There is no limit to the number of people who work offshore on yachts, cargo and cruising ships. These workers spend most of their time on the sea and sailing across different oceans, which are undoubtedly an exciting profession however, working offshore comes with its drawbacks. First of all, the matter of residential status, if you stay away on a ship for at least a year without stepping a foot in your country, you can claim the non-resident status. Most people think it has a lot of advantages, for example, you get exempted from paying taxes, and you can open an offshore bank account and stay unaccountable to any authorities regarding your finances. These notions couldn’t be more wrong.
The truth of the matter is, only the tax laws for offshore workers differ but there certainly are many short-term benefits to working offshore. However, they are not worth the trouble you will face in your old age. Non-residents are not related to any country and therefore, cannot get retirement benefits or financial aid in their later years. Plus, modern laws provide protection to seafarers, yacht crew members and other offshore workers. That’s why, it is better to keep your resident status and pay your taxes. One exciting thing about paying taxes while working offshore is that you can claim a 100% refund and some more. Here is everything you need to know about offshore workers tax return.
Seafarers Earning Deduction
The most important tax legislature that allows seafarers to get a 100% tax return is the Seafarers Earning Deduction, abbreviated as SED. However, some government officials try to keep this under cover so that offshore workers stay ignorant and forget about their tax refunds. You need the services of professional maritime tax accountants that have specialized knowledge of offshore and marine tax laws. So, make sure to consult marine tax accountants if you want to claim 100% of your tax return.
Other Things you can Claim Tax Refund On
If you keep your resident status but work on the sea for the most part of the year, then not only do you get less tax bill but you can also claim refund on your expenses abroad. Seafarers and yacht crew often have to stay in foreign countries between their voyages and consequently spend money on various expenses. Here are some other things you can claim refunds on:
- Transportation Fees – you can get a refund on all the money you spend on transportation which includes taxi fare from hotel to docks or airport, public transportation in the foreign country, etc.
- Boarding fees – going abroad means you have to rent a hotel room to spend the night. You can claim these hotel expenses in your tax refund as well.
How To Claim these Refunds
You can only get a refund for all of these expenses if you have concrete proof and that’s why you must always keep the receipts and hotel bills with you. The authorities will check the official documents and receipts before refunding the expenses. However, you can only refund the expenses from the last four years.