Tax on foreign yachts in Phillipines ? How to buy a boat?

[kaivai]

Considering purchasing a foreign owned (USA) yacht (in the next 2 weeks or so) that's currently in the Philippines (Cebu) - boat will stay in Philippines for a couple of years at least. Am told there is no tax on boats like this. Any experience on this or other information would be helpful. Also, never bought a boat before. How do I make the transaction, get ownership clear and avoid problems in the future. I live in USA but will likely never bring the boat here but cruise the south pacific instead.

[pbmaise]

Originally Posted by kaivai

Considering purchasing a foreign owned (USA) yacht (in the next 2 weeks or so) that's currently in the Philippines (Cebu) - boat will stay in Philippines for a couple of years at least. Am told there is no tax on boats like this. Any experience on this or other information would be helpful. Also, never bought a boat before. How do I make the transaction, get ownership clear and avoid problems in the future. I live in USA but will likely never bring the boat here but cruise the south pacific instead.

Kaivai, Yikes I am lucky to catch your message. Directly message me critical posts like this..or give me a heads up.

All you have to do is fill in the back of the US Coast Guard Certificate and sign in front of a notary upon US soil. Where will you and the owner be? You then send the signed document to the document center. This means you either must both go to the US Embassy in Manila or....you may be lucky and they will do this transaction for you at the

https://ph.usembassy.gov/us-consular-agency-cebu/

U.S. Consular Agency in Cebu:

Location: Waterfront Hotel, Lower Ground Floor, Lahug, Cebu City
Email: ACSInfoCebu@state.gov
Telephone: +63 (032) 231-1261

You send the completed document per instructions found at:
https://www.dco.uscg.mil/Our-Organiz...est-News-Copy/

The fees to transfer ownership are listed on the US Coast Guard site...there are no Federal Taxes.

In my case, I purchased a US flagged vessel in The Marshall Islands and the owners and I went to the US Embassy there to sign the document and have it notarized.

As long as you don't bring the vessel to the USA you are not liable to any state to pay a state sales tax. If you do eventually bring it to the USA you may be required to pay a tax.

There is no tax collected by the Philippines.

However, be certain you have the paperwork when the vessel entered the Philippines. Also be sure to ask for paperwork for the last port before the vessel was brought to the Philippines.

When you are ready to leave the Philippines be sure to bring the bill of sale with you and those entry papers into the Port Authority so you have completed documents for your next port of call.

There is a small chance you are not buying a US Coast Guard documented vessel. Some states provide title for a vessel. This is a bit more complicated and you may be liable for a tax.

Where is the seller and where are you?

p.s. I completed a separate bill of sale also with an attachment of all items that were to be left on the vessel when the owners left. That is more or less just a memo of understanding between buyer and seller and helps provide some documentation so the transaction is better understood by both parties. I just wrote it out on a word processor.

[kaivai]

Thank you!, We both will be in Cebu, but its a US vessel and we will be returning to Seattle where the paperwork could take place IF the deal goes through.

I suspect the paperwork incoming to Philippines AND the previous port will be scant if at all, as the boat has been docked and neglected for 4-5 years, partially sunk and most everything was removed.

[pbmaise]

Hmmm.... "neglected for 4-5 years, partially sunk and most everything was removed". Either you are a smart cookie and know exactly what you are getting yourself in for, or have no idea. Hopefully, it is the former.

A boat without arrival paperwork is only problematic and perhaps a little time consuming.

Technically to leave the Philippines you must present the arrival paperwork.

Since I am almost certain this vessel came to the Philippines from Malaysia, the two likely ports of check in were Puerto Princesa and Cebu. The seller should be able to tell you which. They also likely have some record of the time frame they arrived. You may have to go in person to the port authority and have them track down entry paperwork if it was lost. Be patient and expect to make several trips.

There is the possibility that the vessel never checked into the Philippines. If it never checked in...it is almost like Hotel California. You can never leave. Well that might not be entirely true.

