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Stranded cruise ship in Belfast could trigger new tax rules

Tax on the high seas won’t be ‘plain sailing’

The Villa Vie Odyssey cruise ship currently stuck in Belfast could spur Governments to make new tax rules for long term/permanent cruisers, creating challenges for taxpayers and tax authorities.

Melissa Thomas, Director, said:

The Villa Vie Odyssey is still stuck in Belfast, some passengers now plan to stay on board for the rest of their lives and have purchased cabins to live in. In order to fund this and the ongoing cost of living, many may be relying on active or passive sources of income. Which leads to the question of tax.

There are tax rules for certain scenarios like oil rig workers, airline pilots, seasonal workers and mariners, but not currently for long-stay/permanent cruisers who are earning an income while they sail on the high seas.

Melissa added:

Global tax authorities are going to look at this new class of people, and want to ensure they pay their share of tax. This could be very complicated, for example, will their tax status depend upon where they’ve sailed during that tax year or how long they’ve been in taxable jurisdictions as opposed to the open sea?

Given the complexity of cross border tax laws that our firm deals with currently, I can’t see any future tax legislation for long term/permanent cruisers being ‘plain sailing’ for either tax authorities or taxpayers.

Taxpayers would have to keep a close eye on what waters they are in, for how long and what the relevant tax filing rules are. They would need reliable internet or the ability to post their paper tax return depending on the territory they are in.

Different authorities may want different policies for long-term cruisers, and this could get very complex in waters that have disputed ownership. Tax authorities who are pursuing permanent cruisers for unpaid taxes would have to wait until they docked or track them down on the high seas. As for the latter, I can’t see HMRC opening a naval division any time soon.

Would you like to know more?

If you have any questions about the above, please get it touch with your usual Blick Rothenberg contact or Melissa Thomas using the form on this page.

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Melissa Thomas 2024
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Director
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