Spanish matriculation tax debate resurfaces
The debate over the 12 per cent matriculation tax that has afflicted the yachting industry in Spain has resurfaced. Although the Canary Islands' register had deemed yachts exempt from the charge, national tax authorities are continuing with its imposition. …
In March 2011 The Superyacht Report reported the announcement from the Direccion General de Marina Mercante, the Spanish Merchant Marine, that all yachts listed on the Canary Islands’ Registero Especial de Buques Canario REBECA registry could feasibly be exempt from Spain’s Matriculation Tax.
The Matriculation Tax, set at 12 per cent of the value of a yacht, has been cited as a limiting factor in the growth of the Spanish charter market. The ruling, or more accurately, the reinterpretation of the law’s application to the REBECA Register, brought hope to Spanish yacht owners because it stated that yachts used for charter purposes could be considered as commercial vessels, and therefore exempt from the tax. Theoretically, these vessels could then cruise in the waters of the Spanish mainland and give the charter market a new lease of life.
Six months on, The Canary Islands’ registry maintains that charter superyachts are exempt from the tax, and that it requires no proof of matriculation tax payment. However, the national Spanish tax authorities have continued to enforce the tax, even in circumstances when the yacht in question is registered with REBECA. This retrenchment on the part of the mainland has nullified any tax breaks that REBECA-registered owners believed they were in line for and caused consternation amongst owners and managers alike.
The problem remains the clash of ideas between the marine and the tax authorities. The former believes that it is fair to class a superyacht as a ‘ship’ if it is working as a commercial charter vessel and being taxed on its earnings accordingly. The tax authorities consider a superyacht to be a ‘leisure boat’, regardless of its commercial activity. As a result of this internal conflict the Matriculation Tax debate has resurfaced.
A REBECA-registered superyacht is currently the subject of a tax inspection but cannot yet be named, as the inspection is ongoing. A number of Spanish tax experts believe that the decision taken by the authorities in this case will set a precedent for future rulings on the issue.
The Spanish government will hold a general election in November, with centre-right party, Partido Popular the favourites to take power. The party has indicated that it is willing to discuss amending the tax if it is voted into power, but has not categorically stated that this is a priority.
Meanwhile, developers have made significant investments into Spain’s coastal infrastructure, with a number of high-end superyacht facilities being built in the last decade - Vilanova Grand Marina and Alcaidesa to name two - as well as the extensions at Port Adriano and Marina Ibiza.
Alex Chumillas, of Barcelona Tax and Law said: “I think we should differentiate between removing the tax for private and commercially operated yachts - that is the key issue. I accept that Spanish nationals must pay the Matriculation Tax on private yachts. It is not completely fair because the rest of Europe doesn’t have it but it is not dramatic, although it could be reduced especially for sailing boats compared to motoryachts.
“What is really absurd is applying the aforementioned tax to commercial yachts. The tax discussion should be focused on something similar to what happens in the rest of Europe with VAT. If Matriculation Tax was removed for Spanish and foreign commercial yachts interested in operating in Spanish waters, or at least replaced by some type of reasonable tax based on the time the yacht is operating in Spanish waters, then that would generate an increase in activity.”
Oscar Siches, of the Balearics Nautical Industry Association, said that an official complaint was presented by the Partido Popular’s EUMP Rosa Estaras to the European Parliament, demanding the freedom of enterprise for yacht charters. This has been accepted and is pending review.
In the Balearics, which saw a 25 per cent fall in superyacht traffic year-on-year between 2010 and 2011, the Partido Popular was elected to government in June, and has already begun to review nautical policy and legislation. Siches expects a similar outcome if the national elections come to fruition in November:
“It is important that the government learns how to work with the nautical industry on common strategies instead of keeping pathetically fortified in their ancestral feuds. Spain is technically broke and any means of raising cash is needed, welcome and should be given precedence."
