Discussion draft 18 October 2017

SUBJECT / Fiji Revenue and Customs Service
Environment and Climate Adaptation Levy on Superyacht Charter Fees
DATE OF EFFECT / 1 August 2017
CONFIDENTIALITY STATUS / May be released to the public
LEGISLATIVE REFERENCE / Environment and Climate Adaptation Levy Act 2015
Tax Administration Act , 2009
PRACTICE COORDINATOR / Deputy Director Revenue Management
INDEX
Introduction……………………………………………………………………………………….2
Legislative Basis…………………………………………………………………………………2
Application………………………………………………………………………………………...2
Process..………………………………………………………………………………………...... 3
Attachment ………………………………………………………………………………………..4

INTRODUCTION

  1. The purpose of this Practice Statement is to provide guidance on the application of the Environment and Climate Adaptation Levy (ECAL) on Superyacht charter fees. It is issued with the authority of the Chief Executive Officer of the Fiji Revenue and Customs Service who is also the Comptroller of Customs.
  1. The 10% ECALon Superyacht charter fees is applicable from 1 August 2017.
  1. The value of the charter fees is the gross amount charged by the yacht owner or its agent for the charter.
  1. It only applies to yachts that have a permit issued by the Fiji Revenue and Customs Service to charter Fiji waters.
  1. The ECAL is payable by theSuperyacht agent and is payable before a charter permit is issued.

LEGISLATIVE BASIS

  1. Section 2 (d) of the Environment and Climate Adaptation Levy Act 2015states thatECAL ischarged on the gross charter fee paid and collected under the Superyacht Charter Act 2010 . It states-

“Environment and Climate Adaptation Levy” means a levy imposed on—

(a) prescribed services under Part 2;

(b) prescribed items under Part 3;

(c) prescribed income under Part 4; and

(d) the charter of a superyacht at the rate of 10% of the gross charter fee paid and collected under the Superyacht Charter Act 2010;”

  1. The Superyacht Charter Actprovides for the registration of Superyacht agents and the calculation of ECAL on gross charter fees.
  1. A worksheet for calculating ECAL is provided in the Superyacht Charter Act Schedule. A copy of the worksheet is given in the Attachment to this Practice Statement

APPLICATION

  1. The Superyacht Charter Act provides that a Superyacht agent is responsible for the following-

-to apply for and be the Vessel or Superyacht Charter permit holder on behalf of the Vessel Owner;

-to ensure that the requirements for approval in the Superyacht Charter Act are met before making an application;

- to collect all the documentation, fees and taxes required under the Superyacht Charter Act and Fiji's tax laws in relation to the charter.

  1. The charter fees is payable for each charter of a Superyacht before the permit in respect of that charter trip is issued.

Example

Yco is the registered agent for several Superyacht owners that visit Fiji waters. The following charter agreement was submitted to the Fiji Revenue and Customs Service for vessel/charter permits on 2nd September 2017. The charter fee per week in USD is equivalent to FJD$150,000
Yacht name / Date of trip / Duration / Gross charter Fee ($USD) / Levy
(10%) based on amount of charter fees in $USD converted to $FJD
Seashells / 10th September / 6 weeks / $900,000
(150,000 x 6 weeks) / $90, 000
After processing of the application, Yco is issued the assessment notice and makes the payment at the Fiji Revenue and Customs Service cashier. The permits are issued after the payment is receipted.

PROCESS

  1. A recognised superyacht agent for the purposes of the Superyacht Charter Act is the person responsible for payment of ECAL.When applying for a permit, the Superyacht agent is required to ensure that the following conditions exist:

-the charter contractis valid;

-the charter will carry up to 12 passengers;

-the weekly charter fee under that contract should not be less thanUSD$55,000.00 or the equivalent value in another currency;

-the Superyacht has valid and acceptable marine certificates for the purpose of carrying passengers.

  1. In relation to an approved application, the CEO will issue a permit after the ECAL is paid.
  1. For comments and enquiries please e-mail:

ATTACHMENT

Extract from Schedule 1 Superyacht Charter Act– Superyacht Charter Fee Worksheet

RecognisedSuperyacht Agent / ......
Superyacht Name / ......
Superyacht Registration # and registration body / ......
Vessel Permit Fee Paid [Agent to initial] / Yes/No
Fiji Government Revenue Receipt # / ......
Captain's Name / ......
Crew Manifest Attached [Yes/No] / [Yes/No] / ______
Charter Agreement enclosed [Yes/No] / [Yes/No] / ______
Superyacht MCA Certification attached / [Yes/No] / ______
Fiji Charter Dates: Depart Port date / [DD/MM/YY] / ______
Re-Enter Port date / [DD/MM/YY] / ______
Total Charter Days
Total Gross Charter Value - Currency Code
Total Gross Charter Value
Fiji Government Environmental and Climate Adaptation Levy @10%
Converted to Fiji Currency at Translation / Rate FJD$1.0000 =
Fiji Currency Superyacht Charter Fee in FJD$ (VAT Exclusive) / FJD$
Declarations:
Declared True & Correct by the Captain / ______/ Superyacht Stamp
Declared True & Correct by the Agent / ______/ Agent's Stamp
Fiji Superyacht Charter Fee paid date / ______
Fiji Government Revenue Receipt # / ______

DECLARATION: I, the undersigned, being duly authorised by the vessel owner, hereby declare that the information contained in this form is correct and complete, and I authorise the Chief Executive Officer to make all the necessary enquiries and to conduct all the necessary verifications in relation to this Schedule.

Name(s): ______

Recognised Superyacht Agent:______

Signature:______

======End of PS======

1