Nowadays, the majority of yachts are registered (i.e. flagged) offshore, with the Cayman Islands, Marshall Islands and St. Vincent remaining the most popular registries, as the flag you choose for your superyacht will have a direct impact on your taxes. In most cases, flagging your vessel offshore enables to avoid taxes on the hull value. The savings can be significant, compared to the sales tax value (TVA or VAT) that would have to be paid.
When it comes to U.S. tax regulation, not only the potential buyer but also the seller have to pay certain taxes in order to settle a potential deal. In order to avoid it, as well as strict manning requirements, many yachts are originally listed for sale with a mark ‘not for sale to U.S. residents in U.S. waters’.
The general policy derives from a 111-year-old law, preventing sales of foreign-flagged yachts to U.S. citizens when the boats are in U.S. waters. The law requires foreign-flagged vessels to pay an import fee even before they are offered for sale to U.S. residents while in U.S. waters.
Over the past years, the International Yacht Brokers Association (IYBA) urged the Congress to change the form of the 1908 law. The bills that have been filed would not remove the tax paid on the boat, but would defer payment of it until after the boat is sold.
This situation also often pertains to a yacht registered in another country that is within US waters on a cruising permit.
IYBA executive director Cindy Sailor, has recently reintroduced the bill to the new Congress in an effort to boost the yachting industry and encourage more sales in U.S. waters. He explained:
We’re not asking to get any sort of forgiveness for paying the duty. We are requesting that the time of collection of the duty be changed to when the yacht is sold, rather than when it goes on the market.
It’s counterintuitive to pay the import tax on the value of a boat before you know what the actual selling price is going to be. A 1.5 percent tax is sizable and most yacht owners don’t want to pay duty just to put the boat on the market with the hopes of selling it to a U.S. buyer.
Matt Ruane, director of JTC Marine and Aviation, cites some specific reasons the U.S. flag may not appeal to owners of large yachts.
U.S.-resident master and crew are required for all large yachts, unless operating privately and outside of U.S. waters. A U.S. flag requires US corporate or private ownership, and the concept of nominee directors and shareholders is less understood and thus, less acceptable, essentially meaning that U.S. corporate ownership is more transparent.
Still, according to HMY Yachts, the sweeping tax reform, the Tax Cuts and Jobs Act of 2017, has included some new provisions that can provide benefits on yacht purchases and also yachts for charter that are used for legitimate business purposes. The new bill codes around bonus depreciation and will come in effect through 2022.
With this, up to 100% of the purchase price can potentially be written off as bonus depreciation in the year of the purchase if all requirements are met. And there is no dollar limit to the purchase price. That same depreciation applies to any improvements made to the vessel in the same year as the purchase.
To qualify for these benefits, the buyer must be an entity—corporation, partnership, or LLC—that will use the vessel for a legitimate business purpose, for instance, by purchasing a yacht and using it for charter.
The 30th edition of the Monaco Yacht Show (MYS) will take place from Wednesday 23 to Saturday 26 September 2020 at Port Hercule in Monaco.The organisers are fully aware of the strategic importance of the MYS to the companies that participate each year – for growing their business, sales and marketing.The Monaco Yacht Show 2020 will probably be one of the first opportunities this year to bring together the yachting industry and meet private customers to discuss current and future market trends and share a true superyachting experience that only a visit to a salon can offer.The MYS offers the perfect setting for establishing direct relations based on trust. Future buyers can visit several yachts all in one day, compare them, meet the designers, and discuss with brokers and shipyards. Such a totally immersive experience is as essential as it can be decisive when considering the purchase or construction of a superyacht.MYS is keeping a close eye on how the pandemic is evolving, hoping there will be a healthier and more stable situation around the globe in the coming months.Also, the MYS, we will implement directives issued by the government of Monaco and the World Health Organisation (WHO) that reflect how the pandemic has evolved by September 2020.
May 25, 2020
Ulstein Verft delivered 88.5-metre Espen Øino-designed explorer yacht Olivia O after reconstruction. Planning and engineering work began on the boat in November 2016. The project’s hull and superstructure were constructed in Croatia by the Brodosplit.Though Oliva O is Ulstein’s first private superyacht project, well-known superyacht designer Espen Oeino brings valuable experience.Designed and built by Ulstein Verft - a yard better known for commercial vessels, ferries and workboats, Olivia O is characterised by a striking reverse bow and explorer profile.Olivia O can sleep up to 20 in eight cabins, including Pullman bunks while crew accommodation is for 30 people.
