Just as China is emerging as a new market for yacht builders, buyers, and cruisers alike, a proposal may detrimentally impact development. The National People’s Congress (NPC) Standing Committee is reviewing an annual LOA-based tax.
Yachts are actually already taxed additionally as both luxury goods and as modes of transportation. However, Zhang Bailin, vice chairman of the NPC Law Committee, says a more specific tax is better. According to a report in the state-run China Daily newspaper, he told legislators that the tax for owners would range from 400 yuan to 2,000 yuan per meter (about $61 to $304 per meter). The article does not state whether the Chinese government is also considering similarly priced VAT on visiting yachts, similar to how some European nations do.
Regardless, the goal is to close the gap between the wealthy and poor. “As high-end consumer goods, yachts are different from normal transportation tools and should be distinguished accordingly through the tax,” He Yicheng, a member of the NPC Standing Committee, was quoted as saying. “The tax on a 10-meter yacht is lower than that of a vehicle with an engine larger than 4.0 liters, which is unreasonable.”
Members of the marine industry are understandably concerned about the tax proposal. “The new tax on yacht owners will discourage potential customers and hurt the market,” Liu Dianfang, chairman of the Xiamen-based yacht-industry association, says. Liu further pointed out that “yacht” needs to be clearly defined, to specify whether fishing boats or smaller craft in general are to be taxed.
A yacht importer in the same region says the import fees would also be detrimental. “We’re already heavily taxed with high import duties and a consumption tax adding up to 43 percent. We pay 2 to 3 million yuan for smaller yachts and 20 to 30 million for larger ones…. We hope the government will give it more support and imposing a new tax will not serve that purpose.”
Interesting enough, not everyone in the yacht business seems concerned. An article in The Australian newspaper quotes an Azimut spokesperson: “These people already have a few Maseratis, and we are talking about boats worth €10 million [$13.9 million]. They probably aren’t giving too much thought to tax.”
Scott Dillon
Hi, this is a very interesting article. I would like to discuss the above with Liu Dianfang, so if you are able to forward on my email it would be much appreciated.
Best regards,
Scott Dillon.