Following a decision by the Trump administration, to increase tariff charges on the importation of steel and aluminium products into the United States (‘U.S.’) from March 2018, the European Commission adopted a new safeguard measure in the form of the implementing Regulation (EU) 2018/886.
The EU measure applies to 180 U.S. products, including sailing and motor yachts. This means that as of 26 June 2018, any yacht built in the U.S. that is being imported into the EU, will be required to pay 25% Customs Duty in the country of import; this is in addition to the VAT on the hull.
This new measure will apply to any sailing or motor yacht that is greater than 12m in length, with or without auxiliary engines and irrespective of its material of construction (fibre glass, steel, aluminium are all included), which has been built in the U.S and which will be:
A yacht that is coming from the U.S. but that has not been built in the U.S. will not fall into this policy. Likewise, a yacht which has been built in the U.S. but is entering into the EU under temporary admission will also not be affected.
Parts sourced in the U.S. will also be hit by the tax. U.S. brands operating in the EU are reportedly doubtful of how competitive they are now having been forced to up their prices by a quarter.
It is important to point out that the new duties only refer to yachts and other vessels used for pleasure or sports – it does not apply to cruise ships, cargo ships or other vessels used for the transport of persons or goods.
This new Customs Duty charge will also apply to second-hand yachts which are registered in the U.S. and sold in Europe, regardless of where they were built.
As a solution to this hike in prices, owners may wish to look at re-registering their vessel outside of the U.S. to ensure that they do not fall foul of this additional cost to any buyer if they wish to sell their vessel later on.