May 25, 2020
On 8 May 2020 Ulstein has delivered the first two platform supply vessels of the Ulstein px121 design built at SWS, China, the 'Guo Hai Min Xing' and the 'Guo Hai Min Sheng'. They are operating for COSL – China Oilfield Services Limited, for whom they have a long-term charter.Two more vessels of the same design at SWS (Shanghai Waigaoqiao Shipbuilding Co., Ltd.), have completed their sea trial and will also be delivered to COSL shortly, according to schedule. Owner of all four vessels is Sinoocean.Guo Hai Min Xing (originally Crest Andromeda 2), a Ulstein px121 design. A FireFighting Offshore Support Vessel.Guo Hai Min Sheng (originally Crest Andromeda 1), Ulstein px121 designed offshore supply ship. Meets clients’ operational expectations in terms of deck space, capacities, speed, position holding capabilities and fuel efficiency.The Ulstein px121 is a flexible platform supply vessel design featuring the X-BOW hull line design for smoother motions in head seas. A platform supply vessel of this design has a competitive combination of fuel-efficiency and cargo capacities/deadweight. This translates to a performance level that is usually expected from larger PSVs, but at a medium-sized PSV cost - delivering excellent value-for-money for the owner and operator.
May 22, 2020
Echo Yachts reveals 50m Project Echo catamaran design. This is the latest design collaboration between Bannenberg & Rowell Design in London, their Australian custom superyacht build team at Echo Yachts in Perth and Incat Crowther in Sydney.The aluminium catamaran is described as “similar” in design to the FRP composite catamaran Charley, delivered by the yard in 2017.New Yacht Support Vessel can accommodate up to 20 guests and 17 crew, also it has entertainment areas and a selection of tenders and toys including specialist scuba diving facilities and dive store, onboard hyperbaric chamber and a helicopter pad.According to company's sales and marketing manager, Chris Blackwell, “Added to the excitement of this new vessel we are really pleased it fits in nicely with Echo’s ongoing commitment to creating world-class ‘eco-efficient’ vessels here in Western Australia. No matter where in the world our clients may be, they are able to easily see and engage in the design and build of their new vessel using the same online video meetings, CCTV video feeds, plus photo and video reports we have been providing our clients with since 2015."
May 22, 2020
Ferretti Yachts 500 is the result of the collaboration between the Product Strategy Committee headed by Ing. Piero Ferrari, the Ferretti Group Engineering Department, architect Filippo Salvetti for the exteriors and design studio Ideaeitalia for the new interior design concept.The exteriors have the aerodynamic design and the sleek, streamlined shapes. The stern features a soft and sporty design, with new solutions and generous spaces, while the profile of the hull proposes an enhancement of the windows, characterised by wide, modern shapes.According to Filippo Salvetti, the exterior design architect, “The design of the new Ferretti Yachts 500 highlights an overall dynamism thanks to new and innovative stylistic features of the superstructure. A natural heir to the Ferretti Yachts 720, it reinterprets the new styles of the range in a very personal way. It proposes a layout based on a design centred on people and their life on board, a typical approach of the Ferretti DNA. The two different moods of decor by Ideaeitalia studio perfectly reflect the Just Like Home philosophy and are able to satisfy the tastes of every customer”.Ferretti Yachts 500 reveals two types of the interior: Classic, with its warm tones and Contemporary, inspired by Mediterranean colours.The Classic mood is dominated by dark oak, combined with glossy and matte lacquers in shades of black and white. The main deck features a spacious lounge area, with two large sofas and a coffee table that can be transformed into a dining table.Key features of the yacht is the stern swimming platform. When the platform is submerged, steps are revealed for totally safe access to the sea, and the convenience of the latest-generation optional lift system makes it suitable for the whole family. Ferretti Yachts 500 installs twin Cummins QSB 6.7 engines delivering 550 mhp, for a top speed of 30 knots and a cruising speed of 25 knots (preliminary data). The new yacht will also be equipped with optional gyroscopic stabilisation to guarantee the maximum stability at anchor and during navigation.
May 22, 2020