Not content with making India’s wealthiest families pay more tax on their incomes, the super-rich may also have 10% added to their spending on luxury goods.
The tax hike for the nation’s richest 43,000 individuals covers a wide range of must-have gadgets and goods for someone who has an expensive shopping list.
Finance Minister P Chidambaram is proposing to push up the price of sports cars, mobile phones, yachts, homes and even cigars to raise more cash for the country’s coffers in response to criticism that too fee people pay too little tax in the nation of 1.6 billion.
Tax on luxuries
Duties go up on:
- Imported cars
- Motorcycles over 800cc
- Yachts – in a country with only 25 yacht owners and where a 50-foot boat can cost 1 million euros
- Phones and tablets – Popular Apple and Samsung gadgets costing more than 2,000 rupees all increase in price
- Cigars and cigarillos – Duty is set to rise
The measures are part of a tough Budget 2013 in India aimed at bringing more people in to the tax net.
Set sail for yacht VAT bonanza
Meanwhile, super yacht owners from all over Europe are setting course for Croatia to register their boats and qualify for a VAT discount.
Croatia is due to become a member of the European Union on July 1, 2013, but the nation’s VAT rate is out of kilter with other countries in the EU.
To make VAT rates fairer, a concessionary rate is available in the country until membership of the EU is completed.
Under European rules, yacht owners who want to sail between EU countries have to register their vessels and pay VAT.
As the concessionary rate is much lower than standard VAT rates in many other EU countries, paying the bill in Croatia works out much cheaper than settling the debt in other nations.
Registration delays
The government is willing to accept just 5% VAT – giving a 1 million euro new boat owner a saving of 200,000 euros on the usual 25% 250,000 euro bill.
To qualify, boat owners have to take their vessels to Croatia before midnight on May 31, 2013 – as the offer is withdrawn the next day.
Yacht owners are warned that registering a vessel in Croatia can take several weeks, so waiting until the deadline could cost a significant missed tax saving.
