Charter Yachts News: Spanish Registration/Matriculation Tax (7 July 2013)

July 3rd, 2013. The Official Gazette of the Spanish Congress has published the bill, with reference number 121/000054, adopting measures regarding tax and environmental issues and adopting other tax and financial measures. The bill, to be processed through an urgent procedure, contains the modification of the current exemption foreseen in the Spanish Excise Duties Law (Law 38/1992) for vessels really and exclusively dedicated to the charter activity, eliminating the mention to the maximum length of 15 meters for these vessels.

As commented in my yesterday email below, the Spanish Government argues that this law amendment would help to get Spanish regulations closer to those in other EU countries and will strengthen Spanish yachting industry and will produce a revitalizing effect in other productive industries with the consequence of increasing the capacity to generate wealth and employment.

As a consequence of the above, since the moment this bill becomes approved by the Spanish Parliament, all charter vessels, whatever their length is, will be exempt from the matriculation tax, provided that the tax exemption is applied for through the corresponding tax forms and previous express acknowledgement of the tax benefit is obtained from the Spanish tax authorities.

The bill fully answers most of the questions raised in my email below as far as:

1) It makes clear that the implementation of the tax exemption will become technically true by just eliminating the maximum 15 meters length to benefit from the tax exemption, consequently expanding its applicability.

2) Conditions and requirements to benefit from the tax exemption will be the same of those applied to the lease of cars (basically to be actually and exclusively dedicated to the charter activity).

3) The tax exemption will not only be applicable to the first registration/matriculation of charter vessels in Spain but also to the “use or circulation in Spain of EU charter vessels” (also taxable event jointly with the first registration/matriculation in Spain). This is absolutely coherent and in line with the EU legislation and EU Single Market principles (freedom of establishment, freedom to provide services and free movement of goods, capital and services) and makes the tax exemption available to other EU member flagged vessels.

Based on logical precautionary measures (also applied in the lease of cars), the tax exemption will not be applicable when the owner transfers the use of the vessel (i.e. to a Company resident in Spain or abroad) and he or any related parties (in the terms defined in the Spanish VAT law) are the final users of the vessel, totally or partially. In addition, it will be considered that there is no leasing activity (charter) when vessels are leased to related persons ((in the terms defined in the Spanish VAT law) or for periods longer than three months to the same person/entity during the last consecutive months.

The tax bill will be entrusted to the Congress’ Tax and Public Administrations Commission and processed through an urgent proceeding, thus an amendments period will be opened until next July 12th, 2013 for the parliamentary groups to propose changes or oppose the bill. Although the general rule is for a law to enter into force within 20 days from its publication in the Estate Official Gazette (BOE), the bill foresees that, if it is finally approved, the law is to enter into force as from the following day of its publication in the BOE. I will keep you informed on the progress in the following weeks. (Note from Miguel Ángel Serra Guasch (Miguel.Angel.Serra@garrigues.com), GARRIGUES (www.garrigues.com)

 

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