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Tax implications

Posted 3/1/2018

Taxes have often been a reason for worry when a boat owner decides to cross customs and bring their vessel back into Canadian territory for the first time.

Once the owner decides to bring the vessel into Canada for use, it is at that moment when he reaches the boarder that he will be required to pay his taxes.

Customs agents will need to see the vessel and all pertaining documentation with proof of ownership, such as a contract, Bill of Sale and registration.

Once verifications are done and requirements have been met according to Canadian customs, the owner will be asked to pay the Federal taxes and taxes of the province where he or she resides.

Keep in mind that duty should also be taken into consideration when entering Canada if the Free Trade Agreement, also known as the Nafta Agreement, with the country where the vessel was built, is not applicable and as of September 2017 the CETA, also known as the Comprehensive Economic Trade Agreement, may apply to vessels bought and built in Europe and delivered and navigated into Canada.  Owners will need to provide proof of manufacturing in Europe and other documents that pertain to its origin.

Take note that there are different circumstances to tax implications and requirements when buying or selling a vessel in Canada or outside Canadian territory, in consideration of all the different circumstances that can arise it is difficult for the team at Legal Marine to have them all specified in this article.

For further information on this subject, whether you are a yacht broker or an individual selling, buying, exporting or importing a vessel, we encourage you to not hesitate in contacting our staff and we will be more than happy to explain the tax issue for your particular circumstance.


From the team at Legal Marine