It’s possible that an Australian federal government tax break for superyachts is on the horizon — one that could provide a $1.4 billion boost to the Australian industry. This would come to pass if there were a change in Goods and Services Tax (GST) fees. Lifting this massive tax would benefit countless businesses and individuals in every industry.
Superyacht Australia promotes its country as a cruising destination for the worldwide superyacht fleet. According to their economic impact statement, the $1.9 billion industry could possibly increase to an annual $3.3 billion within a few years. “Currently, all foreign-owned superyachts visit Australia under a control permit,” says David Good, Superyacht Australia charter working group member. Essentially, it’s a simple, year-long permit that works well for private vessels. “However, it does not allow a vessel to charter,” he explains. To be available for charter, vessels need to be imported into Australia, where they then pay a 10 percent GST on the vessel’s value. He says there are provisions to defer this payment — on departure, they can export the vessel, canceling out the fee. “But this is a very complicated procedure and most owners would not be comfortable importing their vessel into a foreign country whilst deferring payment of many millions of dollars for a short period of six to twelve months,” Good says.
Unfortunately, the GST fees impede the Australian economy, particularly in the yachting industry. “The inability for foreign superyachts to charter in Australia deters half the world’s fleet (those that are charter vessels) from spending any length of time in Australia,” Good explains. “Charter vessels spend the majority of their time in Tahiti, Fiji, or New Zealand where charter rules are simple. It’s the single biggest inhibitor to growth in the Australian industry.”
This change has been a long time coming, according to Good, who says upcoming events could be game changers. “This need has been the number one issue for the industry for decades. However, with the upcoming America’s Cup in Auckland in 2021 and the Tokyo Olympics in 2020, the need to have a simple, easy permit to allow foreign superyachts to charter in Australia is immediate,” he says. “We can’t afford to wait any longer, as large numbers of superyachts are expected in the Pacific over the next few years. Australia needs to be open to foreign superyacht charter.”
Good says the next step is to wait for this to be voted on in the senate, which should occur during the next few sessions of parliament.
For more information, visit www.superyacht-australia.com.