Year 8 Day 6 Two Mysteries Solved
30 June 2015 | False Bay Yacht Club, Simon's Town, South Africa
Dave/Sunny
Today Mary Margaret and I hopped in our rental car and drove in to Cape Town. We were on a mission to solve two mysteries that were bothering us.
The first was an issue only due to my poor memory and inability to find the card of the person who picked up our sails last December to repair them. In other words, this Old Salt could not remember where our sails were and who picked them up and could not find the records he had made documenting this information seven months ago.
I knew I had talked with both North Sails and Ullman Sails regarding the repair work we needed done but could not remember which I had selected. Thus, we headed into Cape Town and first went to the North Sails loft. Thanks to our Google Maps app on our smart phone, within an hour we were parking in front of their loft. After going inside and explaining our situation they and we both agreed that their loft did not have our sails. In the process of getting to that understanding, I met each of the people that worked there and realized that none of them looked like the guy who picked up our sails. I explained to them what he looked like and Steve, one of the senior people at North Sails, immediately knew that I would have been dealing with Ullman Sails. The receptionist called Ullman for us and we were soon talking with Warren. Yep, he was the guy I met and took our sails. He immediately recognized my name and voice and even asked how our son's wedding went! I used to have a memory like that. Ah, those were the good old days....
Warren was busy getting another boat set up in the water right then but agreed to call tomorrow to work out the details of returning the repaired sails to Leu Cat and then picking up our bimini and side panels for their needed repairs. One mystery solved!
The second mystery required us to drive over to the Cape Town Customs house next to their commercial port. When we had cleared into South Africa at Richards Bay last October we were told that we could keep Leu Cat in South Africa for up to 1 year without having to pay VAT (Value Added Tax which is assessed at about 15% of the boat's value). We are talking big bucks worth of taxes, so it was something that was near and dear to our hearts.
However, when we were back in the States this last April we got an email from our old cruising friends, Marcie and David, of S/V Nine of Cups. They had just arrived in Simon's Town and saw our boat. They talked to the Yacht Club enquiring about us and were told that we would be returning in July. This piqued their curiosity since they had been told that a foreign flagged vessel could only be in South Africa 3 months before a VAT was applied. They then talked with Customs and were told the VAT would be applied to a foreign vessel after 6 months. Either of these scenarios would be disastrous to us since we were then in the US and our boat had exceeded both the 3 and 6 month time periods. When they emailed us and explain what they had been told, visions of about $70,000 dollars of taxes ran through my head. OMG! What a mess this could be. Mary Margaret and I plotted various "escape from South Africa" strategies (needless to say all being illegal) that we would look into when we returned to our boat.
The VAT issue is a real issue because in 2012 28 foreign flagged boats were impounded by Customs because they had exceeded a 6 months period. As it turns out, there is a law on South Africa's books which is specific to commercial vessels which states such a VAT would apply after 6 months but there is no such law written specific to pleasure vessels, such as sailboats. Custom has just applied the commercial vessel law to pleasure boats.
After the uproar from the cruisers settled down, a senior Customs official from Johannesburg met with the cruisers and admitted that Customs was in error and he released their boats, removed the VAT payment requirements and quenched any fines and penalties that Customs previously had threatened. He told them that South Africa would address this problem with a new law. Until then, boats could stay in South Africa for up to 1 year, VAT free.
This 1 year period is what we were told by Customs in Richards Bay when we cleared into the country last October but I failed to get anything in writing from them at the time. Then, I received the email from Nine of Cups...
Well, this mystery concerning VAT requirements was solved today when we talked to Customs in Cape Town. Quaking in my boots when I stepped up to the Customs counter, I explained our situation (keeping who we were along with the name and location of our boat a bit fuzzy) and requested clarification. I presented the article which gave the senior Custom officer's name who resolved the former VAT issue with the 28 other cruisers back in 2012. The two Customs Inspectors we were meeting with said they really did not know anything about this issue but would look into it with their superior and call me back.
This afternoon, one of the Inspectors called and gave me the low down...
She said that there still was no law which addressed this matter and therefore, we could keep our boat in South Africa as long as we wanted. There was no 3 month, no 6 month or no 1 year rule that we needed to worry about. Instead, our Visa was the document which would determine how long we could stay in the country but our boat could stay as long as we liked!
Whew, this was great news. When I met with the Inspector this morning, I had her write her name and phone number on the article I had presented so if we did have any issues when we clear out this September, I could contact her and she could smooth the way for our departure. The second mystery is solved!
To celebrate this great news, Mary Margaret and I used our smartphone to select a restaurant for lunch. Mary Margaret picked a place that featured Mediterranean/South African dishes called Café Paradiso. When we arrived, we were rewarded with great food, great wines, great ambiance, great prices and a waiter that was superb and very personable! I will post pictures of this place to this blog so you can see what I mean. For $110 SAR ($9 US) we were in foodie heaven. OMG! We are most definitely coming back!