Australian International Boat Purchase 'Legal Tax Avoidance'

[ImSailingAway]

Hopefully there are some Australians on here who may be able to answer this question.

I'm looking at purchasing an international boat (no Aus tax paid) from the Pacific and sailing it back to Australia.
I understand that Australian citizens importing private use boats into Australia will be liable for duty and tax (GST) ~15% on purchase + insurance + transit costs as soon as the boat enters Australian waters.

I really have 3 scenarios I've been looking into and would appreciate any informed opinions:

Scenario 1:
I have read various posts relating to owning a boat in a 0% tax country, such as the Cayman Islands, via a business that you would have to create for the purpose of the Cayman Islands entity owning your boat / it's not owned by you personally. Is Australian Border Force wise to this, is it worth doing or are there too many complications?

Scenario 2:
I hold dual citizenship (Aus and UK). Could I purchase a boat through a company I establish in the UK (similar to the Cayman Islands idea) that's already had its VAT paid or would I still encounter issues with the Australian Border Force wanting their duty and tax?

Scenario 3:
There's no fool proof way around avoiding the duty and tax if me, an Australian citizen, brings a boat into Australia. I should just factor those costs in and get on with it.

[chrisr]

i am dual national (australian + uk), with a german registered vessel.

it is my understanding (not tested) that i could bring the vessel into australia for up to 12 months, without paying 10% duty + 15% gst = 25%.

our original plan was to bring the boat to australia, then sail to noumea once a year to 'reset the clock', however subsequently we've decided to remain outside australia anyway.

years ago i did import a boat into australia, using an australian business to avoid the gst and defer the duty, but these days customs are bit smarter and i don't think you would get away with it now

it is my understanding that if you flag the vessel outside australia, you can make use of the 12 month rule because you re dual national. i do not think an ozzie can do it ie if an ozzie brings a boat to australia they will be required to import it immediately even if foreign flag. however you (and i) can get away with it by claiming uk citizenship.

however gota repeat some of this is not checked / tested and if there is enough money involved you really need to consult an expert.

finally why do you want the boat in australia ? keep the boat offshore - 25% will pay a lot of airfares to somewhere nicer...

cheers,

[HankOnthewater]

As far as the 3 scenarios concerns, i have no expertise.
For australia import duty is 5%, Gst is 10%

[ImSailingAway]

Originally Posted by chrisr

i am dual national (australian + uk), with a german registered vessel.

it is my understanding (not tested) that i could bring the vessel into australia for up to 12 months, without paying 10% duty + 15% gst = 25%.

our original plan was to bring the boat to australia, then sail to noumea once a year to 'reset the clock', however subsequently we've decided to remain outside australia anyway.

years ago i did import a boat into australia, using an australian business to avoid the gst and defer the duty, but these days customs are bit smarter and i don't think you would get away with it now

it is my understanding that if you flag the vessel outside australia, you can make use of the 12 month rule because you re dual national. i do not think an ozzie can do it ie if an ozzie brings a boat to australia they will be required to import it immediately even if foreign flag. however you (and i) can get away with it by claiming uk citizenship.

however gota repeat some of this is not checked / tested and if there is enough money involved you really need to consult an expert.

finally why do you want the boat in australia ? keep the boat offshore - 25% will pay a lot of airfares to somewhere nicer...

cheers,

I’ve never heard of the 12 month rule before, maybe someone else can confirm?
I’ve also been through the ABF website and they simply state an Aus resident will owe duty and tax as soon as the boat enters Australia, they don’t talk to any scenario concerning dual citizens.
It would be nice to have the boat in Australia, enjoying it with friends and family, before sailing away…

[Tin Tin]

Looks like a hassle to me



https://www.abf.gov.au/entering-and-...pleasure-craft

[El Pinguino]

Dual citizenship matters not a zot.
Was quite a few years ago but my boat was effectively impounded - until I paid up. Took a while to get survey and valuation.

Met someone a few years back in Puerto Williams who as an Australian who had turned up in Oz with a HR. Got away with not importing her - but told to never ever thinking of bringing her back.
My advice - buy offshore - stay offshore.

[Anders]

Forget Scenario 2 unless you are certain that HMRC can't get your money in Australia. Owning a boat in a UK company means that you will be taxed for Benefit In Kind and it would be cheaper to import the boat.

[fxykty]

Originally Posted by ImSailingAway

I’ve never heard of the 12 month rule before, maybe someone else can confirm?

I’ve also been through the ABF website and they simply state an Aus resident will owe duty and tax as soon as the boat enters Australia, they don’t talk to any scenario concerning dual citizens.

It would be nice to have the boat in Australia, enjoying it with friends and family, before sailing away…

The 12 month import exemption is called a Control Permit (CP). Every non-Australian owned boat that comes to Australia for a visit can qualify for a CP. A CP is for 12 months and it can be extended twice, for a total of 3 years.

CP is for only for non-residents Australia, which can include Australian citizens that can prove residence in another country and don’t come to Australia to live (that is my situation). Scenario 2 doesn’t apply.

If you own the boat and are a resident (either Australian citizen with a physical address in Australia, or a non-citizen with a permanent resident visa and physical address in Australia) then you cannot get a CP for your boat and you must import it. The boat’s registration country doesn’t matter. Your citizenship doesn’t matter. And your scenario 1 will fail if it can be shown that you are a beneficial owner of the boat.

