- CURRENT NEWS / Australia
- 8 February 2020
YACHT CAPTAINS, OWNERS AND MANAGEMENT COMPANIES need to understand their options and obligations when bringing luxury vessels into Australia.
A superyacht is defined as any high-value luxury sailing ship or motor vessel, which is all of the following: 24 metres or longer in length; not carrying cargo; used for sport or pleasure.
Operators intending to bring a superyacht to Australia (under its own power) must notify Australian Border Force of the impending arrival at least 96 hours before arrival in Australia.
Impending arrival reports may be made by emailing yachtreport@border.gov.au. The requirements may be found at abf.gov.au/entering-and-leaving-australia/entering-and-leaving-by-sea/let-us-know-youre-coming.
Superyachts on international voyages that enter Australia must arrive at a port of entry that is designated for the arrival of international superyachts unless permission is granted to arrive at another port in Australia. For ports of entry locations and more detail see abf.gov.au/entering-and-leaving-australia/entering-and-leaving-by-sea/ports-of-entry.
Clearance options for superyachts remaining in Australia
For owners of superyachts that remain in Australia (after breaking an international voyage), these options may apply:
- obtain a control permit* for up to 12 months (no security required)
- make a temporary importation for a maximum stay of 12 months – a security or undertaking may be required (or in limited cases an ATA Carnet)
- enter the superyacht for home consumption (and duty and Goods and Services Tax paid, if applicable).
Control permits are only available for pleasure craft that arrive under their own power for specified purposes.
Entry for home consumption
Superyachts that are imported, or intended to be imported, may arrive in Australia as cargo on board a ship or aircraft, or arrive under their own power.
Superyachts that are imported, or intended to be imported, must be entered into home consumption or entered into a licensed warehouse. Generally, entries must be finalised by no later than close of business the working day after the superyacht arrived.
Determining entry requirements
The importation of a yacht or the intention to import a yacht depends upon an objective assessment of all the facts and circumstances for each case to determine if there is/was the requisite intention to import a superyacht.
Duty and GST
Imported superyachts are subject to assessment for duty and a 10 percent GST on the value of the taxable importation, which comprises of the Customs value, any duty payable plus transport and insurance costs. Superyachts greater than 150 Gross Construction Tonnes (GCT) have a free rate of duty. Other duty concessions may be available under Free Trade Agreements.
For information on importing a yacht visit abf.gov.au/importing-exporting-and-manufacturing/importing/how-to-import/types-of-imports/importing-a-yacht.
Yachts operating commercially in Australia
If an operator intends for a superyacht to work in Australia (engage in the domestic economy), the operator has intent to import a superyacht.
Working in Australia includes:
- commercial touring
- chartering
- leasing
- hiring
- carrying fare-paying passengers
- operating for a reward of any kind.
Superyachts engaged, or intended to be engaged, in the domestic economy must be entered for home consumption or hold a Temporary Coastal Trading Licence.
Operators of imported yachts that hold an Australian Business Number (ABN) and are registered with the Australian Taxation Office (ATO) for GST may be eligible for input tax credits for any creditable importation made for the purposes of operating their business. ABN holders who are registered for GST may also qualify to participate in the ATO’s GST deferral scheme.
For more information, visit the ATO website: ato.gov.au/Business/.
Sale
Superyachts intended to be sold or offered for sale in Australia must be entered for home consumption or entered into a section 79 warehouse, pending sale.
Repair and refit
A superyacht cannot maintain its continuing international voyage status while it is in a dry-dock facility. If the nature of repairs or other work is sufficient to prevent a superyacht from maintaining its continuous voyage status the yacht should be either exported or entered for home consumption for repair and export.
A security may be required for any duty liability but the importation is non-taxable (GST free). On completion of repair work, and necessary testing, the superyacht must be exported.
Where a superyacht is not exported after repairs are completed the security may be forfeited.
Goods imported to repair yachts that exceed 150GCT have a free rate of duty under Item 42 of Schedule 4 to the Customs Tariff Act 1995. These goods are subject to GST at importation if the yacht was imported.
Entry for warehousing
Current licensed warehouse facilities in Australia only allow for yachts to be lifted and placed on a hard stand or trailer. A yacht may be entered into a licensed warehouse without duty and GST being paid. Yachts in a warehouse may be sold (conditions apply) or offered for sale. Yachts may be entered for home consumption or for export from a warehouse.
