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Old 08-26-2008
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Flying a Canadian flag w/o paying the taxes?

I talked to a couple recently who are Canadians and bought a boat in the US to take around the world. And because they never took the boat into Canadian waters, they never had to pay the stiff Canadian taxes on her. Does anyone know more about this? I am a Canadian living in the US, have family in Canada and REALLY want to fly a Canadian flag in both the US and other international waters. I also have no plans nor desire to take it home to Canada. I need to know how to register the boat, and what the considerations and rules are for how long I can have a Canadian boat in US waters. Can I just do the Canadian registry and pay WA state taxes to keep her here? I'm okay with paying 8.4% in WA State as long as I can still fly a Canadian flag.
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Old 08-26-2008
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I believe you can.. friends keep a boat in the Caribbean, purchased in Guadeloupe, hailing port is Vancouver (but no taxes paid) and fly the Maple Leaf all the time.

I'm not sure if the boat is truly "registered" in Canada (but does it need to be???)
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Old 08-26-2008
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Is the boat you want to buy new or used? If you buy it from a broker you will pay both the PST and GST. Buy it private and you'll only pay the PST. Here's the good part about buying it privately and I know cause I've done it twice now. When you register your boat and change the title you do it with Service Canada, they will not take your money for the tax owed, but they will give you the proper paper work to make it officially yours. You are suppose to go and pay the tax at some other Government office. I was told that in some odd circumstances they will send you a bill for the tax, but I don't know of anybody who this has happened to. Just play dumb if they do.

Also, if you buy used, get a receipt for a lot less of what you actually paid. Unlike cars, there are no set values on most boats, so they have to take your word. Avoid the brokers and same a bunch of money.

Five years and 2 boats later, I have not paid a cent in tax. Screw the government, he does it to you each day.
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Yes SCUBACrunch you can. I have a friend who purchased a boat in SC and I helped him bring the boat back to Lake Ont. He decided to keep it in Sackets Harbor NY and just drive to it whaenever he wanted to spend time on it. He officially registered it as a Cdn boat flying under a Cdn flag but never paid dime one of taxes because he never imported the boat into Canada. I believe as long as you have a Cdn address you can register your boat in Canada, new rule though...it's only good for three years now. You need to keep renewing it.
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Old 08-26-2008
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I'm in the "It's your boat, fly whatever flag you want" camp.
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Quote:
Originally Posted by canadianseamonkey View Post
....Also, if you buy used, get a receipt for a lot less of what you actually paid. Unlike cars, there are no set values on most boats, so they have to take your word......
This is a VERY risky tactic - you're relying on the seller backing you up if there's any backchecking, and he/she really has no motivation to do so.

This is especially true if the boat is in fact being imported (which I realize is off topic a bit, but worth mentioning.) Customs have more clout (and you have fewer rights) than when dealing with police. They DO check on prices - nowadays it can be done in minutes on-line.
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Faster - yes I agree with you if the boat is being imported it can be risky. Customs can be real pricks, especially in the last year with our $CAD being almost at par.

As far as the flag goes....fly the flag you want. It has everthing do with you, not the boat. Being proud of being Canadian is you right.
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Old 08-27-2008
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Quote:
Originally Posted by canadianseamonkey View Post
Is the boat you want to buy new or used? If you buy it from a broker you will pay both the PST and GST. Buy it private and you'll only pay the PST.
The boat is used, built in Taiwan and currently US documented.

Following one of the responses here, I did a search of the Canadian Vessel Registration site. Indeed, I can register it in Canada even though it will never go into Canada. I'm still looking into the fee structure and exactly how the entire registration is done, but it looks good.

The only thing left there is that we may be taking a mortgage out to pay for her, and the mortgage company will be in the US.

Anyone know if either a US citizen or Canadian citizen living in the US can get a mortgage in the US for a boat registered/documented in Canada but being kept in US waters?

I'm thinking it would be like buying a house in the US through a Canadian mortgage company, ....or buying a house in Canada through a US mortgage company, .........except that houses don't move. Isn't it more about the ability to pay than its registration location? We don't currently own land so it's not a matter of doing an equity transfer, but we do have savings.

