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Old 22-02-2017, 02:04   #1
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Turkey is looking at new rules -

Just saw this and asked marina about it and it a proposal under discussion - something that must be watched. I guess it is an attempt to get rid of all the USA flag boats here that use Delaware corps as the boat owner.
But if it goes through as proposed here it will kill the winter liveaboards and the rest of the boating industry.
https://www.dailysabah.com/business/...t-turkish-flag
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Old 22-02-2017, 05:54   #2
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Re: Turkey is looking at new rules -

Hi Chuck,


Here's to you a first hand info on the matter;


-Turkey was heavily taxing imported boats; 8 % sales tax + 18 % VAT. As a metter of fact, many turks have chosen to fly USA flag (Delaware or channel islands, etc) to avoid this tax, suffices to set up a company in Delaware for 300-400 USD and 150 USD for yearly renewal.
-To avoid this, the government has passed a new law a month ago; no more sales tax and VAT reduced to 1 %. Great..
-They have also given a one time chance to turkish owners flying USA flag; to switch onto turkish flag without paying any tax or whatsoever.

A similar regulation had been passed 5-6 years back but many USA flagged boat had refused to pass on Turkish flag because they feared that once they start flying turkish flag, new taxes could be imposed later on and there would be no exit.
This time, to make sure that everyone moves to Turkish flag, in addition to these incentives , they plan to penalise those who would still remains in USA flag. The idea is to limit the stay of those boats in Turkey, but again I am talking about the foreign flagged baots whose owner is a turkish citizen. This has nothing to do with any foreign boater. The boating industry is huge in Turkey and nobody can afford such thing. The trouble is, how to achieve this without breaching international rules and bothering a "real" foreign flaggs ?
In my view, they will either give up in the end or find a way to discreminate turkish owned foreign flagged boats in one way or another, whether it be limiting their stay in Turkey, check the VAT status (this is also difficult because there are many french or aussie boats without VAT..) or something else.
But they would never apply those rules to all foreign flagged boats, no way.. I believe this will be cleared out in a week or so and I will post the outcome here as this would interest any fellow who is currently in Turkey or who plans to sail in Turkey.

Cheers

Yeloya
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Old 22-02-2017, 06:07   #3
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Re: Turkey is looking at new rules -

I don't know how the Turkish government could determine the nationality of the manager of a US flagged vessel owned by a Delaware LLC.

A reason for a Delaware LLC is to shield the human "owner."
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Old 22-02-2017, 06:45   #4
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Re: Turkey is looking at new rules -

Thanks Yeloya again for keeping us informed on the situation in Turkey.
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Old 22-02-2017, 08:48   #5
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Re: Turkey is looking at new rules -

Quote:
Originally Posted by yeloya View Post
Hi Chuck,


Here's to you a first hand info on the matter;


-Turkey was heavily taxing imported boats; 8 % sales tax + 18 % VAT. As a metter of fact, many turks have chosen to fly USA flag (Delaware or channel islands, etc) to avoid this tax, suffices to set up a company in Delaware for 300-400 USD and 150 USD for yearly renewal.
-To avoid this, the government has passed a new law a month ago; no more sales tax and VAT reduced to 1 %. Great..
-They have also given a one time chance to turkish owners flying USA flag; to switch onto turkish flag without paying any tax or whatsoever.

A similar regulation had been passed 5-6 years back but many USA flagged boat had refused to pass on Turkish flag because they feared that once they start flying turkish flag, new taxes could be imposed later on and there would be no exit.
This time, to make sure that everyone moves to Turkish flag, in addition to these incentives , they plan to penalise those who would still remains in USA flag. The idea is to limit the stay of those boats in Turkey, but again I am talking about the foreign flagged baots whose owner is a turkish citizen. This has nothing to do with any foreign boater. The boating industry is huge in Turkey and nobody can afford such thing. The trouble is, how to achieve this without breaching international rules and bothering a "real" foreign flaggs ?
In my view, they will either give up in the end or find a way to discreminate turkish owned foreign flagged boats in one way or another, whether it be limiting their stay in Turkey, check the VAT status (this is also difficult because there are many french or aussie boats without VAT..) or something else.
But they would never apply those rules to all foreign flagged boats, no way.. I believe this will be cleared out in a week or so and I will post the outcome here as this would interest any fellow who is currently in Turkey or who plans to sail in Turkey.

Cheers

Yeloya
How's it going Atllia? Thanks for the informative post.

Speaking of Turkey, and you ARE the expert on all things Turkish....