Total of superyachts chartered in the Med 788
Total potential income generated in the Med/week (high season) €51.8 M
Total of potential income generated in the Med/week (low season) €44.3 M
Potential income generated by charter of boats allowed to charter in Spain (high season) €0.77 M
Potential income generated by charter of boats allowed to charter in Spain (low season) €0.69 M
Estimated figures, courtesy of MYBA
Related Links
Direccion General de Marina Mercante Website
Registero Especial de Buques Canario Website
Barcelona Tax and Law Website
MYBA Profile | MYBA Website
The Matriculation Tax, set at 12 per cent of the value of a yacht, has been cited as a limiting factor in the growth of the Spanish charter market. The ruling, or more accurately, the reinterpretation of the law’s application to the REBECA Register, brought hope to Spanish yacht owners because it stated that yachts used for charter purposes could be considered as commercial vessels, and therefore exempt from the tax. Theoretically, these vessels could then cruise in the waters of the Spanish mainland and give the charter market a new lease of life.
Six months on, The Canary Islands’ registry maintains that charter superyachts are exempt from the tax, and that it requires no proof of matriculation tax payment. However, the national Spanish tax authorities have continued to enforce the tax, even in circumstances when the yacht in question is registered with REBECA. This retrenchment on the part of the mainland has nullified any tax breaks that REBECA-registered owners believed they were in line for and caused consternation amongst owners and managers alike.
The problem remains the clash of ideas between the marine and the tax authorities. The former believes that it is fair to class a superyacht as a ‘ship’ if it is working as a commercial charter vessel and being taxed on its earnings accordingly. The tax authorities consider a superyacht to be a ‘leisure boat’, regardless of its commercial activity. As a result of this internal conflict the Matriculation Tax debate has resurfaced.
A REBECA-registered superyacht is currently the subject of a tax inspection but cannot yet be named, as the inspection is ongoing. A number of Spanish tax experts believe that the decision taken by the authorities in this case will set a precedent for future rulings on the issue.
The Spanish government will hold a general election in November, with centre-right party, Partido Popular the favourites to take power. The party has indicated that it is willing to discuss amending the tax if it is voted into power, but has not categorically stated that this is a priority.
Meanwhile, developers have made significant investments into Spain’s coastal infrastructure, with a number of high-end superyacht facilities being built in the last decade - Vilanova Grand Marina and Alcaidesa to name two - as well as the extensions at Port Adriano and Marina Ibiza.
Alex Chumillas, of Barcelona Tax and Law said: “I think we should differentiate between removing the tax for private and commercially operated yachts - that is the key issue. I accept that Spanish nationals must pay the Matriculation Tax on private yachts. It is not completely fair because the rest of Europe doesn’t have it but it is not dramatic, although it could be reduced especially for sailing boats compared to motoryachts.
“What is really absurd is applying the aforementioned tax to commercial yachts. The tax discussion should be focused on something similar to what happens in the rest of Europe with VAT. If Matriculation Tax was removed for Spanish and foreign commercial yachts interested in operating in Spanish waters, or at least replaced by some type of reasonable tax based on the time the yacht is operating in Spanish waters, then that would generate an increase in activity.”
Oscar Siches, of the Balearics Nautical Industry Association, said that an official complaint was presented by the Partido Popular’s EUMP Rosa Estaras to the European Parliament, demanding the freedom of enterprise for yacht charters. This has been accepted and is pending review.
In the Balearics, which saw a 25 per cent fall in superyacht traffic year-on-year between 2010 and 2011, the Partido Popular was elected to government in June, and has already begun to review nautical policy and legislation. Siches expects a similar outcome if the national elections come to fruition in November:
“It is important that the government learns how to work with the nautical industry on common strategies instead of keeping pathetically fortified in their ancestral feuds. Spain is technically broke and any means of raising cash is needed, welcome and should be given precedence."
Total of superyachts chartered in the Med 788
Total potential income generated in the Med/week (high season) €51.8 M
Total of potential income generated in the Med/week (low season) €44.3 M
Potential income generated by charter of boats allowed to charter in Spain (high season) €0.77 M
Potential income generated by charter of boats allowed to charter in Spain (low season) €0.69 M
Estimated figures, courtesy of MYBA
The rejuvenated Marina Ibiza facility.
Related Links
Direccion General de Marina Mercante Website
Registero Especial de Buques Canario Website
Barcelona Tax and Law Website
MYBA Profile | MYBA Website
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