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 Dutch company Van der Valk has developed a new line of crossovers Pilot.The new Pilot line will be available in a range of lengths, starting with a 23-meter model. The interior design was created by Cor D Rover. The design has a wheelhouse, freeing the front main deck. aft deck allows you to sunbathe and store tenders, jet skis and other toys.Owners can make a number of adaptations to the 23-meter model, including adding a gym at the stern and changing the size of tenders and toys on board. The cabin can also be extended aft to expand the space for communication.Floor-to-ceiling windows for distant ocean views will be installed inside the yacht in the living room, while the main deck also includes a galley and a full set of the main beam forward.The rest of the guest house is located on the lower deck, consisting of two double cabins with bathrooms and a VIP. At the same time, the crew room includes two double cabins and a separate crew area with a bathroom and a cabin, which is served by its own staircase.
February 21, 2020
After a growth period of 20-30 meters and megayachts, which is even closer to the recession, there was a short period for high demand for medium-sized superyachts.The market for 40-60 meter yachts, the last of which began to grow before the recession began, has also recently begun to gain momentum, as owners are looking for yachts in order to switch to them with growing disposable incomes. Indeed, if several years earlier it was expected that yachts in this range would be traded at 30-40% at the asking price, this gap narrowed to 25-30% in recent quarters.Shipyards, primarily known for their 20-30-meter yachts, are also expanding their ranges to 40-60 meters in order to keep customers who want to grow in size. For example, Sanlorenzo, which for decades focused on 20-30-meter yachts, put at the beginning of this year its newest flagship - the 64-meter Attila.Atilla is a 64.25m luxury yacht, built by Sanlorenzo and delivered in 2019. Her top speed is 18.0kn and her power comes from two 2375.0hp Caterpillar 3516-C diesel engines. She can accommodate up to 12 people with 18 crew members.Yacht was designed by Officina Italiana Design, and the interior design was created by Francesco Paszkowski.
February 21, 2020
A steel hull and an aluminum superstructure were attached to the integrated 55-meter Feadship superyacht, known as Project 704.The full displacement yacht was developed by RWD in conjunction with the Feadship De Voogt Naval Architects and the interior of the 499GT was written by FM - Architettura d'interni.The delivery of the yacht is expected in 2022.
February 21, 2020
The sixth superyacht Otam 80HT Attitude is nearing completion at an Italian shipyard.The 25.5-meter Attitude is the sixth building in the series and remains on track for delivery this April.The yacht designed by Umberto Tagliavini is 80% ready. Interior equipment is currently on schedule for a technical launch next month.Attitude offers a number of modifications to the original GA model, including the individual design of the front deck, which has a large solarium and a height-adjustable table to maximize the use of outdoor space.The cabin was also enlarged to accommodate a horseshoe-shaped sofa that can accommodate 10 guests. Another tanning bed is located on the transom, and modified protective gates lead down to the swimming platform.The tender bay garage under the aft sun deck has also been expanded to accommodate a 3.95 meter long Williams sports tender, capable of carrying six passengers.Attitude will feature four cabins with a common main cabin, the best VIP room, a guest cabin with two single beds and a fourth cabin for the owner's chef.Two 2600 hp engines MTUs combined with Arneson drives allow Attitude to reach a maximum speed of 47 knots and a cruising speed of 40 knots.
February 21, 2020
The Magnum 60 Furia was launched in 2001, designed by Magnum Marine and Ceo Catherine Theodoli. They say that this is the most successful of the Magnum models.Back in 2001, the 120-kilometer 60 Furia Magnum was named the fastest yacht of this size in the world and after extensive repairs at the Perini Navi Hammer shipyard reached higher speeds.Changes include new air intakes in the engine compartment along with a customizable display on the control panel.The new Magnum 60 concept is attractive to the original design, but much more pleasing to the eye, with distinctive details throughout the American style of the 50s. The owner’s room has individual storage solutions on either side of the room to ensure clean space.Marnix Hoekstra from Vripak says that they kept the overall layout and tuning of the boat, but improved it where it was possible, for example, expanding the companion from the saloon in the middle to the double and twin cabins. They also added daylight, and in the interior they used the same tree that was used in the construction of the boat, painting it in matt white.
February 20, 2020