The idea of offshore car registration for tax-free cars has always been popular, but more so in recent times. For many years, residents of European Countries had the right to register their vehicle in other surrounding countries tax-free. Why would they want to do this? Usually, it’s because the vehicle they want to import is unable to comply with local vehicle requirements for registration. Usually, the vehicle they are importing is safe and in working conditions, with only the minimal amount of engine emissions. However, the regulations on emissions in some countries are very strict and may require more expensive compliance testing. In addition, there may be other fees required, like VAT or Import Duties. Essentially, the out of country tax-free car registration program saves time and money and lets people drive what they want!
Legally speaking, cars can be purchased tax free, so as long as one takes the necessary steps to avoid duties and tax. However, there is a requirement that states that car owners must live in a different country from their residence at least on a part time basis. Advantages besides low registration costs include lower annual fees, avoidance of all related costs like luxury taxes or VAT and a much lower cost for personalized license plates. In fact, with this type of arrangement under some circumstances you could literally drive anywhere in the world. (Though it’s not advisable to try and skid over the Atlantic Ocean) Nevertheless, with the help of a vehicle transportation service, you could drive all around America and then fly your vehicle to drive in Far East Asia.
For a time, Vanuatu offshore car registration was the most popular option in Europe. However, as of 2008 the country has discontinued its long-running foreign vehicle registrations program. (They even called off the program on their yacht registrations-what is the world coming to?) What happened? Once must realize that in years past, Vanuatu was seen as a tax haven; an island nation that never released account information to other governments or even law-enforcement agencies. They also did not charge income tax, withholding tax, capital gains tax or other types of related fees. (It shouldn’t surprise you to know that providers of the KaZaA network decided to host their controversial services here)
This convenient means of operation obviously led to some abuses of the system and soon Vanuatu was under great international pressure to conform to worldwide standards as regards releasing certain financial details. Eventually pressure from Australia and other nations convinced the Vanuatu government to reconsider a few of its policies and one of the casualties was offshore car registration.
However, there are still options open to you if you want to continue taking advantage of offshore vehicle registration. There is still Andorra as well as Cook Islands, which still hold a duty-free status. There are still options to pursue if you have the great idea of tax-free car registration. For details of the Cook Islands program you can check www.easycarregistration.com
Englishman Peter Macfarlane is an author and lecturer on offshore finance, investment, due diligence and wealth creation matters. After fifteen years advising high net worth clients on offshore asset protection structures such as companies, trusts and private interest foundations, he decided on a career change and now mentors individuals who are interested in creating, preserving and growing wealth in a secure offshore environment. Peter defines wealth in the broadest sense, believing that money is worthless if you don’t have health and happiness. He is now joint editor of The Q Wealth Report, a publication dedicated to publishing freedom, wealth and privacy information for a select audience. More detailed articles about international living are available at the Q.