What's your feeling on the latest news of Royal Caribbean's decision to no longer sail to Turkish ports? Guess there are other cruise lines that are doing same as well.

I know you've dispelled much of whatever negative hype there has been in the past. Just wondering if anything's changed.

BTW, we're still not concerned and still plan on chartering there. Top of our list is Marmaris. Ummm...know of anybody that have cats for rent? :big grin:

Jerry
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Old 22-02-2017, 09:52   #6
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Re: Turkey is looking at new rules -

I know of a few cruisers who would skip the Med if they couldn't leave their boats in a secure and reasonably priced Turkish marina or boat yard for several months of the year. I hope this rule aimed at Turks (or so it seems) will not be misinterpreted. Thanks for the further explanation. I wish the article had given the same information.
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Old 22-02-2017, 10:45   #7
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Re: Turkey is looking at new rules -

Thank you for this timely information. I have a definite interest with a British registered yacht in Turkey all year round. I suspect this has some way to go yet (admittedly i want to think this!) and definitely the potential for inaccurate reporting and/or misinterpretation. Remember the Greeks also have some legislation in process and it has gone through several iteratations and is still not clear or implemented. No reason to panic yet. One swallow doesn't make a summer; one press clipping doesn't make legislation.
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Old 22-02-2017, 11:02   #8
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Re: Turkey is looking at new rules -

Quote:
Originally Posted by Saleen411 View Post
How's it going Atllia? Thanks for the informative post.

Speaking of Turkey, and you ARE the expert on all things Turkish....

What's your feeling on the latest news of Royal Caribbean's decision to no longer sail to Turkish ports? Guess there are other cruise lines that are doing same as well.

I know you've dispelled much of whatever negative hype there has been in the past. Just wondering if anything's changed.

BTW, we're still not concerned and still plan on chartering there. Top of our list is Marmaris. Ummm...know of anybody that have cats for rent? :big grin:

Jerry

I saw that today and do not remember the exact numbers but a lot of cruise ships have taken Turkey off their routes. I think Kusadasi is scheduled for only 163 or so ships this year where they had high 200s last year and I think the number was 443 in 2015. Kusadasi is going to suffer and suffer badly this year. In addition there are few cruising boats here with the chandlery closing due to no sales. We are getting our parts from going to Izmir or having a guy who repairs boats order them for us.

As for safety we have no issue. It actually seems safer than last year.
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Old 23-02-2017, 00:19   #9
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Re: Turkey is looking at new rules -

Hi Chuck and Atilia
Thanks for all the info and keeping us up to date.
Really usefully info and takes a lot of the speculation off the table
Much appreciated
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Old 23-02-2017, 00:35   #10
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Re: Turkey is looking at new rules -

Quote:
Originally Posted by yeloya View Post
Hi Chuck,

But they would never apply those rules to all foreign flagged boats, no way.. I believe this will be cleared out in a week or so and I will post the outcome here as this would interest any fellow who is currently in Turkey or who plans to sail in Turkey.

Cheers

Yeloya
Gunaydin Yeloyal -- I would never say "no way" - it is a government entity and you never know what those guys are going to do - as an old saying in America goes we will keep our powder dry but prepare for alternative arrangements in case the folks in Ankara decide that 90-120 is the way to go
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Old 23-02-2017, 01:39   #11
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Re: Turkey is looking at new rules -

Quote:
Originally Posted by yeloya View Post
Hi Chuck,


Here's to you a first hand info on the matter;


-Turkey was heavily taxing imported boats; 8 % sales tax + 18 % VAT. As a metter of fact, many turks have chosen to fly USA flag (Delaware or channel islands, etc) to avoid this tax, suffices to set up a company in Delaware for 300-400 USD and 150 USD for yearly renewal.
-To avoid this, the government has passed a new law a month ago; no more sales tax and VAT reduced to 1 %. Great..
-They have also given a one time chance to turkish owners flying USA flag; to switch onto turkish flag without paying any tax or whatsoever.

A similar regulation had been passed 5-6 years back but many USA flagged boat had refused to pass on Turkish flag because they feared that once they start flying turkish flag, new taxes could be imposed later on and there would be no exit.
This time, to make sure that everyone moves to Turkish flag, in addition to these incentives , they plan to penalise those who would still remains in USA flag. The idea is to limit the stay of those boats in Turkey, but again I am talking about the foreign flagged baots whose owner is a turkish citizen. This has nothing to do with any foreign boater. The boating industry is huge in Turkey and nobody can afford such thing. The trouble is, how to achieve this without breaching international rules and bothering a "real" foreign flaggs ?
In my view, they will either give up in the end or find a way to discreminate turkish owned foreign flagged boats in one way or another, whether it be limiting their stay in Turkey, check the VAT status (this is also difficult because there are many french or aussie boats without VAT..) or something else.
But they would never apply those rules to all foreign flagged boats, no way.. I believe this will be cleared out in a week or so and I will post the outcome here as this would interest any fellow who is currently in Turkey or who plans to sail in Turkey.

