Further information regarding Spanish interpretation of UCC
Miguel Ángel Serra Guasch looks at the caveats and nuances of the Union Customs Code in Spain…
In a recent article, SuperyachtNews spoke to Miguel Ángel Serra Guasch, Partner at Albors Galiano Portales, about an information note published by Spanish Customs note about the interpretative criteria relating to the entry and exit of yachts into and from the Union Customs Territory (UCT), as well as the use of the Temporary Admission (TA) scheme, under the Union Customs Code (UCC). With regards to the criteria set out in the aforementioned article, Serra sets out certain caveats and nuances that are worth noting in the below:
Entry and exit procedures
Under the UCC, Spain allows yachts to enter and exit the UCT under TA without the need to lodge any type of express declaration to Customs, with the act of crossing of the border (12 nautical miles from the coast) being sufficient. However, if the first point of entry to the UCT is Spain, and the yacht intends to visit other states belonging to the UCT, it would be convenient to check if this criterion still applies as, otherwise, the most prudent action would be to lodge in Spain the so-called ‘oral declaration’ (form 71-01), thereby avoiding any possible contingent liabilities for import VAT in these other states.
With regards to the criterion relating to the entry and exit of yachts with ‘Union good’ status that are registered with a flag not belonging to the UCT, the authorities consider that it is not applicable to those yachts that were formerly obliged to file a Single Administrative Document (SAD) form to benefit from the Returned Goods Relief (RGR) when exiting Spain under the now-repealed Community Customs Code (CCC). With this in mind, the authorities will not drop any ongoing administrative and court proceedings under this regulation and such proceedings have to continue until a decision or firm ruling is issued.
The fact that yachts registered with a flag not belonging to the UCT are not obliged to lodge any type of express declaration to Customs regarding TA (yachts without ‘Union good’ status) or RGR (yachts with ‘Union good’ status) means that the Spanish Customs authorities may question, in some cases, which scheme the yachts fall under upon their return to the UCT. The answer, here, seems obvious: these yachts will be subject to the same scheme that they were subject to when they left (TA or RGR), as long as they meet the requirements of each of these.
However, if a yacht with ‘Union good’ status which is registered with a flag not belonging to the UCT, which a priori left the UCT under the RGR and undertakes, on return, action which is incompatible with said scheme, such as undergoing a refit in the UCT subject to the Inward Processing Regime (IPR) (this is not permitted for yachts with ‘Union good’ status), then it would be demonstrating that it was not under the RGR anymore and that, in the best case scenario, it would be subject to TA, thereby being able to remain in the UCT for a maximum for period of 18 consecutive months.
Charter under TA
Commercial operation subject to TA must respect the criteria provided for in article 212.3 of Delegated Regulation (EU) 2015/2446 of the Commission, dated 28 July 2015, among which is the provision that the yacht’s user should be resident outside of the UCT. Therefore, such charter would only be possible as long as both the clients and their guests on board were all non-resident in the UCT. Likewise, it is stated that such operations may be carried out, “as long as the sectorial regulations allow them”. In light of conversations held with the General Directorate of the Merchant Marine, there does not seem to be any impediment in this respect. However, we should remember that in Spain yachts registered outside the UCT may only be chartered in the following territories:
· Balearic Islands: This possibility was the result of a meeting that I had, on behalf of ANEN, along with AEGY, with the Balearic Government on 25 July 2014, which gave rise to Circular 1/2014, of 26 August, allowing the chartering of these yachts, provided they are of a length over 14 metres. As of today, this circular is included in Decree 21/2017, of 5 May, by which the activity of chartering or yachts in the Balearic Islands is regulated.
· Barcelona: The possibility of operating commercially is limited only to those yachts registered with British Overseas Territories comprising the Red Ensign Group. Therefore, we have to pay close attention to the Brexit negotiations and any agreements that might be reached before the effective exit of the United Kingdom from the European Union, currently scheduled for 29 March 2019.
Lastly, let us remember that, in the case of the Crown Dependencies (Isle of Man, Jersey and Guernsey), while they also belong to the Red Ensign Group, they are territories that form part of the UCT. Therefore, the yachts that fly the flag of any of these territories may not in principle carry out charter activities under TA, as they do not meet the requirements of such customs scheme. Nevertheless, with regards to these situations, we have recently lodged a binding query to the General Directorate of Taxes which will without doubt clarify some relevant aspects. This information will be shared as soon as possible.
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