And according to the USCG site, I can keep the boat in the US providing I pay a $25 yearly permit fee .....which has to be prepaid on a VISA, MC, AMX or certified account a month prior to its due date. It's a sticker that gets attached to the boat. Prior to 9-11, you could keep your Canadian registered boat permanently in the US if you paid a 1.5% duty on it. That is long gone. Now it's a yearly fee paid through the USCG.

This isn't so much about flying the Canadian flag as it is about taking a US documented vessel into lands where Americans are not looked on very ....nicely. I've heard horror stories of US cruisers having their boats ransacked by border officials just because they were Americans. Not sure if this is true, but am I willing to take that chance if there is another alternative?

Someone suggested that simply flying the Canadian flag on the stern - and the fact that I am Canadian - would hold up just as well as changing the boat's documentation to Canada as well as seeking a Canadian passport for my wife (who has family in Canada but is a US citizen). They suggested that my being Canadian would greatly influence the outcome of any official foreign dealings. Anyone have any such experience in foreign waters?

Thanks for all your feedback, people. As Trish and I get ever closer to our departure day, each day I realize how much more there is to learn about what we are planning to do. The list is long, ...but we are up for it!

Last edited by SCUBACrunch; 08-27-2008 at 01:00 PM. Reason: I like the font.
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Old 08-27-2008
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man, how much are those taxes?

I'm a little confused why it's such a pride point to fly the Canadian flag but you don't want to pay the taxes Canada deems fair... You want USA-cheap prices but Canada's awesome healthcare --- but won't pay the tax for it. man, wish I had those kind of choices!
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Old 08-27-2008
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Canadian taxes on importing our Taiwanese boat is 11% of the value. Add that to the BC PST. That totals $32,000, and the boat will never even see Canada! More importantly, that's like you buying a condo in Palm Springs and the Canadian Government telling you you have to pay taxes on it.

idealflaw, we just want to be safe wherever we roam. As a 53yo Canadian, don't I have that right no matter where I am in the world? I'm keeping my Canadian citizenship because I AM a proud Canadian. I'm merely looking for a way to be safe without forking over a ton of money when there is no need to. This isn't a loophole I am creating; the Canadian Government set this up. I'm merely looking for information on how to do it.

And I live in the US, so forget about the 'cheap Canadian health care'. In fact, since moving here 2 years ago, I have found I have serious health problems that good old Canadian health care completely missed. I found out I have a left-partial-bundle-block in my heart! So, where my three Canadian specialists told me I was taking too much iron in my diet because the world spun every time I exerted, I have been in serious need of medical assistance, assistance that has since cost almost $100,000!

Like the time I was swimming laps in a Vancouver, BC pool and the world suddenly started spinning. I almost drowned! I saw two specialists who both warned me about my taking iron supplements, something another doctor had insisted I take because he'd prescribed other drugs that were breaking down my immune system.

This event happened three years prior to my moving to the US, but am told it is something I have been dealing with for over 20! As the US specialist rattled off the various affects of my problem, I was glad I was sitting down; I can recall these exact symptoms happening for over 15 years prior!

Screw Canadian Health Care! Moreover, I question anyone who thinks they are safe with it. Like the man said, "Free is never cheap!" Or in this case, "Cheap could easily have become lethal!" I want to live!

And in case you don't know, US prices are not cheap, ...especially their health care! $59,000 for an ICD (implanted cardio defibrillator) to monitor and take over my heart if something happens, ....but where I was continually concerned, I now feel bulletproof ...and most importantly, I am safe! Yeah, ...cheap health care, indeed. Even my brother, another proud Canadian, has a US doctor, and I suggest you find one too.

So, having both been through cancer, Trish and I are changing our lifestyles, and South Pacific here we come!!!

But I digress! Back to the boat stuff.

Last edited by SCUBACrunch; 08-27-2008 at 12:51 PM. Reason: poor grammar ....and anal renentive
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