Factor in the costs to import the boat.

[chrisr]

Originally Posted by HankOnthewater

As far as the 3 scenarios concerns, i have no expertise.
For australia import duty is 5%, Gst is 10%

yep...sorry my bad.

wrong country !

cheers,

[chrisr]

another option is to make a eg non-australian resident friend or family member the owner of the vessel. easy enough - we sold our boat to my grandson for 1 euro (which reminds me, he still hasn't paid this !)

do you have anyone in the uk who would do this ?

then flag the vessel somewhere convenient...poland for instance

should not be any uk vat or tax implications because you are not importing the boat into uk or earning any income

many ways to skin a cat...

cheers,

[Montanan]

The import duty and HST will be due upon arrival if you are a resident of Australia. Such taxes are privilege taxes associated with your residnency.

If you are a non-resident than one can pursue a temporary importation status, i.e., the one year cruising license.

This is pretty much standard all over the world.

As to Ausie:

https://www.abf.gov.au/entering-and-...pleasure-craft

Snipet:

Control Permits
A Control Permit will be issued to the Master of the craft if we are satisfied the craft is transiting Australia for non-commercial purposes. Control Permits may be issued for a period of 12 months, or the length of the Master's visa, whichever is less. Extension of the permit may be granted on application, provided that you meet eligibility requirements and have an appropriate visa.

A person eligible to apply for a Control Permit must be a tourist or a temporary resident of Australia. Australian citizens are not eligible for a Control Permit unless they have overseas residency. Satisfactory evidence of overseas residency is required.

For a Control Permit to be issued, the craft must meet the following criteria:

craft must have arrived from overseas and will be scheduled to depart for overseas
craft must have arrived under its own power and not as cargo
craft must be transiting Australia for non-commercial purposes i.e. is not engaged in the commercial carriage of cargo or passengers
craft may be privately or corporately owned (however, a Control Permit is not granted where a craft is owned by a corporation and more than 50% of the owners of the corporation are Australian residents)
craft must not be employed for any activities of a commercial nature (e.g. charter, hire or lease)
craft, or parts of the craft, are not to be offered for sale, sold or otherwise disposed of.
However, the craft may remain in Australia for repair or refit.
Control Permits are not issued if the craft is owned or operated by an Australian resident unless exceptional circumstances apply.
If circumstances of the craft's presence in Australia change, you are required to advise the Australian Border Force. Failure to do so can result in a Control Permit being revoked and the craft being deemed imported at which time payment of duty and tax will be required.

What if the Master wants to fly home and come back later?
This is possible but you must advise us and make arrangements for appropriate control over the craft.

Further information can be obtained from our office at your intended port of arrival.

Temporary importation of vessels
If your visa allows you to reside in Australia for a limited period you may be required to temporarily import a craft into Australia. Temporary importation without paying customs duty and tax is subject to:

The vessel being exported within 12 months of arrival
A security in cash or an appropriate bank guarantee being provided equal to the duty and tax that would otherwise be payable.
Return of security
If a cash security has been given and a cash refund is sought you must give us advance notice at the proposed port of departure before you leave.

Formal Importation
If you are an Australia citizen, permanent resident of Australia or migrating to Australia on a craft purchased outside Australia, importation of the craft is required. Customs duty and tax are payable on any craft imported into Australia upon its arrival.

[old pirate]

Have just been through this scenario. The only legal way is to have someone else/entity as the legal owner and register it small “small ships” or in Poland. HOWEVER bf can at their discretion make you pay a bond of up to 15.5% till such time as the boat leaves Au waters !
In the end as we had been at sea for a while and looked quite “shabby” we got a valuation from a sympathetic source and paid up.

[PamplomBlue]

I've bought a boat that is currently registered Philippines. This is my second purchase and this boat will be registered via AMSA as an Australian-registered ship.

The process can be done internationally and duty etc is when the boat Aussie shores.

An Australian registered ship (your home) internationally and for some reason you front an Aussie embassy and your boat is protected via AMSA.

Our first boat. US registered. In Canada. My wife and I have Aussie Passports.
There was drama at Slip in Victoria BC. We just happened to be there. It was a mess. Police, Maritime Authority. Two blokes were arrested etc.
The approach from the authorities we were guilty! With the assistance of others, they managed to convince the police that we were not involved. We honestly had no idea what they talking about. We let on board and searched the boat. We had absolutely nothing to worry about.

As an example. The "found" what the police were looking for. The Canadian Gov seized the yacht. The US Gov are not going to assist Australian Passport owners. Neither would the Canadian Gov.

After that experience, My boat will be an Australian registered Ship. I have spoken to AMSA to confirm that the Australian Gov will assist their citizens and property. That's worth 15% and more IMO. Think about it and contact AMSA.

Cheers. Bryce Peterson

[El Pinguino]

Registry and Import are two different things. You can import and leave the boat foreign flagged - which is what I did.

Or..

You can keep the boat out of Australia and not pay to import but put it under Australian flag.

Or ..

Import and reflag in AU

Or..

Keep offshore under foreign flag.

If the OP is serious about bringing a boat into Australia and keeping it there just suck down the cost and go with Scenario 3 in the first post. The option still remains of leaving her UK flagged if he is a dual cit assuming she is currently UK flagged.