Change in Customs Approval Process for Sale of Temporarily Imported Small Craft (NZCS 275)
Foreign owned and flagged vessels including yachts, superyachts and other recreational vessels entering New Zealand, may be granted Customs clearance under a Temporary Import Entry (TIE). A TIE allows the vessel to stay in New Zealand without payment of duty and GST, provided certain conditions are met.
One of the key conditions of a TIE is that the vessel is not sold or offered for sale in New Zealand without the prior approval of New Zealand Customs.
To reinforce this requirement, New Zealand Customs have introduced a new form: Request for Permission to sell a Small Craft on a temporary import entry (NZCS 275). This form requires owners of small craft to apply for Customs approval before seeking to market or sell the vessel while it remains in New Zealand under a TIE. This change formalises the existing requirements for customs approval to be obtained before any marketing or sale activities are undertaken.
Owners of small craft are therefore required to submit this form when seeking permission to sell a vessel while it remains subject to a TIE. Each application is considered on a case-by-case basis, and they must obtain approval before any marketing activity is undertaken.
What is important to outline here is that small crafts that are under TIE cannot be sold or offered for sale to New Zealand buyers on the domestic market. Any marketing material must therefore, clearly state that the vessel is only available to non-New Zealand residents. If a vessel is already marketed for sale without the necessary approval, Customs should be notified immediately.
The form also highlights that if the vessel is to be offered for sale to New Zealand-based purchasers, then the TIE will generally come to an end. The vessel will then need to be permanently imported, potentially triggering liability for GST, duty and any other applicable charges.
Vessel owners and brokers should take particular care to ensure that all marketing and sale activities comply with the conditions of the TIE. The importer remains responsible for any duty and GST liabilities while the vessel is in New Zealand, regardless of whether ownership changes. Any breach of the TIE conditions may result in those liabilities becoming immediately payable.
The introduction of new form NZCS 275 provides a clearer and more structured process for obtaining Customs approval. However, it also reinforces the need for owners and brokers to engage with Customs early when considering a sale of a vessel that remains temporarily imported into New Zealand. The implementation of NZCS 275 ahead of a larger transition to updated temporary import processes, suggests that customs primary focus is on tightening the controls over sale activities of temporarily imported vessels.
If you are considering bringing your craft to New Zealand, and marketing your vessel for sale while under a Temporary Import Entry, or require assistance filing an appeal against a Customs decision, please contact Peter Dawson at peter@maritimelaw.co.nz (+64 27 229 9624) or Troy Stade at troy@maritimelaw.co.nz (+64 27 368 6730) at Dawson & Associates for specialist advice.