Legislative Changes & Careful Consideration of Regulatory, Compliance and Taxes
By Liesl Tziolis, Legal Consultant
The Australian superyacht industry is a potential economic powerhouse for the Australian economy. The country is blessed with an abundance of incredible coastline, beaches and amazing destinations for boating and yachting as an alternative to competitor destinations such as the Mediterranean and Caribbean. Investment in infrastructure as well as an increase in the number of superyachts in the region prompted the Australian government to introduce legislation in 2019 to encourage growth in the luxury maritime superyacht chartering industry. This legislation was not extended past June 2025 and as a result the current legislative framework is not quite “fit for purpose”. This article addresses the current legislative and tax issues for foreign superyacht owners who are considering a superyacht chartering business in Australia.
SPECIAL RECREATIONAL VESSELS ACT (2019)
In 2019 the Australian government introduced the Special Recreational Vessels Act (2019) (SRV) to facilitate foreign flagged superyachts to conduct chartering activities for up to 12 months in Australian waters to encourage economic opportunities in luxury maritime tourism without triggering import duties under the Customs Act (1901). It allowed the owners of foreign flagged superyachts to “opt” in to the provisions of the Coastal Trading (Revitalising Australian Shipping) Act 2012 (CTA) to obtain temporary licences for “chartering activities” even though s12(f) of the CTA specifically excludes “recreational vessels”. The RVA also disapplied the constitutional limitations in section 4 of the CTA which had the effect of superyachts being considered as “international commercial vessels” rather than “recreational vessels”. As the SRV is no longer in force, the licensing regime has now defaulted back to the CTA and the Customs Act 1901.
CURRENT REGIME FOR COMMERCIAL ACTIVITIES
If a superyacht wishes to conduct inter-state commercial activities in Australia, the master, owner, charterer or agent of the vessel or a shipper must obtain a licence under Division 2 of the CTA (Temporary Licences) which facilitates access to ports along the Australian coast allowing the vessels to carry passengers or cargo between interstate ports. The licence is valid for 12 months and is limited to the voyages authorised by the licence. To add further complexity this licence is not required for intrastate voyages. It is recommended that Superyacht owners apply for a section 12 Declaration in order to conduct intrastate voyages, to resolve any ambiguity.
The Act empowers the Minister to impose compliance obligations on the holder of the licence which may result in a commercially unfavourable outcome. Under s61 of the CTA, the licence holder must give notification of the details of any voyage at least 2 business days before “loading date” and under s62 further notification of the details of the voyage within 10 days of completion of that voyage including the name of the vessel used, actual loading and unloading dates, number of passengers and ports visited. In the case of cargo, the licence holder must notify the details of the kinds and volumes of cargo, dates carried and ports where cargo is loaded and unloaded. The licence also specifies Acceptable Tolerance Limits for passengers and cargo and any breach of these limits by +/20% is deemed a breach of the conditions of the licence.
Any substantial variation to the authorised voyage will be deemed a breach of the licence. CSL Australia Pty Ltd v Minister for Infrastructure and Transport [2014] FCA 1160.
Applications and notifications are made through the Coastal Trading Licensing System portal on the website of the Department of Infrastructure. www. infrastructure.gov.au/
Temporary licensing for superyachts that will carry on commercial activities (such as chartering) shields the parties from import duties and GST liability on the entry of the vessel into Australia but any income the vessel obtains through the chartering activity remains subject to Australian GST. The vessel owner or charterer must register for GST and comply with any other applicable ATO obligations including income tax obligations and employer obligations or appoint a resident agent to do so on their behalf.
The CTA imposes a heavy regulatory and compliance burden on foreign flagged vessels which may explain why very few CTA Temporary Licences have been granted.
ALTERNATIVES TO CTA TEMPORARY LICENSING
Given the regulatory burden imposed by the CTA it may be more commercially sound to consider other options including importing the vessel and paying the import taxes and GST which allow an operator to make more commercial decisions on the use of the vessel without having to notify or seek authorisation from the Minister for variations.
The foreign flagged vessel may be chartered to an Australian company that is registered for GST which imports the vessel and claims the GST back as input tax credits. Alternatively, a registered tax agent may apply to defer the GST liability and use input tax credits to offset any GST liability from commercial activities carried out by the vessel. It may even make financial sense depending on the proposed commercial activities to import the vessel, pay the GST and change the flag of the vessel to an Australian flagged and registered vessel and operate commercially to recover input tax credits.
CURRENT REGIME FOR RECREATIONAL ACTIVITIES
Vessels that engage only in recreational or “pleasure” activities are excluded from the operation of the CTA and fall within the provisions of the Customs Act (1901) overseen by Australian Border Force.
Foreign flagged superyachts that arrive in Australian waters, under their own power (i.e they are not imported on a ship or other vessel) for recreational activities only must obtain a Control Permit issued to the Master of the vessel which is valid for up to 12 months or the length of the Master’s visa, whichever is less. A Control Permit allows the vessel to undertake non commercial activities such as cruising or transiting through Australian waters and stopping at designated ports, but eligibility requirements are strictly enforced. The vessel must arrive from overseas and depart from Australia to overseas and be privately owned (including by a company) if the owner is not an Australian citizen and in the case of a corporate owner, any Australian citizen owner owns less than 50% of the shares. The vessel or parts of the vessel cannot be offered for sale, sold or disposed of in any way while under a Control Permit although a vessel may undergo repairs or refit while in Australia and not incur GST.
The application is made to the Maritime Traveller Processing Committee (MTPC) through the Air and Sea Approvals Portal and must be made no later than 10 days prior to arrival confirming the full itinerary, vessel details and port intentions.
While the vessel is on a Control Permit it remains under customs control and is therefore subject to the Customs Act 1901 and the Customs Regulations 2015. There are ongoing notification obligations to Australian Border Force including pre arrival notifications and arrival at a designated port.
The vessel is shielded from import taxes and duties as long as the vessel leaves Australia within 12 months as per the Control Permit. The Control Permit may be extended upon application provided that the eligibility criteria for the permit are still met which is impliedly dependent on the Master’s visa. If this is not the case or circumstances have changed then it is highly likely that the Control Permit will be revoked and the vessel will be deemed imported, requiring the payment of import duties and taxes.
IMMIGRATION AND BIOSECURITY FOR BOTH CONTROL PERMITS AND CTA LICENCES
All passengers and crew must hold appropriate visas and comply with all Australian biosecurity laws.
To conclude, bringing a foreign flagged superyacht into Australia for either pleasure or commercial activities requires careful consideration of the regulatory, compliance and tax burdens to determine which structure works best in the individual circumstances.
For more information, contact Capt. John Kavanagh
Ph: 0481 170 373 Principal Lawyer – Master Mariner
john@pacificmaritimelawyers.com.au
Published in print April-July 2026
