Importing a Yacht from US to Australia

[sepeteus]

Originally Posted by MarkJ

Unflagged or incorrectly flagged boats will be impounded in any country you go to, or when you go back to Australia.
It can be done, of course. A good example was Kerry Packers boat Galu was Panamanian registered to save $5 million tax. But with that sort of saving the lawyers could afford to set up a holding company (or whatever) to work it out.

On my point earlier about the incidentals, I am not joking. Thats the amount on non-negotiable, absolutely must pay, cash in hand, pay now not later, stuff. believe me. Thats what I am doing now, as in I pick the boat up on Monday, so my info is current.

here is an example of how much money you need in cash in extra contingency: Nic and I go to the airport in Fort Lauderdale at 6am for a flight to St Maartin in the Caribbean on a one way air tickets ($600) because we intend to sail out. Counter bitch at American Airlines says we need a return ticket as I have no letter from a Crew Agency saying I am sailing out. I'm owning the friggin boat! So I have to have an air ticket out to the closest island AA flies to which is the Dominican republic - not back to Ft Lauderdale. Cost $600 US! Counter staff dont have Visa card facility for international cards. So I have to ATM $600, but the ATM max is $300 so I incur 2 x $22 bank fees (Now $644!).
Fly to St Martin and try to get refund. Refund wont include $120 in taxes or the $44 - $164. Refund will take 20 days payable only by cheque to postal address in Australia.

Now, don't tell me this whole importing a boat is cheap. Its not. Its expensive and the incidental expenses are HIGH. and you MUST have the money to cover them all. Including accommodation. We have not paid less than $60 per night in dormitories! So the month we have been away 30 x $60 = $2k. And food. remember supermarket shopping without a kitchen is problematic ie expensive. Too many cheap restaurants and fast food.

I've paid $350 bank fees (both sides) in transfering money for deposit and full amount. Thats not including $22 every time I use an ATM! Don't say "withdraw lots and the % is lower. You wont want to walk around a forign country with $500 in your pocket!

And last but not least: The boats arn't free! You hear these great stories about how people can't sell their boats and dump huge price cuts. Offer 'low ball' etc. Well, don't believe it! We found getting a 10% discount off the list price very difficult. A lot of prices above market and not negotiating.

And the brokers are aware. Its used to be rich Americans storming the world paying over the top prices. Now its cashed-up Australians storming the USA paying over the top prices and every broker knows it.
That might not be true but its the perception!


My advice: Yes you will buy cheaper, but take a WAD LOAD OF CASH!

I was seriously looking Caribbean for a Beneteau and ended up with South Australian one. Prices are down here as well as world wide so buyer's market.

[spawnywhippet]

Anyone able to offer advice on what charges, fees and taxes that I (as an Aussie citizen) may have to pay to bring into Oz an Australian registered boat, if I then sell it to another Aussie? The boat is currently lying in Singapore and was registered to Southport QLD in 2005, but nobody seems to have any details on whether tax & GST has been paid?
Customs and AMSA were not able to provide any information.

[fwalschots]

Originally Posted by Marc1

Lots of interesting post.
Allow me to add my 2 cents.

It seems to be rather clear for all, that if you can produce a certificate of origin or rather a “Facts of Build”, a document that may only be issued by the manufacturer of a vessel, you can avoid the 5% if manufactured in the US. It does not have to be 100% built there by the way. So that takes care of the 5%.

I notice that most people focus on the 10% GST and how it is calculated and therefore how to avoid it.
GST (goods and service tax) is what the English call Value Added Tax, or a tax on profit. Every consumer good or service must pay 10% of its final cost all included. Customs must calculate on behalf of the Australian Tax Department the total cost of a vessel imported. Cost includes the purchase, and all other expenses. The cost of transport must reflect the commercial value of transporting a vessel from A to B. If you pull the boat by swimming in front of it pulling from a rope with your teeth at zero cost, customs will consider the commercial cost of transport and disregard your real cost. Sometimes they are happy to consider all your expenses including fuel, meals, marina charges and crew salaries for example if it adds to a reasonable sum. If transporting a vessel from Everglades to Sydney costs 48,000 and you say you spent $3000 in doing the trip with the wind in your sails, I am sure Customs will want to consider a higher cost in order to charge GST at a commercial viable rate or be accused by the ATO of bias.

