ABSTRACT
The construction and sale of the vessel may, depending upon their domicile and the location of the shipyard, involve either the buyer or the builder in significant tax liabilities. These may typically arise in the form either of sales or value added taxes related to the contract price of the vessel or of customs or other duties levied on items imported in connection with the contract works, or in respect of the export of the vessel from the country in which the shipyard is located. The SAJ Form follows the traditional geographical formula under which the builder meets all tax liabilities imposed in his own domicile or elsewhere to the extent that these relate to the performance of the contract works. For his part, the buyer is obliged to meet all tax liabilities incurred outside the builder’s domicile other than taxes relating to the builder’s scope of supply and wherever incurred in connection with the buyer’s supplies.
