Owning a superyacht can be an exclusive and rewarding experience, but it also comes with financial responsibilities, including taxes More
Tax Marine Spain create informal group discussion with tax experts from different jurisdictions to explore EU VAT regulations More
Barcelona's next challenge in terms of its global projection in terms of organising major events already has a name and a date: The American sailing yacht cup 2024 In the preparation of the candidature, which has yet to be made official, the Barcelona Global association has been directly involved, which is in charge of involving the private sector in this adventure which, among other things, requires significant funding from the public institutions. The Spanish government is n... More
Non Spanish entities chartering might be taxable in Spain on the charter income obtained in Spain. The potential taxation will depend on whether the non-resident entity has a permanent establishment in Spain or not.? ?In the event the entity had a permanent establishment in Spain, the income obtained in Spain would be taxable at 25% tax rate as Spanish companies. The tax rate would be applicable to the chartering activity net profit, determined as a difference of income and expenses related ... More
Inward processing customs arrangement (TPA in Spanish) allows non-EU goods imported within the EU to be processed for re-export without a requirement to pay customs duty and VAT on the goods being used. This custom mechanism is extremely used in the yachting industry allowing non-european vessels to benefit from VAT savings on repairs during their stay in Spanish shipyards. Traditionally the discharge of this arrangement required that vessels after conclusion of the maintenance works were f... More
We consider that there are at least four key points that Spanish tax authorities have the capacity to address and that would allow a vigorous boost to the superyacht industry in Spain. 1. Matriculation Tax In 2013, an amendment of the Spanish Excise Duty Law, made available to commercial yachts, regardless of their length, an exemption from the Spanish matriculation tax. However, the legal provision establishing this tax benefit stipulates that it won't be possible to hire the yacht to a re... More
The TA regime is laid down in Articles 250 to 253 of the UCC. For the specific case of means of transport (yachts), the conditions to be fulfilled for granting total relief from import duty are established in Article 212 of the Commission Delegated Regulation (EU) 2015/2446 of 28 July 2015 Delegated Regulation (EU) No 952/2013 (“The DR”): “(a) they are registered outside the customs territory of the Union in the name of a person established outside that territory or ,where the means of trans... More
Commercial yachts intending to charter in Spain must be in free in circulation, which means that VAT should have been paid or accounted for. Since Brexit, British-flagged yachts have been subject to some sort of uncertainty about their customs status and how that would affect their commercial operations in the EU. A consequence of the Brexit process, therefore, is that yachts must now be considered as either imported into the UK or into the rest of the EU27 Member States, but are no longer c... More
VAT must be paid on any yacht sailing EU waters unless it falls under the temporary import relief. The rules are not prescriptive about the basis for VAT except that it should represent the market value, but if you have bought it recently the price you paid could be used as a base value. Although the Spanish VAT rate (21%) is not one of the lowest in the EU, Spanish VAT on yachts can be reduced using a formula based on a "book" value that takes depreciation into account. Spanish Customs Inst... More
On the 10th February 2021 the Spanish Merchant Marine Directorate, as a result of the effects of Brexit, published an internal instruction establishing that UK RYA qualifications certificates were no longer acceptable for use on Spanish-flagged rental yachts. The publication of that instruction immediately caused great concern among the charter industry all across Spain due to the significant negative impact of such a decision, which could represent a 15% of business turned down. Fortunatel... More
Latest fiscal amendments with impact in the superyacht chartering season 2021 in the Mediterranean: The below is a summary of the most relevant fiscal amendments with effect on the superyacht chartering activity in the Mediterranean which were discussed by representatives of different jurisdictions in the roundtable organized by Quaynote Thursday 18th in the course of “The future of Superyachts, Business Jets and Luxury Property Online Conference” France: The new situation for summ... More
The Yacht Engaged in Trade (YET) Scheme is a mechanism adopted by some flag states whereby private yachts obtain a Compliance Certificate and a Temporary Certificate of Registry authorizing the yacht to charter for up to a certain number of days per calendar year in EU waters. The scheme applies to registered private yachts of 24m or over, provided that they fully comply with the requirements for commercial yachts of the relevant Large Yacht Codes (LYC), as well as all other applicable natio... More
From a tax standpoint, charter yachts are considered a hiring of Means of Transport, which is a service for VAT purposes. The VAT treatment depends on a number of factors including the period of time for which the Means of Transport is hired, the VAT status and location of the customer, and -in certain cases- where the Means of Transport will be used and enjoyed. Under the VAT place of supply regulations laid down in the EU VAT Directive 2008/8/EC, the place of supply of short-term hirin... More
As is well known, chartering in countries like France, Italy or Malta can benefit from really reduced VAT rates on charter fees. This is not the case in Spain. What is the reason why? Let's find out what are the legal grounds on which this VAT reduction is based and what other implications this legal provision has. Article 58 of EU Council Directive 2006/112/EC, VAT Directive, entitled "criterion of effective use and enjoyment", provides that: In order to avoid double taxation, non-taxation... More
After Spain joined the European Union in 1985, VAT became applicable on the supply of means of transport at a luxury rate of 33% tax. This luxury rate was reduced to 28% in 1992. The same year 1992 after the VAT harmonization that capped the standard Spanish VAT rate was to 15%, Spanish authorities in order not to lose revenue implemented a new tax, the IEDMT. The new tax provisions were included in the Spanish Excise Duty Law 38/1992, of 28 December, of Special Taxes. The combination of the ... More
It is well known among yacht professionals and especially those involved in superyacht chartering that the VAT regime in Spain has been always particularly tough. Spain, unlike other surrounding countries, as France or Italy, did not implement in National legislation the possibility of a lower effective taxation for charters starting in Spain and cruising into international waters, on the basis of the Use and Enjoyment principle laid down in the EU VAT Directive, resulting that charters start... More
If you are thinking about moving your residence to Spain, you must be aware that you may be exempt from paying duties and taxes when importing your personal belongings, and owned yachts can be included among those belongings. Due to the particularities of the Spanish fiscal system, both EU and non-EU citizens moving to Spain might be eligible for these tax benefits. Personal property belonging to persons transferring their usual place of residence from a non- European country to Spain is... More
It is well known in the yachting industry that there is the possibility to benefit from an attractive VAT exemption regime, in place either in France or Italy, on certain yacht supplies and works. These are the so-called French and Italian Commercial Exemption (FCE ICE) tax regimes. The requirements to be eligible for VAT exemptions are set out respectively in Article 262 II 2nd, 5th and 6th of the French General Tax Code and in Article 8-bis, letter a) and letter d) of Presidential Decree ... More
The applicability of VAT on APA funds and delivery fees is a controversial issue, as different jurisdictions have different approaches to the situation. We will try to provide here our view on the correct tax treatment in accordance with Spanish tax regulations. We must remark that there is no binding ruling issued by the Spanish tax authorities about this subject. Therefore the opinion given here is our firm’s view based on existing legislation and similar cases not strictly related to ... More
In the 19th Century the Spanish government made the Canary Islands a free trade zone to promote economic development. When Spain joined the EU in 1986, special fiscal measures were deemed incompatible with European legislation. For this reason the Canary Islands’ Parliament decided to stay out of the European VAT area. Similarly, Ceuta and Melilla do not have VAT but the Production, Services and Import tax (IPSI).Ceuta and Melilla are not part of the customs territory of the EU and have tw... More