As much as the above may anger you with good reason, it is not unique to Customs. If you decide to build an extension yourself on your own house and quote the council the cost of materials as your total cost, the council will add to that what they consider a reasonable cost for a builder to do it in order to apply the cost of the permits that are a percentage of the total cost.

Having said all of that, I think that the focus when importing a boat from the US is not GST but the overall cost charged by the shipping company and all the hidden costs that your fright forwarder can not quote with precision.

I also find frustrating the abysmal difference in price between our two countries, however when you add the real value of transport by a shipping company, anything between 40k and 70k things start leveling out.

So it seems that unless you want to take a big risk for little gain (or little loss), the only attraction for this exercise is if you do it yourself, that is, if you sail from the US to here island hopping, first stop Hawaii.

That brings us back to the GST and the flag topic.

In Australia you can legally register an ABN (Australian Business Number) if you reside legally here, and register for GST and so you are now ready for business.
You get invoiced for mowing the lawn on your investment property plus GST, you claim it back in the same quarter on your BAS (business activity statement) you fill in yourself in 5 minutes every 3 month. You invoice someone for giving them a foot massage, plus gst. You pass that money on to the taxman. Easy.
Now you buy a sailing boat in the US, sail it here. Customs will do their calculations on behalf of the taxman and tell you you must pay 20k for the boat+30k to bring it here= 50k ergo... GST 5k. No big deal. Write it down on your next BAS and the money is in the bank the next week. YOU GET IT BACK!

HOWEVER.

When you sell the boat remember you must include 10% in your final price and pass that back to Mr taxman. If you don't you are in serious trouble.
Now here is when it gets interesting.
Had you had your way and pay GST only on 20k + 3k = $2,300 GST This is what happens:
You now sell your boat for 70,000 you must pay the taxman 7,000 in GST. Total tax on profit you must write off is 7,000 - 2300 = $4,700 of real tax to you.
Yet the (bad) Customs said your real transport value was 30,000 so your cost was 50,000 and now that you sell for 70,000 your tax on your profit is only $2,000.
It is not that bad you must admit.

Finally the topic of the flag on the ship. All the comments about registering a boat in Australia (at a pittance cost) I think make a mountain out of a molehill. It is more a matter of logistics or hiring a good agent for the paperwork.
Yet it occurred to me that they may be an alternative. Not that I have tested it, just an idea.

What if you pay your supplier in the states with a letter of credit, a document that guarantees the vendor payment by a bank if he complies with the letter of the agreement. The agreement is that you charter his vessel to sail to Australia.
It is still his boat and under American flag. You are just renting it. When in Sydney, you decide to buy it since you like it so much and so you go to the bank from which you purchased the letter of credit from, and tell them that all is good and that they can release the funds and your vendor gets paid. Then and only then the boat is yours and you can transfer ownership to yourself with no risk nor funny business. Come to think of it, Customs will be unable to add any transport cost to your boat since the owner sold it to you in Australia. Not that it matters really after the reasoning above.

Kind Regards
Marc

Private sellers do not pay GST on the sale of a boat... same as u selling a car... only dealers and registered businesses have to pay GST.

GST on purchase or import is a different matter..

[fwalschots]

You can only register for GST if you are carrying on a business. To register for GST just to claim an Input Tax Credit on purchase you will be committing a fraud with the Australian Taxation Office. Heavy Penalties.

The GST you pay will just become part of your cost of aquisition like a car or other goods.

I repeat, you do not need to charge GST on the sale of any boat unless you're in the business of buying and selling boats.

[spawnywhippet]

Please find clarification from Australian Customs:

"Thank you for contacting Australian Customs and Border Protection Service.

If you purchased the boat outside of Australia, you will be subject to pay Customs duty and GST as the ownership has changed hands.

If the boat was purchased here in Australia and was sailed out by yourself and it is now being imported back into Australia by the exporter being yourself then you would not be subject to any Customs Duty or GST. Unless you have had any modifications made to the boat whilst being out of Australia.

Unfortunately we are prevented by law (Section 16 of the Public Service Administration Act; and Privacy Act) from supplying you with previous import information."

[Jamel]

Cost of transporting only applies to passage from last port before arrival in Australia, i.e. Noumea to Bundaberg....800 miles approx!

As advised by customs, Bundaberg, yesterday!

[Scribble]

Interested to hear more on your scenario Jamel.

Have they given you a transport cost for that distance?



Thanks for your time