Cheers

Yeloya

Seems like an exceptionally clumsy way to do it.

Ankara (which is far from the sea, as we see here) should study the EU experience with this issue. The EU is also given to clumsy and counterproductive regulation (like the very stupid Schengen visa rules), but they handle foreign yachts quite well.

Basically, in the EU, a foreign flagged AND OPERATED yacht gets 18 months "temporary importation", during which no VAT is due. You can reset the clock by sailing out for one day -- then you get another 18 months.

The key here is who OPERATES the vessel. What is important is SUBSTANCE, not the empty formality of the flag. If there are EU citizens OR RESIDENTS involved, then you have no right to "temporary importation" and you are obligated to pay taxes, without regard to the flag.

This neatly solves the problem of how to get your own citizens and tax residents into the system, without burdening bona fide foreigners. It removes the flag from the equation. If Ankara would do the same, then there would no longer be any reason to avoid the Turkish flag, as the Turkish flag does not provide any disadvantages.

The root problem is obsession with the flag -- form over substance. Get rid of that, so that you can't avoid taxes with an empty formality like flagging somewhere else -- and you solve the problem.


Great news about the tax relief; congratulations. Wish other states would follow suit.
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Old 23-02-2017, 01:42   #12
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Re: Turkey is looking at new rules -

Quote:
Originally Posted by Jason Flare View Post
I don't know how the Turkish government could determine the nationality of the manager of a US flagged vessel owned by a Delaware LLC.

A reason for a Delaware LLC is to shield the human "owner."
The boats are registered on the company and as you said there is only the name of this company on the registry. However, port authorities (at least in Turkey) are also asking the Corporation documents on which the name of owner/s, or the beneficiary or board members that control the company are written. If any of those are turkish citizen, the boat is considered as owned by a Turk.

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Old 23-02-2017, 02:01   #13
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Re: Turkey is looking at new rules -

Quote:
Originally Posted by chuckr View Post
Gunaydin Yeloyal -- I would never say "no way" - it is a government entity and you never know what those guys are going to do - as an old saying in America goes we will keep our powder dry but prepare for alternative arrangements in case the folks in Ankara decide that 90-120 is the way to go
I agree that the government can take any stupid decision any time but don't forget that there is a huge lobby close to the government running 4-5 largest marinas and boat yards in Turkey..
Yesterday I talked to the head of maritime affairs in Ankara and he confirmed that the regulation is due in a week or so but they will make sure that foreign cruisers are not impacted.

Let's wait and see..

Cheers

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Old 23-02-2017, 03:05   #14
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Re: Turkey is looking at new rules -

Quote:
Originally Posted by Jason Flare View Post
I don't know how the Turkish government could determine the nationality of the manager of a US flagged vessel owned by a Delaware LLC.

A reason for a Delaware LLC is to shield the human "owner."
If they really want to know, it's not that hard to penetrate a "basic" LLC and find the real owner. An "basic" LLC is primarily about shielding the owner from Liability not the Identity.


But I think this rule is designed to avoid the entire LLC issue. A Delaware LLC boat would have limited time in Turkey each year regardless of the owner.

I really don't think the law is intended to target boats owned by foreigners but like the EU Schengen visa rules, there is the risk that they get caught up in a law intended to address a different issue.
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Old 23-02-2017, 12:42   #15
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Re: Turkey is looking at new rules -

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I saw that today and do not remember the exact numbers but a lot of cruise ships have taken Turkey off their routes. I think Kusadasi is scheduled for only 163 or so ships this year where they had high 200s last year and I think the number was 443 in 2015. Kusadasi is going to suffer and suffer badly this year. In addition there are few cruising boats here with the chandlery closing due to no sales. We are getting our parts from going to Izmir or having a guy who repairs boats order them for us.

As for safety we have no issue. It actually seems safer than last year.

Thanks for the reply....I'm glad to receive your input. I apologize for the bit of thread drift, but this news just came out today.

I've not heard of any safety issues from the few friends I have that live in Turkey, and am actually surprised at what the cruise ship companies are doing.

I still plan on going soon.
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