Wednesday, 18th July 2012
Hassans welcome move on superyachts
Law Firm Hassans has welcomed the Government’s recent budget announcement that has abolished import duty for vessels over 18 metres in length and has reduced import duty for vessels under 18 metres from 12% to 6%.
A spokesperson for the firm said: “This is a welcomed move aimed at stimulating the growth of the super-yacht sector, by encouraging some of these vessels to use Gibraltar as their longer term berth in the Mediterranean.”
Using an analogy with hotels, they said: “The objective must surely be to increase occupancy. So too with super-yachts, but occupancy is replaced by berthing in Gibraltar, for a longer period of time. It will be appreciated that in the case of super-yachts the ancillary benefit for every nights’ stay is substantial. These yachts are large valuable vessels designed and built for lengthy voyages, many of these vessels regularly navigate through the Mediterranean passing Gibraltar but spending limited time here. They have large crews who require use of land based facilities, not forgetting the not insignificant requirements of restocking and refuelling. The amendment is aimed at encouraging the longer term berthing of some of these vessels here with all the ancillary benefits this will bring in terms of economic activity.”
Under the pre-budget legislation vessels are classed by gross tonnage. At present vessels with a gross tonnage of less than 80 gross tons are liable to pay import duty upon importation into Gibraltar at the rate of 12%, whilst vessels with a gross tonnage above 80 tons were not liability to pay import duty.
The move to class vessels from tonnage to metres is also a welcome decision as it is conceptually easier to explain and therefore market Gibraltar as a berthing destination. It also brings the classification in line with most European methods of vessel classification.
Hassans also advised: “It is however important to note that import duty on vessels is only triggered upon importation of the vessel into Gibraltar, this means that in practice any Gibraltar resident can own, use a vessel and not be liable to pay any import duty, as long as the vessel is kept away and never imported into Gibraltar. The very nature of our importation laws dissuaded resident vessels owners, including high net worth individuals, from importing and berthing their vessels in Gibraltar.”
Adding: “The fact that payment of duty has been reduced and exempted above 18 metres will mean that there is no longer the incentive for resident vessel owners to keep their vessels outside Gibraltar. This should in turn generate growth in ancillary marine services such as providing supplies; vessels spare parts, equipment, maintenance, upkeep and berthing. Attracting even a small percentage of the super-yacht sector navigating the Mediterranean would undoubtedly provide an economic stimulus in a sector that is relatively untapped.”
Tax partner at Hassans, Albert Mena, commented “This change should assist to market Gibraltar in a sector where there is potential for growth. This coupled with the other changes announced in import duty should encourage the further development of a competitive and thriving marine service and retail industry in Gibraltar, together with all the positive benefits associated with such an industry.”