Change in Customs Policy to Selling a Yacht in New Zealand Under Temporary Import Entry (TIE)

Foreign Owned and flagged pleasure craft such as yachts, superyachts, and other recreational vessels entering New Zealand temporarily can enter New Zealand and not be required to pay Duty and GST; and be granted Customs clearance under a Temporary Import Entry (TIE). This allows the vessel to remain in New Zealand for up to 18 months (previously 24 months) without payment of duty and GST, subject to certain conditions such as not selling or offering the vessel for sale without Customs’ permission.

Upon arrival, the vessel owner (usually the owner or person in charge, e.g. the skipper) must complete a Customs Form C4G, declaring that the vessel will not be sold or offered for sale in New Zealand without Customs’ prior permission. The importer also undertakes to pay a specified amount of duty (which includes GST of 15% and Customs duty of 5%) that becomes payable if the vessel is not exported before the TIE expires (or if a condition of permission to market the vessel for sale is breached).

New Zealand Customs has recently revised their approach to granting permission for small craft to be marketed for sale while under a TIE. Permission to sell is now typically conditional on the payment of security in the form of cash or bank guarantee, equivalent to 15% of the value of the vessel (GST component), plus 5% (duty component). These amounts are based on the vessel’s value declared at the time of its initial entry. Specifically the consent is conditional upon marketing the vessel to non – New Zealand residents – although it is not clear to us, how this works in practise, given the international online marketing of vessels. 

Vessel owners should take particular care not to breach these conditions. A breach may trigger an immediate duty and GST liability assessed on the vessel’s original declared value and require the vessel to be permanently imported.

Vessel owners should also be aware that once the liability arises, they may not be able to ask Customs to reduce the vessel’s value declared on first entry to reflect depreciation of the vessel or a lower market value.

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.