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.
He adds:
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.
Past weekend, recently unveiled Fedship in-build, the 49.5-metre Project 706, took a move from the structural build facility to Feadship outfitting yard in Aalsmeer, manoeuvring her way through the Dutch canals. The details on the project are kept in strict secrecy. The key point known about Project 706 is that the all-aluminium superyacht is conceived to become one of the fastest Feadships on the water, thanks to a series of high-performance water jets she will come equipped with. It has been also said, the vessel’s completion is scheduled to 2020. Meanwhile, another brand new Feadship, 77-metre Syzygy 818 is now undergoing sea trials at the North Sea. Still, the 77-metre is not the one to make it to the list of the Dutch yard's largest vessels of over 90 metres.
July 16, 2019
In order to join the mission of ‘driving sustainability in superyachting’, some of the biggest players of the industry have come together supporting a non-profit organization, Water Revolution Foundation. So far, the brands signed behind the idea are Abeking&Rasmussen, Alexseal, Amels | Damen, Benetti, Feadship, Heesen, Lürssen, MB92 and Rybovich.Pledging substantial multi-year commitment and financial contributions in the organisation, the brands have contributed to recognition of the urgency to reduce the industry’s ecological footprint.The International Maritime Organization has set goal on reducing greenhouse gas emissions by 50% by 2050 from 2008’s levels in the industry, along with keeping on increasing marine protected areas.Robert van Tol, executive director of Water Revolution Foundation, commented:Sustainability is something we can no longer view as optional. But, more importantly, our industry is well positioned to take the lead with a smart and affluent clientele and our unique connection with the ocean.Van Tol highlighted that the foundation is open to all industry companies. Moreover, they consider sustainability not a competitive advantage but a responsibility and a minimum standard that needs to be improved continuously and collectively.I’d like to thank our first anchor partners for sharing this vision, making it possible to start this ambitious programme and call on other companies to join this revolution too.Water Revolution Foundation’s activities will revolve around three areas of focus: promoting new technology and empowering innovation; pro-actively creating the industry’s own sustainability agenda, going beyond legislative requirements; and reinvesting in ocean conservation.Water Revolution’s first joint industry project will be to determine a yacht’s operational profile and how to compare yachts with one another. A database for verified sustainable solutions will also be developed, facilitating designers, builders and refitters with the knowledge needed to accelerate the shift towards sustainability.This initiative is not the first one demonstrating awareness and concern with eco future of yachting among the industry players. For instance, the sixth edition of the Solar & Energy Boat Challenge has been recently held in Monaco, premiering the first zero emission committee boat. Meanwhile, one of the most environmentally-oriented vessels ever built, the 43-metre power trimaran Adastra has lately entered the market.
July 15, 2019
The 43-metre yacht Adastra, one of the world's most amazing superyachts thanks to her futuristic design, has been listed for sale. According to media sources, such as CNN Travel, the world’s first luxury power trimaran of its size is owned by Hong-Kong-based billionaire and shipping tycoon Anto Marden.This futuristic projectile was built by Australian McConaghyyard in Hong-Kong in 2012—at a reported cost exceeding $20 million, to cruise Indonesia and Southeast Asia. In the seven years since the launch, she has crossed the Atlantic several times, taking Marden and his wife around the globe. Her reported estimated price now might amount to $ 12,000,000, states Robb Report.Designed by British studio Shuttleworth Design, Adastra was created with environmental impact in mind. Her aerodynamic wings help her float on the water, thus her drag is significantly reduced through only 20% of the vessel submerged in water. In light of this, the lightweight glass and carbon boat consumes only about 14% of the fuel used by more traditional yachts with the same specs. Before fuel and water, Adastra tips the scales at just 52 tonnes.According to comments shared by Marden with Robb Report, the yacht has a range of 10,000 nautical miles, as cruising at 10 knots, she burns only 4.5 gallons per hour. Meanwhile, Adastra has a top speed of 23 knots. The owner reported to recently sail from St. Maarten to Vigo in Spain, having enough fuel left to head back to the Caribbean.Hong Kong–based interior designers Jepsen Design developed the interiors for nine guests and six crew, offering five bedrooms, four bathrooms, and an open-air bar. One of her most innovative features is an option for remote control by an iPad from up to 164 feet away. Collecting several design awards, the yacht as also awarded Most Innovative Design at the World Superyacht Awards in 2013.According to Robb Report, the reason the owners have put the vessel on sale is that she is not getting enough use, as they cruised to all the places they wanted to cruise.Generally, the innovative vessel has been attracting the attention of press and yachting enthusiasts ever since her launch, spotted here and there, for instance in Gibraltar or in Fijian waters.
