Trouble in Paradise

The entire US import duty is only 1.5% of the value of the boat, which is very reasonable compared to VAT in Europe. US Customs accepts as a value approximately 75% of the asking price, based on what an owner might receive when the boat actually sells.

A "Boat Show Bond" is simply a bond to insure the payment of the duty. This bond is effective for enought time for the yacht to be on display at the Fort Lauderdale, Miami, and Palm Beach Boat Shows. If the yacht does not sell then 90% of the bond fee can be refunded, the bond issuer gets to 10%, not US Customs.

A yacht owner could also choose to pay the entire duty to allow the sale in the US to a US resident, and then if the yacht is sold to a non resident or foreign flagged again, the seller could ask for a refund of the custom duty.

My disclaimer, I am not a customs broker, CPA, or Maritime attorny, just a Certified Professional Yacht Broker who deals with this.

Thanks very much for your clear and precise clarification yachtbrokerguy.

But most yachts falling in the "superyacht" category are hardly ever "VAT-paid" (ie. the yacht-owner having paid Value Added Taxes of anywhere between 15 and 23% or thereabouts in any EU country)...

I'm just beginning to understand how Uncle Sam's been "kickin' all the asses of you US yachtbroker dumbasses" (Red Forman - "That '70s Show) all this time. US nationals are probably the single largest group of superyacht owners (at least beneficially) than any other nationality. Yet, Uncle Sam insists on imposing this 1.5% import duty (or equivalent bond) on foreign-flagged superyachts attending US boatshows and intended for US buyers...?! Talk about biting the hand that feeds you...?!

The Monaco Yacht Show 2010 commences tomorrow. There will be a fair number of "superyachts for sale" also anchored out off Monaco. Where their managers and brokers will avoid paying the sometimes exorbitant sums involved in actually berthing the yacht inside the port for the show. Their wares being available for immediate inspection after a 5 minute tender ride. But imagine if they'd all had to fork up 1.5% of say €50m (€750,000) upfront, even if 90% of that can eventually be reclaimed, that's still an additional €75,000...

No wonder that you hardly ever see any regular press releases from US yacht brokers announcing "their latest sale of some 65m superyacht" (to an American client). Will US yacht brokers always suffer, "one arm tied behind their backs" from the US government's insistent inabilities to understand that their citizens are (beneficially at least), the number #1 owners of superyachts in the world? Or has the IRS been instructed not to investigate "beneficial ownerships", in case such investigations might completely disrupt the financing of electoral campaigns state-side...?!

****! I promised myself not to be contraversial anymore. "Red, put your foot in my ass toute de suite...!"

I think what is most amusing is when yacht owners use the excuse that they bring huge amounts of money to the local ecconomy and then try to keep from giving it to the government or, in Airship's example, even the local marinas as well. Evidently taxes aren't the problem. They just don't want to spend money on anything that doesn't directly benefit themselves. If they can't eat it, wear it, drive it, put it on their wall or profit from it they object to paying for it. Somebody has to pay for the subsidized housing (section 8) where those minimum wage employees who serve them live and the subsidized bus systems they ride to those jobs and the medical care that they can't afford to pay for and the roads on which the trinkets they've bought travel to get to their yacht. Also, don't forget that most taxes eventually get circled around landing in the pockets of corporate executives in the form of business tax breaks so those executives can take the bonuses that allow them buy things like yachts.