Tax confusion

[scargo]

Originally Posted by MrsBurkie

So we are required to register in Canada just on the merit that we are citizens of that country? Does this also apply if we never intend to enter Canadian waters? This is where I am confused, as we have been told that we can absolutely register the vessel in Florida, or any where else for that matter. BVI's, Panama etc.

No not at all. You can register your boat in any country that allows foreign citizens to register there or you can create a company in some countries or states (the most popular I would guess is Delaware ) have the boat owned by that company and register there.
But registering in Canada is free and very easy to do and you are not required to pay any taxes until you bring the boat here. And even there, you are allowed to bring the boat for a temporary period of time for repairing. A lot of boat owners from Quebec keep their boat (in-bond) in Champlain Lake (US side) in summer and in Canada in winter.

Check Distant Shores III the latest boat of one of the most famous sailing Canadian couples. It is registered in Jersey.


Go to minute 1:10

https://youtu.be/TmvcDIv1OCg

[skalashn]

Some of the advice given here is misleading.

- You need paperwork for your boat to travel internationally. US state registration is only good for the Bahamas and perhaps some other islands but who wants to take that chance.
- USCG "documentation" is not possible unless you are a US citizen, even through a corporation https://www.dco.uscg.mil/Our-Organiz...r-FAQ/#anchor9
- Transport Canada registration (do not confuse with "pleasure craft license") is not free as mentioned but CDN$250 one-time fee. https://www.tc.gc.ca/eng/marinesafet...menu-4427.html
- To register off-shore (BVI etc) as a Canadian citizen you will most likely have to set up a local corporation which will not make sense financially for a small sailboat. If you find a country that makes it easy and cheap for foreign citizens please let us know.

[MrsBurkie]

Originally Posted by scargo

No not at all. You can register your boat in any country that allows foreign citizens to register there or you can create a company in some countries or states (the most popular I would guess is Delaware ) have the boat owned by that company and register there.
But registering in Canada is free and very easy to do and you are not required to pay any taxes until you bring the boat here. And even there, you are allowed to bring the boat for a temporary period of time for repairing. A lot of boat owners from Quebec keep their boat (in-bond) in Champlain Lake (US side) in summer and in Canada in winter.

Check Distant Shores III the latest boat of one of the most famous sailing Canadian couples. It is registered in Jersey.


Go to minute 1:10

https://youtu.be/TmvcDIv1OCg

Thank you. That was very helpful. However, I think you are confusing licensing and registration. I know licensing at the province level is free, but there is a cost to register in Canada.

[Belezar]

Talk with a tax attorney. Depends on the cost of the boat but it can be quite expensive to title in CA. Lots of moving parts. A friend of mine said that it would have cost him 20% to flag in Canada for a boat bought elsewhere. For a modestly priced boat that might not be a deal breaker. For him it was $400k. He registered in a foreign country.

[scargo]

Originally Posted by MrsBurkie

Thank you. That was very helpful. However, I think you are confusing licensing and registration. I know licensing at the province level is free, but there is a cost to register in Canada.

No ! I know I said it's free but there's a 250$ fee and I think the registration is valid 10 years. But then if you require an MMSI number it will be free. The license is free, but it is not at the province level. It is still federal jurisdiction. The only thing provincial in it it's the two first characters in the number displayed on the bow of the boat (NF, NS, PE, NB, QC, ON, etc)



Some links:
All the info from TC about registration

Vessel Registration - In Bond Vessels


Good luck.

[Svsumurun]

Originally Posted by skalashn

Some of the advice given here is misleading.

- You need paperwork for your boat to travel internationally. US state registration is only good for the Bahamas and perhaps some other islands but who wants to take that chance.
- USCG "documentation" is not possible unless you are a US citizen, even through a corporation https://www.dco.uscg.mil/Our-Organiz...r-FAQ/#anchor9
- Transport Canada registration (do not confuse with "pleasure craft license") is not free as mentioned but CDN$250 one-time fee. https://www.tc.gc.ca/eng/marinesafet...menu-4427.html
- To register off-shore (BVI etc) as a Canadian citizen you will most likely have to set up a local corporation which will not make sense financially for a small sailboat. If you find a country that makes it easy and cheap for foreign citizens please let us know.

This is the answer that makes the most sense ... you need the boat federally registered to go most places ... that's the really important part !

[skipmac]

Originally Posted by S/V Adeline

It's my understanding that to register in Florida you have to be a resident (ie:FL state ID and home address required to register auto)

Not according to the main office in Tallahassee. If you are deemed liable FL wants your money no matter where your official residency, citizenship or cruising plans. However, taxes are collected on a county basis and some of the local agents are totally clueless as far as the rules.

[skipmac]

Originally Posted by Svsumurun

This is the answer that makes the most sense ... you need the boat federally registered to go most places ... that's the really important part !

Not in my experience nor that of some other forum members. I cruised the Bahamas and Caribbean for years with a boat state registered in GA without a problem. Jim Cate has been cruising the south Pacific for years with a state registered boat also with no problems.

[Knot Safety]

I have been through this. Canadian citizens who just bought a boat in the Caribbean.

Register it in Canada. Cost is $250 (or maybe 750???) and quite straight forward. You can do it all yourself, unless you need a tonnage measures if over 12 meters length. Then you need an official tonnage measures to come and do things. Shop around on that.

Search on the transport Canada website. Quite well set up for forma and fees.

You will not have to pay any tax on the boat if you move it out of Florida promptly. You will pay full tax on it when you take it back to Canada.

I would suggest following this route and avoiding any tax for as long as possible. If you are not returning to Canada for a couple of years and don’t have to pay until you return, that is a good thing. Many events can happen in the intervening time that changes your plans. Once the tax man is paid the money is gone from you.

Register in Canada. Keep it outside of Canada for as long as possible.

And please, ask questions if you see fit. But no need to argue with me on this.

[markpierce]

It is obvious to me from the above responses that you should contact the appropriate taxing authorities (Florida and Canada) to determine your course of action.

In my situation, bought the boat in China but paid use tax based on where my boat became docked in California (sales/use tax rates vary among jurisdictions in California).

[denverd0n]

Originally Posted by skalashn

You need paperwork for your boat to travel internationally. US state registration is only good for the Bahamas and perhaps some other islands but who wants to take that chance.

I have never heard even one, single, first-hand report of anyone being turned away from any island in the Caribbean because their boat was U.S. state registered, instead of federally documented. I'm not saying that you SHOULDN'T federally document it; if you want to travel internationally I think that's a good idea. But I think the odds of being turned away because you only have state registration (again, in the Caribbean) are, for all practical purposes, nil.

[sck5]

No you dont necessarilyhave to pay taxes anywhere. Canada works like the state taxes in the USA - taxes due when the boat arrives at the border (or stays enough days in a given state) even if you already registered it (or documented it in the USA) a long time ago. The procedure in FL is: Buy the boat and get it out of Florida in 90 days so no tax owed in Florida. Register it in Canada so you can put a Canadian flag on the back. Sail off to the Caribe. Eventually sell the boat or sail it home at which point you will owe tax to the Canadians when you pass customs there.

I did exactly this and actually never paid any tax at all on the boat because I left the USA soon enough to not owe tax and sold it within a short time after coming back. It was very nice to discover that you can spend that money on your refit instead of the tax people if you simply leave the country and dont come back until you are ready to sell (and maybe not even then)