Provided by SV Leu Cat (USA)

July 1, 2015

We are currently undergoing a retrofit in Simon’s Town, South Africa.  It is a lovely, quiet and quaint seaside village with a very nice marina and good services.  It is close to Cape Town but lacks the hustle and bustle of that wonderful city.

When we first made landfall, it was in Richards Bay and, at the time, we were informed that we could keep our sailboat in this country for up to a year without incurring VAT on our boat.  This was good news because we were anticipating a retrofit project once we arrived in Simon’s Town.  Plus, we were anticipating having to return to the US for an extended period of time to attend two family weddings, one being our son’s.

While in the US, we received an email from some cruiser friends of ours who had just arrived in Simon’s Town and were surprised to learn that we were leaving our boat there for almost a year.  They had heard that foreign-flagged yachts could only stay in South Africa for 3 months before Duty and VAT would be attached.  To confuse the matter further, the local yacht club had provided them with a written statement that foreign yachts could only be in the country for 6 months before Duty and VAT is attached.  This information generated great concerns to us since our boat had already exceeded both the 3-month and the 6-month time periods and we were still in the US.

Upon return from the US, we have recommenced our retrofit projects and also had the opportunity to meet with Customs to discuss the situation and get a more firm understanding of the length of time a foreign flagged pleasure vessel can remain in the country and not have VAT attached.

Initially, the Inspectors we met with in Cape Town were unaware of this confusion and thought that the 1-year ruling, which had applied to the 28 yachts that were impounded in 2012, still applied (see this noonsite.com article for the background and outcome of that incident).  However, they promised that they would look into this issue further with their superiors and would get back to us

We have just received a call from Customs Inspector Tumi Obanbse (cell number: 021 440 0737) of the Customs Office, Cowrie House, Duncan Road, Cape Town, informing us that there are no 3-month, no 6 months, or even 1-year time periods before Duty or VAT can be attached.

She stated that our boat can stay in South Africa indefinitely and no Duty or VAT will be attached.

Given the previous research that we had conducted into this matter, her information makes sense.  Since there still is not any South African law or regulation written which addresses foreign flagged pleasure vessels and the attachment of Duty or VAT, there is no time frame defined.

We can understand the history of confusion on this issue because she did also state that our time in South Africa is actually determined by our visa, which is 90 days (or approximately 3 months).  Once a 90-day “walk-in” visa is granted, it cannot be renewed or extended during that period.  One must be out of the country when it expires and then returns after its expiration to be issued a new 90-day visa.

However, this 90 days (or approximately 3 months limitation) applies only to the person it was issued to, not to that person’s yacht.

We also understand that there is a South African law which states that VAT does attach to foreign flagged commercial vessels after 6 months.  However, this time period is specific to commercial vessels and does not apply to pleasure vessels.

Regarding the basis of the 1-year period, before Duty and VAT is attached, we understand that this period was just a period of convenience stated by the senior Customs official dealing with the owners of the 28 foreign flagged yachts that were improperly impounded by his agency back in 2012.  The one year allowed enough time for those yacht owners to complete their “boat projects” and leave the country during the better time of the year regarding weather and sailing conditions.

As an aside, we found the Customs Inspectors we spoke with to be very helpful and professional. This applies especially to Inspector Obanbse, who took this issue to heart and got back to us on the same day as our inquiry.

David Leu

SV Leu Cat (USA)

South Africa Formalities – noonsite.com

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