The new FTA between New Zealand and the EU came into effect on the 1st of May 2024.
NZ & EU Free Trade Agreement Comes into Force
New Zealand's Free Trade Agreement (FTA) with the European Union (EU) came into effect on 1 May 2024, and the implications for those who wish to import new vessels from the EU, and additionally, vessels currently in NZ under a Temporary Import Entry or imported after 1st May are outlined here.
New vessels will have to meet the product-specific rule of origin to be eligible for the preferential tariff rate – of zero. The rule for vessels (or any product classified in chapter 89) is CC; or Max NOM 40 % (EXW).
This basically means the vessel must have been fully manufactured in the EU – including the hull, or if there are imported parts also classified in chapter 89 the manufacturer has achieved an added value of at least 40% of the ex-works price of the vessel.
Second hand EU built boats that have already arrived in New Zealand and currently under a Temporary Import Entry TIE.
If a boat is in New Zealand under temporary entry conditions, then those conditions continue to apply. A deposit equal to the duty payable or other form of security is made and returned to the importer when the good leaves New Zealand.
If the boat is subsequently made available for sale in NZ (by implication changed from TIE to formally imported) then duties are payable.
Under NZ law the duty payable is the duty applicable on the date of entry into New Zealand (i.e. when the boat crossed into our territorial waters) so if it was here before 1 May then it would not be able to access the preferential rate – only available to goods imported on or after 1 May. Duty applicable would be based on the value of the boat.
The EU NZ FTA does not alter normal procedures – just makes duties 0% on EU imports made on or after 1 May. GST still applies on the CIF value for yachts manufactured in the EU.
The same would apply for EU manufactured boats coming from Australia, but the onus is on the importer to prove that the yacht was manufactured in the EU.
This opens the door for us to explore many more options when sourcing vessels for our clients and working closely with our EU colleagues, we will be able to find the exact vessel they require.