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Owners use foreign flags

Owners use foreign flags
Despite the recent increase in the number of yachts flying Turkish flags, there are still many owned by Turkish citizens but not registered in Turkey to evade taxes, among other reasons, the Turkish opposition has claimed.

The Republican People's Party (CHP) İstanbul deputy Aydın Ayaydın told Today's Zaman that the common use of foreign flags on Turkish citizens' yachts damages Turkey's reputation.

"It is also claimed that those who prefer to fly a foreign flag on their yachts are engaged in the unlawful act of smuggling and want to keep their name clean in the Turkish public or avoid facing a confiscation order issued by the Finance Ministry for their failure to pay tax. Regardless of the circumstances, this greatly damages the country's standing," he explained.

Responding to the criticism, Transportation, Maritime Affairs and Communications Minister Binali Yıldırım said recently that thanks to regulations introduced by the ministry, raising the Turkish flag on private yachts had become much more attractive for a while.

Yıldırım said: "After Law number 5897 was enacted and the taxes and fees imposed on yachts were reduced, 2500 yachts chose to use the Turkish flag instead of foreign flags. However, the law has expired and they have stopped registering at Turkish ports. We need to revise the regulations."

Yıldırım also said that legal regulations lack measures to incentivize Turkish owners to switch their registration to Turkey. “A large number Turkish citizens still prefers to fly a foreign flag on their yachts,” he admitted.

According to Yıldırım, one of the most important reasons for the use of a foreign flag is that the yacht owners are not willing to show the vessel on their property declarations because the owners want to make sure that the state doesn't know they own these yachts.

The minister hinted that the government may introduce new legal measures to tackle this issue but emphasized that regulations alone are not enough. “The problem is the Turkish system of taxation. In other words, I think that this matter should be considered alongside preventing other activities in unofficial economy,” he added.

When asked if limiting the period of time a foreign-registered yacht may remain in Turkey to six months would help, Yıldırım said that they are working on this.

“But they figured out a solution to this as well. Turkish territorial waters are not that extensive; they just leave Turkish waters and re-enter within the same day. To solve this problem, the Finance Ministry has to admit that having a yacht is not a luxury but a need. This is how I view it, personally. Having a yacht is considered a luxury item but some yachts are cheaper than some automobiles,” he added. Luxury goods are taxed at higher rate in Turkey; a potential reason for reluctance to change a vessel's registration.

Recalling that yachts up to five meters in length pay no fees; while yachts between five and nine meters must pay TL 272 per year to the Ministry of Transportation, Maritime Affairs and Communications; and yachts between nine and 12 meters pay TL 544; yachts between 12-20 meters pay TL 1,089; yachts between 20-30 meters pay 1,179 and yachts larger that 30 meters in length pay TL 4358, Yıldırım stated that all of them are also exempt from beaconage fees and sanitary dues.

Yıldırım stressed that smuggling is an issue that bothers everybody very much and security measures along Turkey's sea borders are coordinated by the Interior Ministry. He pointed out that a tracking device is attached to all ships entering Turkish territorial waters as a part of Turkey's automatic identification system which allows them to monitor all yachts legally entering Turkish ports for the duration of their stay.“We are able to monitor ships while they are in Turkish territorial waters. These smuggling activities are carried out via unregistered and very unsafe boats that sail in coastal waters where there are no ports in order to bypass our identification system. The Coast Guard Command provides patrolling services but sometimes they fail to detect the smugglers. Currently we provide the automatic identification system in 76 ports and 74 docking locations. During the last few years, the docking capacity of Turkish ports has increased from 9,000 to 17,000 vessels. Turkey is a tourist destination and yachting is important to sea tourism. We aim to increase the docking capacity of Turkish ports to 50,000 yachts by 2023," Yıldırım said.

Ayaydın claimed that the only reason behind the decision not to use the Turkish flag is the yacht owners' preference not to register their assets in Turkey to avoid taxes. He recalled, too, that the finance minister had also implied this during parliamentary budget talks.

“Although 18,000 yachts are currently docked in Turkish ports, only 2,500 of them carry the Turkish flag. It is not too important from an economic perspective, but it damages Turkey's prestige. They aren't asked ‘Why don't you pay your taxes when you have a luxury yachts?'” Ayaydın explained.




source: todayszaman

photo: iha

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