Australian Tax Laws

Australia's Favourable Tax Laws when cruising or chartering

Charter

In 2000, Australia introduced a new taxation system. The effects of this for superyachts chartering in Australian waters were positive. In effect for a foreign flagged vessel to conduct charter operations in Australian waters providing the correct procedures relating to the Goods and Services Tax (GST) are adhered to then the GST should not impose any impediment to the operation of superyachts in Australia.

The vessel must be registered as a business for the GST prior to their arrival and follow the correct procedures to avoid paying GST on the vessel. To facilitate your taxation requirements or for more information contact the Superyacht Base Australia information centre prior to arrival.

Cruising

A Cruising Permit will be issued for visiting vessels that do not wish to undertake charter work. This permit will be for an initial period of up to 12 months. Extensions can be applied for and are generally granted. GST tax is payable on all purchases (eg. fuel and other consumables) if under a cruising permit. Superyacht Base Australia can assist with these requirements.

Refit, Repairs and Maintenance

The owners or masters of yachts cruising Australian waters on cruising permits will be able to obtain Goods and Services Tax (GST)-free repairs or refits by presenting their cruising permits to their repairers/refitters. The Australian Taxation Office will not require presentation of documents showing prior arrangement of repairs or refits.

GST-free repairs/refits include any repairs or refits to the yachts which are done during the course of their visits to Australia. Examples of these include:

  • repairs necessitated by accidents in Australia; and
  • routine maintenance

To be GST free the supply of goods must be provided by the supplier of the refit/repairs to the vessel.

The repairer/refitter can make a GST-free supply of the repair/refit by retaining a copy of the cruising permit. In addition to the cruising permit, the repairer/refitter will retain the financial records ordinarily required for taxation and accounting purposes.

Chartering in Australian Waters

National Marine Safety Committee (NMSC) has established a nationally consistent policy on commercially operated superyachts.

Superyachts when undertaking charters for clients are considered as commercial vessels under definitions used in state law and Part B of the National Standard for Commercial Vessels.

The new policy provides a nationally consistent approach to govern the commercial operation of foreign registered superyachts that do not carry more than 12 passengers on intrastate voyages.

Superyachts not undertaking commercial operations are considered recreational vessels and are not subject to this policy.

The policy does not apply to foreign registered superyachts conducting an international voyage, even under charter, passing through Australian waters.

Under the policy, foreign-registered superyachts may be granted a temporary recognition as a commercial vessel for a designated period where they carry:

  • Certification – the list of certificates specified in the UK MSA publication and the Large Commercial Yacht Code (LY2), issued by an IACS classification society or by the UK or US governments
  • Safety Equipment – a current valid certificate from an IACS classification Society or the UK or US Governments for lifesaving appliances for crew and 12 passengers in an unlimited operating area, or a certificate issued under the relevant state legislation by an Australian marine authority.
  • Crew – in accordance with UK or US requirements, NSCV qualifications or STCW95-compliant licence
  • Details and specifics of the comprehensive policy are on NMSC's website www.nmsc.gov.au