July 15, 2019
After the recent completion of the first stage in the Benetti Giga Season with three giga yachts launched within 100 days, the Italian yard has performed another triple delivery at Viareggio, with the fifth Mediterraneo 116 unit christened ‘Big Five’, the seventh Delfino 95 unit BD107 named ‘Aslan’ and the eleventh Classic Supreme 132 unit, BS011, all of the Class category.M/Y Big FiveBig Five, the fifth Mediterraneo 116 unit, is a 35.5-metre displacement yacht with a fibreglass hull and a carbon fibre superstructure. She features exteriors by Giorgio M. Cassetta. The interiors, meanwhile, boast light-coloured matt-finish wood accompanied by grey-shaded varieties and dark ashwood, also with the use of Olimpico Striato and Zebrino Apuano marbles, among other types.The yacht’s layout, designed to accommodate 12 passengers and seven crew, comprises a full-beam cabin forward on the Main Deck with panoramic windows and 2 VIP doubles, 1 cabin with 2 single beds and 1 cabin with a single and a sliding bed on the lower deck.The main deck of Big Five features the main living area, the dining area with an oval table seating 10, and the galley with a wine storage. In addition to the bridge and the captain’s cabin, the Upper Deck contains a skylounge opening out onto the stern area, with a teak table seating 12 and a sofa. In the bow area, there are a hydromassage pool and a sun lounging area for some uninterrupted rest and relaxation.A second sunbathing space in the stern area on the Sun Deck offers the owner and their guests privacy, as well as doubling up as an area for socialising with the help of a big barbecue and a bar space.Delfino 95 'Aslan’In its turn, BD107 ‘Aslan’ is a project overseen by Edmiston & Company. The seventh Delfino 95, she is the first one in the series to feature a blue hull right from the outset. The alternating white, blue and red colours and the use of materials like teak create a link between the yacht’s highly customised style and the world of sailing yachts, which is where the owner’s background comes from.The interiors are the work of the Benetti in-hose Interior Department, under the guidance of the owner. All the spaces bear references to maritime tradition throughout the form of teak used in alternation with light-coloured carpeting and Taj Mahal marble.The main deck hosts an elegant living area with open bookcases at the owner’s insistence. The dominant colours here are blue and white and the floor is split between carpet and teak with Wengè inserts. Aslan is also refined with sophisticated detailing, such as the decorative lamps in the living area and a rectangular table seating eight. Built in its entirety by a Tuscan artisan, the interior is clad in a fine mosaic that follows the contours of the boat.On the main deck, there also lays owner’s fully carpeted cabin. The lower deck hosts the guest cabins and crew area. In the 2 VIPs, one fitted with an open bookcase, and in the 2 Twin cabins, the light-coloured carpet is combined with teak and leather inserts that alternate between blue and cream colourways.One particularly striking feature of the bow area on the upper deck is a full-custom Jacuzzi. In the stern area, the light teak dining table seats 10.Classic Supreme 132As to BS011, this Classic Supreme yacht features spacious exteriors designed by Stefano Righini and interiors by Mexican architect Ezequiel Farca and the Benetti Style Department. With its streamlined profile, the boat has full-height windows that flood the interiors with natural light on both main and upper decks.The interior layout provides 5 cabins for 10 guests. The owner’s cabin on the Main Deck, entered through a big hallway and a relaxation area, features big communicating his and hers bathrooms.On the Lower Deck are the 4 guests’ cabins, 2 with double beds and 2 with singles, each of which has its own private bathroom. On this deck, in the bow section and separated from the guest area, is accommodation for a seven-member crew with four cabins, a kitchen and a dinette.In the engine room, a pair of MTU 12V engines provide the yacht with a top speed of 14.5 knots and a range of 3,200 nautical miles at cruising speed of 11 knots.All of the three yachts are available for use right away.
July 15, 2019
Part of the course on making Hainan Province into the centre of the Chinese yachting industry, local officials will open waters for temporary entry and exit by foreign yachts starting from July 16.Starting from next week, nearly eight coastal areas of Hainan Province, including Boao and Nanshan, will be open for foreign-flagged yachts visit. Hainan will become the first administrative unit of China to adopt the legislation, albeit for a relatively short period of time. The policy will stay in action through January 15, 2020.The provincial Cabinet has made the decision with the approval and even under some pressure from the central authorities of China. The latter see these islands established as the epicentre of the country's yachting life by 2035.The next steps, aimed at achieving the goal, should be liberalisation of offshore duty-free trade and the promotion of cross-border cruise tourism.Still, experts note that the yacht market in China has been very specific and closed in the recent years. In many ways, the reason for that is the policy of the Communist government of Xi Jinping, condemning the public demonstration of wealth, also through a 44% import duty and 36.5% domestic sales tax. Owning a superyacht in China is extremely difficult and unprofitable, that is why Chinese reach mainly avoid owning private yachts.
July 12, 2019