Finally, some welcome clarification
Following pressure from the ascoiación nacional de empresas nåuticas, the Spanish Directorate-General of Taxes has issued concrete clarification about the terms under which non-Spanish residents can operate commercially. The parameters have been welcomed by the industry.…
The ascoiación nacional de empresas nåuticas (anen) has received a positive response from Spanish legislators in relation to questions posed about the rights of beneficial owners to use their superyachts while still qualifying for matriculation tax exemption.
Upon receiving a response, anen issued the following statement:
Both the beneficial owner of a yacht and the persons related to that owner can use the yacht while taking the exemption provided [that the yacht is] actually and exclusively used for sailing charter activities (art. 66.1.g) of Law 38/1992, on Special Taxes): (i) in all cases, where the yacht is used outside Spanish territorial waters, because the legislation on special taxes may only be construed to apply within the territorial scope of that tax, which is Spain, and, (ii) in Spanish territorial waters, provided the beneficial owner or the persons related to the beneficial owner are not resident in Spain and do not have an “establishment” situated in Spain.
This news follows confirmation from the Spanish Directorate-General of Taxes (DGT) that, ‘the taxable event for the matriculation tax is the registration in Spain or sailing and use in Spain, of a yacht by persons or entities resident in Spain or owners of establishments situated in Spain. As a result, the sailing and use of a yacht outside Spain will not trigger the taxable event and therefore the tax will not be chargeable.’
And with regards the use of the yacht in Spanish waters by owners who are not resident in Spain, DGT ruled that, ‘the fact that the yacht is licensed to be chartered to persons or entities related to the charterer, where those persons or entities are not resident in Spain and do not own establishments situated in Spain, does not change the circumstances determining the requirements for exemption and therefore, does not trigger the tax.”
Commenting on this decision, Tax Marine’s Alex Chumillas said:
“This interpretation is a radical change compared with the previous situation, which did not allow a single use of the yacht by a related person or entity to the owning company. In those cases, where the related party is resident in Spain the limitation still applies. We do understand that to structure this use by the beneficial owner, there should be a charter agreement in place, and the charter fee should be agreed at arm’s length and VAT applied.”
The English translation of the official ruling, which has been provided by Tax Marine, is available to view here.
Upon receiving a response, anen issued the following statement:
Both the beneficial owner of a yacht and the persons related to that owner can use the yacht while taking the exemption provided [that the yacht is] actually and exclusively used for sailing charter activities (art. 66.1.g) of Law 38/1992, on Special Taxes): (i) in all cases, where the yacht is used outside Spanish territorial waters, because the legislation on special taxes may only be construed to apply within the territorial scope of that tax, which is Spain, and, (ii) in Spanish territorial waters, provided the beneficial owner or the persons related to the beneficial owner are not resident in Spain and do not have an “establishment” situated in Spain.
This news follows confirmation from the Spanish Directorate-General of Taxes (DGT) that, ‘the taxable event for the matriculation tax is the registration in Spain or sailing and use in Spain, of a yacht by persons or entities resident in Spain or owners of establishments situated in Spain. As a result, the sailing and use of a yacht outside Spain will not trigger the taxable event and therefore the tax will not be chargeable.’
And with regards the use of the yacht in Spanish waters by owners who are not resident in Spain, DGT ruled that, ‘the fact that the yacht is licensed to be chartered to persons or entities related to the charterer, where those persons or entities are not resident in Spain and do not own establishments situated in Spain, does not change the circumstances determining the requirements for exemption and therefore, does not trigger the tax.”
A flow diagram depicting requirements for commercial operation in the Balearic Islands, courtesy of Network Marine Consultants.
According to Garrigues Abogadso’ Miguel Angel Serra, who played an instrumental role in pursuing the clarification, this bining ruling has “definitely opened, once and for all, the doors to sailing charters in Spain” and will allow superyachts to be chartered by owners who are not Spanish residents.Commenting on this decision, Tax Marine’s Alex Chumillas said:
“This interpretation is a radical change compared with the previous situation, which did not allow a single use of the yacht by a related person or entity to the owning company. In those cases, where the related party is resident in Spain the limitation still applies. We do understand that to structure this use by the beneficial owner, there should be a charter agreement in place, and the charter fee should be agreed at arm’s length and VAT applied.”
The English translation of the official ruling, which has been provided by Tax Marine, is available to view here.
Image courtesy of GW - YachtPhotography.net.
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