In a move designed to attract more luxury charter business to the region, the Spanish Congreso de los Diputados has finally paved the way for commercial yachts chartering in Spain to apply for exemption from the infamous matriculación tax presently charged at 12% of the hull value.
Since 1992 Spain has levied an additional tax on certain types of transport, including superyachts, commonly known as the ‘matriculación tax’. This tax is a one-off payment levied on yachts over 15 metres chartering in Spain equivalent to 12% of the yacht’s hull value. It is charged in addition to Spanish VAT which currently rests at 21%.
“Clearly this has resulted in Spain losing out on some exceptionally valuable charter revenue as well as restraining an important sector of luxury tourism for the country,” explains Senior YPI Charter Broker, Vaniese Baldacchino. “It just doesn’t make any commercial sense for our charter yacht owners to pay almost 33% tax when neighbouring cruising areas in France, Italy or even Greece and Croatia are so much cheaper.”
The Government it seems has finally taken on board the years of lobbying from the yachting industry, introducing an exemption to the ‘matriculación tax’.
“Matriculacion tax still exists in that it remains payable on private yachts greater than 8 metres in length registered in Spain and/or used in Spanish waters by individuals or companies who are Spanish resident and/or deemed to be established in Spain,” explains Duncan Swanson, Principal of Oceanskies Limited, a marine consultancy firm specialising in yacht and jet registrations. “Under the new rules, yachts used exclusively for commercial use like charter, regardless of size, can now apply for an exemption to the matriculacion tax. And that includes non-Spanish yachts used for commercial purposes in Spain.”
There are, however, a few caveats to be aware of.
The fact that there can be absolutely no private use of the yacht if the owner wishes to benefit from the exemption technically means an owner would not be able to charter the vessel for himself. There is, however, a generally held feeling within the industry that Spain may well follow the example of France making it possible for an owner to charter his own vessel and benefit from the exemption provided he does so at arm's length, on commercial terms and for a limited amount of the overall charter activity. YPI will be following developments on this issue closely over the weeks and months to come.
“Other than that,” says Duncan, “it is simply a question of the owner obtaining a permit issued by the Spanish Maritime Authority. If the yacht is to charter in the Balearics, a second permit will need to be issued by the Balearic Transport Authority.”
To obtain the permits the owner needs to comply with Spanish fiscal and maritime legislation which requires the owner to hold:
- Spanish Tax I.D. number
- Registration with the Spanish Tax Authorities
- Matriculation Tax exemption Certificate
- Submission of quarterly VAT/Tax returns
Maritime legislation compliance requires the vessel to hold:
- An EU commercial registration
- Valid Commercial Certificate of commercial Compliance
- Satisfactory insurance
- And where applicable, all standard vessel certification such as MLC, ISM etc.
“It is great news that Spain is finally taking concrete steps to align itself more with its neighbours in terms of luxury yacht charter,” says Vaniese. “We have some amazing itineraries for the region and clients who do charter there are adamant that it is a cruising area like no other. We believe that over the months to come, and ahead of the 2014 summer season, many of the remaining concerns hidden in the details will be ironed out and Spain will at last be properly open to luxury yacht charter.”
For more information contact:
************************* DISCLAIMER **************************
This article is intended as a general guide only and does not constitute legal or tax advice. The application of the advice in this article to specific situations will depend on the particular circumstances involved. Accordingly, we recommend that readers seek appropriate professional advice by consulting an Attorney, Chartered Tax advisor or Chartered Accountant regarding any particular problems they encounter. This information should not be relied upon as a substitute for such advice.
Although we have made considerable efforts to be thorough in the construction of this article, we offer no assurance that the information posted here is timely, accurate, complete or applicable to any particular set of facts. Its application to specific situations will depend on the particular circumstances involved. While all reasonable attempts have been made to ensure that the information contained herein is accurate, YPI SAM, YPI Group companies and its legal owners accept no responsibility for any errors or omissions it may contain whether caused by negligence or otherwise, or for any losses, however caused, sustained by any person or entity that relies upon it.