Temporary importation of yachts
A tourist or temporary resident (must be a person and cannot be a corporation, company, trust or other organisation) may import a superyacht they have owned for a period of 12 months, subject to conditions. An entry is required and a security or undertaking may be required subject to a risk assessment (a threshold amount applies).
Superyachts intended for public exhibition or entertainment, for example boat shows or to be tested, may also be imported on a temporary basis (conditions apply).
Superyachts participating in a nationally or internationally recognised race/event may be eligible to be temporarily imported under an ATA Carnet as professional equipment. Australia does not accept ATA Carnets for means of transport.
Imported replacement parts for repair of a temporarily imported yacht may also be imported on a temporary basis.
Yachts imported on a temporary basis cannot be sold, offered for sale, leased, hired, chartered, loaned or engage in the domestic economy without permission. Permission may be subject to the payment of duty and GST.
Control permits
Tourists and eligible foreign corporations/entities may be granted a Control Permit to sail in Australia if the primary purpose of the visit is for touring purposes. A Control Permit is issued for up to 12 months and subject to strict conditions.
Control Permits are not available to commercial operators of yachts or other ships that are intended to operate in Australia for reward, or to be sold or offered for sale.
Imported replacement parts for repair of a yacht operating on a Control Permit must be entered for home consumption duty and GST paid before delivery to the yacht.
Quarantine examination and clearance
The Department of Agriculture Forests and Fisheries (DAFF) Biosecurity considers superyachts high-risk vessels due to exotic locations visited and the volume of timber used in the construction of superyachts. DAFF inspections will be conducted at the first port of arrival in Australia.
More information can be found online at daff.gov.au/aqis/avm/vessels/yachts/super_yachts.
Visas
Temporary Activity Visa (subclass 408) is appropriate for superyacht crew and valid for two years from the date of issue. Crew issued with this visa must:
- have the skills to undertake the activity to be carried out in Australia
- be supported or sponsored
- meet additional requirements.
The validity of a superyacht crew visa is independent of the entry of a superyacht for home consumption.
For information on visa or immigration or other Customs and Border Protection matters, see homeaffairs.gov.au.
Australian taxation issues for foreign-flagged vessels chartering in Australian waters
The Commonwealth of Australia’s taxation system is operated by the Australian Taxation Office (ATO).
In general, there are two types of taxes levied in Australia:
- Goods and Services Tax (GST)
- Income Tax.
Australia has a self-assessment system. In broad terms, the Commissioner accepts the income tax returns as lodged. A detailed examination is conducted only during the course of an audit of the taxpayer’s affairs.
Implication for superyachts
The taxation obligations differ depending on whether the superyacht is a foreign-flagged vessel in Australian waters for either of the following:
- charter work; or
- private cruising.
Charter
Goods and Services Tax (GST)
To meet the taxation obligations of chartering in Australian waters, there are a number of procedures that must first be followed. (It is advisable to have the following procedures instigated at least 60 days prior to entry into Australia.)
- Application for an Australian Business Number with the ATO (requiring certain documentation for identification and registration).
- Application for the Import Deferral System via the ATO.
All income from charters will be subject to 10 percent GST charge whilst operating in Australian waters. Any GST paid on consumables and repairs can be fully offset against the GST collected.
Income tax
If operating the charter through a company, income tax of 30 percent of the net charter income deducting may be applied. The net charter income is calculated after allowable deductions.
For individuals or partnerships, income tax will be charged at non-resident progressive rates on the net charter income. This is subject to the operation and application of double tax agreements.
Crew tax obligations
Each charter vessel will be different with regard to the crew payments and specific advice should be sought with regard to the Australian taxation implications.
Private cruising
A private yacht will have no obligations to the ATO, but will pay the GST (a consumption tax) on all goods and services purchased while in Australia. (The applicable GST is paid at purchase). Special rules apply to fuel on exit and other consumables. One exception to this is where Repairs and Refits are performed while in Australia.
The repairer/refitter can make a GST free supply of the repair or refit where they retain a copy of the cruising permit, and copies of the documentation associated with the repair/refit ordinarily required for accounting and taxation purposes.
Note:
This information is current as at the time of writing (July 2018). This fact sheet is a guide only. In all instances, compliance with Customs law is required to export, import, obtain clearances and take delivery of yachts.
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