The Spanish Tax Office count yacht non-residential owners as able to let it in Spain and still exempt from matriculation tax.
Last October, a key modification took place for a Spanish registration tax applicable on vessels, the IEDMT (Special Tax on Certain Means of Transportation well know as Matriculation Tax) aiming at, finally, letting Spain enter the rental market for large yachts. This levy taxes the registration or the use of leisure vessels within Spain by residents (both individuals and entities) or those vessels operating from this country. The tax amounts to 12% of the value of the vessel.
The change we are talking about consisted in the possibility that any yacht (independently from its length) used for charter only, may be exempted from matriculation tax on request. To date, this was limited to leisure vessels under 15 metres long (49.21 feet).
Nonetheless, eligibility for this tax exemption entails that the owner, or any person related to the owner (such as an associate or a relative), is not able to use the vessel, not even for rental, as it is expressly forbidden by law. May this breach be found out by the Spanish Tax Office (Agencia Tributaria), the assessment of the registration tax would take place.
This is a key obstacle to operate in Spain, considering that many rental ships are also used or let by their owners as well as by people related to the owning company.
Under such circumstances, in our seasoned expertise to interpret the Act of Special Taxes, and knowing that the IEDMT is incurred whenever the use of the vessel in Spain is performed by a resident or established, from Blas de Lezo Abogados, we brought a client before the Spanish Tax Office for the following consultation:
"A non-resident entity wants to apply for IEDMT exemption in Spain for a boat under article 66.1 g) of the Special Tax Law. The vessel is to be let to third party residents and non-residents related to the owning company. Hence, the consultation is whether it means non-compliance with the requirements for such exemption."
The Spanish Tax Office replied:
"The combination of the established legal precepts imply that all the mandatory requirements mentioned on article 66.1 g) of Act 38/ 1998, must refer to individuals or entities that reside in Spain, or that are established within Spain, since the taxable event is only incurred whenever the circulation of use in Spain is made by the aforementioned individuals or entities.
Accordingly, the fact that the vessel is let to individuals or entities linked to the letting company, for as long as such individuals or entities are not residing in Spain nor own anyfacility in Spain, does not modify any of the circumstances that define the eligibility for exemption and thus, the tax is not applicable".
In the end, according to the Spanish Tax Office, a non resident owner or associate from the non-national or non-resident letting company can let the yacht without prejudice of the eligibility for exemption of the tax.
A non resident partner or director of the owner company can charter the yacht enjoying the matriculation tax exemption.
Yamandú Rodríguez Caorsi
Blas de Lezo Abogados
Sardenya, 229, 5º, 5ª
08013 - Barcelona
Tel: 0034 934192489
Fax: 0034 934193611
Móvil: 0034 615320452
IMPORTANT: This report is for informative propose. The author decline any responsibility of it use in real case without his personal verification and validation.