With just a few weeks until the Singapore Yacht Show begins, Hill Dickinson’s Alex Teji has outlined a fiscal regime that looks favourably upon yachting activity, in stark contrast to neighbouring countries.
According to Teji’s note, ‘generally speaking, GST (VAT) of seven per cent is levied on the importation of goods into Singapore and which the importer is liable to pay. However, an exemption applies to the import of a private or recreational vessel where it is used for solely private pleasure purposes, enters Singaporean waters under its own engine or sail, and there is an intention to leave Singaporean waters in due course. There are no formalities for triggering this exemption, which is not dissimilar to ‘Temporary Admission’ within the EU, save that there is no apparent time limit specified for the vessel’s stay in Singapore.’
The same is not true of China however, where, according to Teji, import duties can rise to up to 10.5 per cent on top of a VAT rate of 17 per cent and a luxury tax of 10 per cent. This figure could be set to rise further still, so Teji suggests that importations are made in Hong Kong, which operates as a free port and attracts no duties.
Importation levies are similarly prohibitive in Indonesia, which requires a five per cent tax in addition to VAT at 10 per cent and a 30 per cent luxury tax.
Thailand is the country that has adopted the most progressive policies, behind Singapore. Similarly to its city-state neighbour, a privately-registered superyacht can operate free of additional duties in Thai waters. But this is currently limited to a six-month period and could also require the provision of a guarantee to customs authorities.
For Teji, “Whilst a number of the newly industrialised countries [such as Singapore] are starting to recognise the benefits of operating a VAT and duty free temporary importation scheme for pleasure yachts, others are yet to distinguish between pleasure yachts and commercial vessels.” His advice is for the newly emergent superyacht fraternities of these countries to exercise pragmatism before proceeding.
However, Singapore’s favourable view of private superyacht activity certainly bolsters its position as one of the region’s yachting hubs.
The Singapore Yacht Show will be staged at the ONEo15 Marina Club from 10-13 April. SuperyachtNews.com will be co-hosting a dedicated Breaking News Centre with video updates from the event.