Vessel Registration - In Bond Vessels

There are only two types of registration for a vessel in Canada, and they cannot exist at the same time.

A vessel licence may be favorably replaced by a Certificate of Registry. Not the contrary.
       

DEFINITION


When a vessel is delivered by a merchant or a transport company to a location outside of Canada, no Canadian sales taxes are required to be paid. These taxes will be charged only when the vessel will navigate freely in Canada. The payable taxes are calculated on the vessel's value at the time of its import and not on the selling price.

Vessels purchased  outside of Canada and not used to navigate in Canada are also exempt from Canadian taxes.

The "customs" status of such vessels is "in bond".

All imported vessels, except in the case where the law allows an exemption, are subject to sales taxes, regardless of the seller, whether he is an individual or a business.

The owners of "In Bond" vessels, built in Canada, will also have to pay the sales taxes if they want to navigate freely in Canada.

As a consequence of the North America Free Trade Agreements (NAFTA), no custom rights are payable for imported boats built in USA. Only usual sales taxes are payable.


VESSELS KEPT IN USA


If a vessel purchased in Canada is kept in USA, there is however some risk of being taxed by the US authorities. The amounts that could be claimed are lower than the ones claimed in Canada.

Some States consider that when a tourist's vessel is on their territory for more than 30 days and when no sales tax has been paid for this vessel in the tourist country's , a "user 's tax", equivalent to their regular sales tax is payable.

Some States do not closely watch their vessel taxes' records. Either they have other priorities or either their tourism businesses have convinced them not to scare Canadians.

States,  having an economy mainly based on tourism revenues, have issued specific laws to keep their visitors happy .



TEMPORARY ENTRY IN CANADA



The only acceptable reasons for a vessel owner to enter his "In Bond" vessel in Canada are repairs, refitting or alterations. In these cases, the vessel is temporarily allowed by the Custom agents based on some documentation provided by the owner such as the "Canadian Certificate of Registry" and a Work Order prepared by a repairer acceptable by them.

The Canadian Authorities will then issue, for free, a Temporary  Admission Permit (Form E-29B). Some conditions are mandatory in order to stay legal. Here are a few:

  • A repair work order prepared by a marine repairer must be presented with the request of entry, BEFORE the vessel enters in Canada. It may be possible to get a free waiver, if justified by sufficient reasons.
  • The vessel must go directly to the repairer's premises, no possibility to "visit the mother in law on the way". If the vessel entered the country in spring or in summer, the Permit expiration date is set according to the type of repairs needed. The vessel must cross the border at the latest on the expiration date.
  • If the vessel entered Canada in fall or in winter, the repairs may be completed during the winter. It is the owner and the repairers responsibility to ensure that the vessel does not navigate during the authorized period and leaves the country no later than June 15th of the following calender year.
  • A vessel temporarily imported cannot be sold or leased without the payment of due taxes or the Customs Authorities have been officially advised of the sale transaction BEFORE the boat leaves.


VESSEL REGISTRATION



The only Canadian registration for an "In Bond" vessel is the Certificate of Registry (Also called "Blue Book"). This document is neither issued by Canada Customs nor by Canada Revenue Agency.

To be free of problems or delays, contact one of our Marine Advisors before the sale or the purchase of an "In Bond" vessel and also about the Certificate of Registry. 

 
    
© 2017 Hébert et Associés Conseillers Maritime
Hebergement Webdynamique Inc. Montreal,Qc,CANADA