Bahamas Government Plans to Eliminate Duty and VAT on New Pleasure Vessels

Government plans to make big changes to The Bahamas’ boat tax and registration fees could add up to a big positive impact on pleasure vessels and the entire yachting industry in the country.

The Prime Minister and Minister of Finance, Philip ‘Brave’ Davis said the Bahamian government will eliminate duty and value-added tax on boat purchases. Instead, a new fee schedule for registration will be rolled out in an attempt to get more boats to register in the country.

According to Davis, the current system’s duty and VAT rate is “too onerous” compared to the costs of registering a vessel in other nations, such as the United States, Jamaica, and the Cayman Islands. Because of this problem, boat owners now often avoid registering in The Bahamas entirely by paying a $1,000 cruising permit instead, he said.

This change could be another positive thing for the yachting industry in The Bahamas, which already boasts a great climate year-round and some of the best deep-water marinas in the world, including Hurricane Hole Superyacht Marina on Paradise Island.

Under the proposed changes, annual costs for boat inspections and master license fees would increase, and annual boat registration fees would go up by 20%. The fee to transfer registration would also increase, up to $100 from the current $10.

It amounts to a net win for the yachting industry in the country because it could make The Bahamas even more enticing for boat owners.

The current system for pleasure boat purchases imposes a duty rate and VAT that are each 10% of the value of the vessel, which can quickly become an imposing tax liability of hundreds of thousands of dollars for a yacht or superyacht that could easily be valued at more than $1 million.

Instead, annual boat registration fees would be raised 20% over current amounts. For example, a boat between 25 and 50 feet would have a fee of $120 per foot, as compared to $100 currently. Boats more than 100 feet would face an annual fee of $480 per foot, while the current rate is $400. 

While registration fees will go up, the VAT and duty on purchases will be eliminated, offsetting the increases. The goal, according to Davis, is to encourage domestic registration of pleasure vessels.

He said a maritime revenue task force is being established to bring in more money through new policies that encourage compliance and updating penalties for noncompliance, among other changes.

Read The Tribune to learn more about these exciting proposed changes for boat and yacht owners in The Bahamas.