Now don't hold me to this...but my experience with check in at Kota Kinabalu is they never have asked me for the exit paperwork. This means you might be lucky and check into Malaysia and suddenly find you get your vessel papered. Absolutely do not try this anywhere else especially Singapore. You may find your vessel turned away and ordered to return for proper exit paperwork.

By now you should have the vessel name...you can check to see if the seller has been paying the annual document fee. Go to:

https://cgmix.uscg.mil/psix/psixsearch.aspx

Based upon what you just wrote there is a chance the seller did not pay to renew the registration. Not a giant deal...the vessel must reinstated.

EXPIRED CERTIFICATES OF DOCUMENTATION: If the Certificate of
Documentation has expired, owners may return the vessel to an active status. Complete
Form CG-1258 Application for Initial, Exchange or Replacement of Certificate of
Documentation, Redocumentation, and submit the form with the fee of $84.00, PLUS
additional applicable fees for any trade endorsement(s) other than Recreation or Registry

https://www.dco.uscg.mil/Portals/9/D...dgxia6sw%3D%3D

The reinstatement process can be done concurrently with the transfer of ownership which adds a separate fee.

I am just curious....do you have any idea what you are getting yourself in for?

Did the owner get the engine running again, and what is the status of the lifting keel?

[kaivai]

You had a lot to say there, and I appreciate every word of it!

I do have and idae of what I'm getting into. I have some MUST HAVEs before any deal, it floats, engine and drive has no problem, keel works, sails are solid and useable. Any 1 of these kills the deal or drastically drops the price - which is already pretty low. I intend to work on the keel right away as I think its just an electrical issue. I used to crew the boat and lived about around 2 years. I really enjoy the design and love the keel, thats the attraction. I AM NOT emotionally involved with it and am prepared to walk away if its too much bad for too much green.

I will see it Friday and follow up with you over the weekend. If you search KAIVAI you will see another thread or two regarding this boat and my situation.

THANK YOU!!!!!

[kaivai]

Hello,


I did purchase the boat for an extremely good price, we made a deal within 48 hours of being there. The previous owner who basically abandoned it there 5 years ago, took my offer, washed his hands from it and promptly left. That was on Jan, 29th. The sales paperwork was completed and notarized on it yesterday in Seattle. USCG application will go out next week.



I spent 6 weeks on the boat in Cebu at Zeke's Marina in Jan, Feb, March and got quite a bit done. Hired 2 local girls to work 40 hours a week for 6 weeks cleaning it so its now spotless, clean and dry! The swing keel works now after some basic hydraulic and electrical work. The engine runs and has a new raw water impeller. Brought the German made Reckmann R3 furler and some steering U-joint couplers back to the USA and am having success in rebuilding those here in my shop and sourcing local parts. Hyde sails in Lapu-Lapu sewed new covers on the main and Genoa which are like new. The in-mast furler which was frozen solid is re-fit with new thrust bearings and custom Delrin bushings - sourced and fab-ed locally to my specs. All the lines were pulled and cleaned and replaced as needed but largely everything looks fine and functional. Solar panels still work good enough to keep up the new battery and a new bilge pump and float switch is installed.



Upon my return to Cebu in a few months I will pull the windlass and rebuild the backing plate with new stainless, rewire the connections there and service the windlass IF IT STILL runs - didn't get this one figured out yet.


After sitting 5 years the dingy still holds air and the outboard still runs. Have a local canvas guy ready to build new dodger and bimini when I return. One or both of my sons (13 and 15yr old) will go on the next trip and get SCUBA certified there. Water and diving is awesome!



It will be a forever project of course - as any boat is, but I hope to get out sailing on my next trip there or at least by Feb next year. WILL NOT be waiting in the marina until everything is perfect, must get wind in the sails ASAP!!!!!


Most importantly summary note, NO ONE WORKS ON THIS BOAT BUT ME, or otherwise under my direct supervision. Its been a huge learning curve but this is one of the most important thinks to know. ALL of the local workers are pretty good and easy to work with but CAN NOT be left to figure out the details, make their own decisions and do the work unsupervised. Fortunately I can do my own work and have success in getting along with the folks there.


Thanks so much for your help and thoughtful advice !!!!


Tim