The exemption from the IESDMT (Registration Tax) when a charter is carried out per spaces on board or with accessory services of the owner, i.e. when the boat is not purely transferred to the lessee, is under review by the Supreme Court.

The Special Tax on Certain Means of Transport, known as registration tax, is applied to vessels for private or commercial use that are flagged in Spain, or, being under a foreign flag, are used by residents or carry out commercial activities in Spanish waters. The amount of the Registration Tax is 12% of the value of the boat.

The Law regulating the tax provides that owners of boats intended exclusively for renting can request and obtain exemption from the tax, i.e. not pay the latter. However, the Tax Administration has been very restrictive when it comes to interpreting what "renting" means, considering that the activity which is exempt is the one that fits into the definition of renting in the Civil Code, which is regulated in article 1543:
                        In the leasing of things, one of the parties is obliged to give the other the right to the enjoyment or use of a thing for a certain time and a certain price.

Based on this definition, the Tax Administration considers that when a boat is not transferred in its entirety to the lessee, as happens when renting places, we are not faced with an activity related to exemption. The same applies in those cases in which the boat is rented with crew and the lessee has limited authority to define the navigation area and other services are also received, particularly when it comes to the realization of an event. In this way, NauticaLegal Lawyers has been able, on two occasions, to have the High Court of Justice of Catalonia come down in favour of shipowners by protecting the carrying out of charters per spaces on board and the realization of events in the form of activities that can be covered by an exemption from the payment of rent. As far as we know (and the State's legal counsel did not allege this in their cassation appeal), there are no precedents for similar decisions issued by courts in other autonomous communities.

The High Court of Justice of Catalonia, in its literal interpretation of the Law, that says that those boats and pleasure boats or water sports that are effectively and exclusively allocated to the exercise of rental activities will be exempt, considers that "rental activities" include not only the pure and simple transfer of the boat but also cover other services and even tourist excursions.

Unfortunately, the State's legal counsel, defending the restrictive position of the Tax Administration, has filed a cassation appeal against the last ruling before the Supreme Court alleging an interest favouring cassation, since, according to the State's legal counsel, if the doctrine defended by the High Court of Catalonia is imposed, almost any activity carried out with boats (events, tourist excursions) could benefit from the exemption from rental activity, which would imply damage to the collection of taxes.

In our opinion, the position adopted by the High Court of Justice of Catalonia, which matches our own, is in line with the law since we do not see that the legislator, when it says "rental activities", intends to be restrictive.

In the event that the State's legal counsel does not succeed, this would undoubtedly be an important step in the interests of legal certainty for the benefit of those shipowners who do not use their vessels by renting them outright and who also carry out other types of commercial activities. Note that the interpretation of the Administration puts a question mark over the benefit of exemption in some cases even that of leasing with a crew, which is today even regulated by the Law of Maritime Navigation and extremely common when it comes to vessels of a certain size.

Barcelona, September 2019


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