail in your post above.
As far as the sale goes I am sure this must happen all the time, and in many places around the world. I would imagine NZ Customs would have a procedure in place to make allowances for this and the broker will presumably have dealt with this in the past as I have seen many vessels advertised for sale in NZ in the same circumstance.

[cdocsail]

Thank you for your genuine replies. ESP grantmc Who took the time to clearly explain the minutiae.

[GordMay]

Ann & grantmc [#9] nailed it.
#9 ➥ https://www.cruisersforum.com/forums...ml#post3898622

Originally Posted by JPA Cate

...
If the boat was built elsewhere than Australia, import taxes will be due on it ...

Originally Posted by JPA Cate

Maybe there is a confusion of terms here? NZ does have import tax, too. The way they compute it is different from Oz. They may call it "duty" rather than "tax"...

[DEAN2140]

The use tax is not in lieu of a sales tax. In California you pay a property tax on your boat every year, just like your house. A sales tax is assessed when you sell your boat, and is usually paid by the buyer.