HEADLINE (April, 2016)
BOAT CHARTER UNDER STUDY
INTRO
The details for the last few years indicate that, since the positive change in registration tax in 2013, charter activity in the Balearic Islands has grown considerably, which is something that could be seen most importantly last year.
TEXT
Thanks to the results of the latest report from the Spanish Large Yachts Association (AEGY), we know that the number of boats licensed for charter in the Balearic Islands has increased by 516% over the past few years. It is a figure to be taken into account by everyone making it possible for these islands to continue being the most desirable among those who decide to charter or charter out a boat, as the image of this sector of the boating business has a great effect on the quality of the tourism we receive.
In fact, though, even more can be done. This change in legislation is very positive for the market and for the economy of the islands in general, but there is still much to improve and proof of this is the fact that, of the more than 600 yachts over 24 metres long available for charter in the Mediterranean, only about one hundred are registered for charter in Spain this season.
It’s true that the legal procedures for chartering a boat in the islands is now easier, but there are problems with the information and above all the documents to be presented that complicate the procedures for registering a boat for this growing type of business.
Because of this, our interview with León Von Ondarza, a well-known lawyer specialising in the maritime law of the Balearic Islands, attempts to clear up all the most common queries arising due to these difficulties in the legal procedures for preparing a boat for charter.
When registering a yacht in Spain, on which list can/should it be registered?
If the yacht is going to be used for non-profit leisure sailing it must be registered in list 7. If on the other hand the aim is commercial exploitation (charter) it must be registered on list 6. There is a third possibility for registering a yacht in Spain, which is what is known as tourist registration.
Can a Spanish resident register a yacht under the flag of a different country?
Yes, a Spanish resident can register a yacht under the flag of a different country and use it in Spanish waters provided he pays the yacht registration tax.
If a yacht is registered under the flag of a country outside Spain, can a Spanish citizen sail it in Spanish waters?
Yes, provided the Spanish citizen is not resident in Spain for tax purposes and does not own an establishment in Spain, he can. If he is a resident for tax purposes or owner of an establishment in Spain, he must pay the registration tax, as in this case sailing in Spanish waters in a boat with a foreign flag is impossible under the law governing the registration tax.
Does a yacht registered on list six have to pay the registration tax?
No, any yacht, regardless of its length, is exempt from paying the tax and can therefore benefit from the tax exemption. However, this exemption requires compliance with the law; in other words, the yacht must actually and exclusively be used for charter during the four years following the registration date and may not be used by the owner or people associated with him. It may also not be chartered to the same person or organisation for more than three months in a period of twelve consecutive months.
Does a yacht registered on list seven have to pay the registration tax?
Yes, as a yacht by definition is more than eight metres in length and is therefore subject to payment of it, in accordance with Act 38/1992 governing this tax.
Does a yacht for commercial use from another EU country which someone wants to charter in Spain have to pay the registration tax?
No, like a yacht under the Spanish flag it can benefit from tax exemption without the need to be registered in Spain if it is actually and exclusively used for charter, complying with the limits established in Act 38/1992.
Does a yacht for commercial use from a country not belonging to the EU have to pay the registration tax to be chartered in Spain?
In these cases, the yacht will have to regularise the VAT position and be subject to the conditions established by the Directorate General of the Merchant Marine. In relation to the registration tax, it is subject to the same conditions as a boat under the Spanish flag.
Does a yacht for commercial use from an EU country have to get a charter licence so it can be chartered in Spain?
Yes, under the same conditions as a yacht under the Spanish flag. If chartered in the Balearic Islands, the yacht must have authorisation from the Balearic Islands Government Directorate of Ports and Airports and permission or authorisation to sail issued by the Maritime Authority.
Does a yacht for commercial use from a non-EU country have to get a charter licence so it can be chartered in Spain?
Yes, the same as for a boat with a Community flag.
Can a commercial yacht buy subsidised diesel?
No, because sailing by a charter yacht is considered to be leisure sailing: in other words, it is different from transporting passengers or goods.
Can non-Spanish crew be hired on a Spanish yacht?
Yes, except for posts that involve performing public functions. They must have professional qualifications proving their knowledge and skills.
Can a yacht with a non-Spanish/non-EU flag have a Spanish crew?
Yes. The owner or his agent or representative must take out commercial insurance providing compensation in similar sums to the Spanish social security system for cases of death, incapacity due to accident and repatriation.
Can a non-European yacht be repaired and obtain supplies in Spain without paying VAT?
Yes, you can get repairs and supplies without paying VAT provided you process and obtain the correct import/export document from Customs.
How long can a non-EU yacht remain in EU waters? Under what conditions?
Any yacht entered in a register in a non-EU country may remain in EU waters for 18 months. This period is counted from the first day when the yacht arrives in EU waters, which is its first day in an EU port. The yacht may not be used by residents of the EU Customs territory.
BOX WITH LEON PHOTO
León von Ondarza Fuster is a lawyer specialising in Maritime Law, qualified at the European Institute of Maritime Studies. Since 1994 he has been working as a law professional at his own firm in Palma – Ondarza Abogados.
He has been secretary of the Spanish Large Yachts Association (AEGY) since it was set up in 2006 and is a member of the Management Board of Balearic Island Ports representing the Balearic Island Association of Marina Facilities since 2015.
He has written many articles related to leisure boating and he is closely associated with sailing in our Autonomous Community.
BREAK-OUTS
Of the more than 600 yachts more than 24 metres long available for charter in the Mediterranean, only about one hundred are registered for charter in Spain this season.