Taiwan Yacht builders appeal to put an end to luxury tax

A delegation of yacht builders meets with national legislators

A delegation of yacht builders has requested to President Ma Ying-jeou to stop listing yachts as luxury items. The Taipei Times reports that the delegation, headed by Taiwan Yacht Industry Association president John Lu, yesterday visited the Legislative Yuan.

“Yachts should be considered a consumer product rather than a property or a luxury product that can be used for speculative profit. Most importantly, the industry creates jobs and could be an integral part of Taiwan’s development of the recreational marine industry,” Lu said in a written statement.

Furthermore, the delegation met with leaders of the Chinese Nationalist Party (KMT), Democratic Progressive Party (DPP) and Legislative Speaker Wang Jin-pyng.

Lu stated that the government’s policy of backing the recreational marine industry was being countered by a 10 percent luxury tax on boats over NT$3m (US$100,000).

Legislators were told that the tax has not only damaged boat manufacturing in Taiwan, but has also lowered overall employment numbers.

Lu said the government has only collected NT$5m in luxury taxes from yacht buyers. “However, every order for a new yacht could create 100 jobs,” he added.

Taxation Agency Deputy Director-General Hsu Tzu-mei told the paper that the Ministry of Finance is reviewing the luxury tax. But Hsu said that the tax does not hurt local business prospects because a majority of Taiwan-made yachts are sold to foreign customers.

According to TYIA, Taiwan is the sixth-largest yacht manufacturer in the world, with annual revenues of US$250m.

For further information on the Yachting Industry and Yacht market in Asia please contact us at Market@RodriquezConsulting.com

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The Global Ultra Wealth Report

The global recovery continues to show signs of weakness. Heightened Eurozone financial market and sovereign distress, stuttering recovery in the U.S. and slower than expected growth in major emerging market economies are the main drivers behind the IMF’s recent adjustment of its forecast for global growth downwards to 3.5% for 2012 and 3.9% for 2013. The two main assumptions that the forecast is founded upon are policy action in the Eurozone that allows financial conditions to ease gradually and recent monetary policy changes in emerging market economies gaining traction.

The continual recurrence of financial market distress leading to sovereign distress and bailout packages that provide temporary relief in the Eurozone heightens the potential for uncontrolled default and Euro exits. Both these scenarios will certainly have a severe impact on global economic growth prospects and wealth growth.

WEALTH TRENDS

Investment

UHNW investors are shifting their wealth into private companies, real estate and commodities.

Risk aversion is largely reflected in the shift away from speculative financial investments to hard assets.

Professionals and institutions engaging with UHNWIs should consider strategies and approaches that address the current concerns and focus of these clients.

Reduction in Tax Exposure

As governments around the world look to revive state finances through higher and stricter taxation regimes, UHNWIs look to reduce their tax exposure through a shift to territories with beneficial tax regimes. Professionals engaging with the ultra wealthy need to consider strategies that reduce tax exposure and address their clients’ concerns.

WEALTH CURRENTS

2012 at present has been a year of shifting wealth currents, with the broad direction for wealth flows going eastwards. Eurozone UHNWIs, concerned over volatility and distress in sovereign and financial markets, have shifted wealth away from the periphery towards core economies with Germany and Switzerland as favored destinations on the Continent. Other beneficiaries include the United Kingdom, the US, Hong Kong and Singapore.

The shift in wealth growth to emerging economies poses a challenge for wealth management firms based in the U.S. and Europe, who need to convince clients of their long term viability. In contrast, finding and keeping talent in developing markets is a key success factor as wealth management firms need to invest in human capital to capitalize on the opportunities presented by the shift.

STATE OF WORLD’S UHNW POPULATION

· The global UHNW population stands at 187,380 with a combined wealth of US$25.8 trillion. Combined wealth attributable to this segment shrank by 1.8% from a year ago. The decrease was largely driven by the Eurozone crisis and a slowdown in emerging economies.

· Oceania saw the greatest growth in UHNW population, with an increase of 5.9%, largely driven by the continued growth of Australia.

· Asia, in contrast, saw the largest percentage reduction in UHNW population amongst the regions. The 2.1% reduction in UHNW population is a result of poor equity performance, particularly in Japan, China and India.

· Combined wealth loss was highest in Asia as Hong Kong, China and Japan led wealth loss across the region.

· The U.S. leads in terms of real growth in UHNW population numbers, with 2,250 UHNWIs joining the ranks of the ultra wealthy. The combined total wealth of the U.S. UHNW population expanded by US$ 265 billion.

or For more information or to receive a copy of our complete Wealth Report or our most recent Yachting Industry Market Analysis please contact us Market@RodriquezConsulting.com

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