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                                                                                                                        July 2013

The Spanish Congress is in the process of making a significant change to the so called IEDMT (Registration Tax) making it possible to apply for tax exemption on superyacht charter in Spain.

A regular feature in this section is the Impuesto Especial sobre Determinados Medios de Transporte (IEDMT), known as the Impuesto de Matriculación, in other words registration tax. In effect a registration tax levied on any yacht over 8 metres in Spanish waters whether for the use of residents or commercial purposes when based in a Spanish port or marina.


The yachting sector has repeatedly denounced the negative effect of the registration tax as regards yacht sales, being12% of the value which, on top of the 20% VAT amounts to 33% tax on the purchase price. The so called Impuesto de Matriculación or Registration Tax exists solely in Spain, in other words, the purchase of a yacht is significantly more expensive in Spain than neighbouring countries. The tax applies equally to private yachts as those for commercial use, with the exception of yachts used exclusively for charter, up to 15 metres. The change to the regulation referred to in the heading of this article quite justly applies to the elimination of the 15 metre threshold which, as soon as the modification is passed, hopefully without delay, means the benefits of tax exemption will apply, regardless of size.

Perverse effects of the IEDMT

As we’ve already explained, the registration tax increases the purchase price of both private yachts and those purchased by companies for business use. To date, the benefit, by prior authorisation from the Tax Office, is restricted to yachts solely for the purpose of charter under 15 metres. We are given to understand the justification for this regulation, dating back to 1992, is based on the fact that any yacht above this size is considered to be a luxury and the benefit of any form of tax exemption is therefore unjustifiable. That is to say, any business wishing to purchase and charter a larger than average sized yacht or superyacht is duty bound to pay the IEDMT tax. As a consequence of all this coming across a yacht available for charter over 15 metres, on the Spanish market, is a difficult and complicated process. When the regulation was passed in 1992 yachts over 15 metres were relatively scarce but now, 20 years on, yachts of a much greater size are in abundance, whether for private or commercial use. It’s particularly relevant to draw attention to the significance of superyachts on a world wide scale, that is to say 24 metres or more. In other words, what was once a luxury for the favoured few is now more “affordable”.

Not only does the IEDMT discourage Spanish businesses from purchasing 15 metre yachts for the purpose of charter, a decidedly seasonal activity which requires a large investment, but, according to regulations, unless the tax is paid, also prohibits the charter of foreign yachts in Spain. As we’ve already pointed out, this tax is imposed regardless of passage when the yacht is chartered from a Spanish port or to a resident. That is to say, Spain has distanced itself from the superyacht charter circuit, established and motivated by countries such as France and Italy, now big business. Also irrational is the fact that a country associated with high class tourism should penalize the yachting market and any business by way of superyachts, especially since Spain has been developing its infrastructures along the entire coastline to welcome such yachts.

Purposes and consequences of the reform

The announced reform to Law 38/92, Special Tax, is intended to resolve a former petition made by charter companies and marinas to abolish the 15 metre threshold allowing charter yachts the benefit of tax exemption. Basically, once official, any yacht meeting the conditions established by the newly reformed law, in other words solely for charter, will be eligible for tax exemption. Of note, the law prohibits the use of exempt yachts for the purpose of business or activities not unlike charter, rental to persons associated with the owner, own use and contracts exceeding three months under the same charter. As regards the exemption, compliance with the above criteria applies rigorously.  
Assuming the conditions have been met, its important to stress the exemption does is not automatically applied but requires an application to the Tax Office. In the case of yacht owners intending to register yachts in Spain, an application for exemption must be made prior to that of the registration on the Spanish Boat Registry.

In the case of foreign registered yachts operating in Spain and/or chartered to residents in Spain, even though the yacht remains under a foreign flag, an application for registration tax exemption must be made prior to commencing business in Spanish waters. If the yacht is chartered in Spain before an application for tax exemption has been made and awarded by the Tax Office, the tax will be payable on demand. Applying for the tax exemption means the owner will have to register with the Spanish Tax Office, which also applies to the VAT office, as according to new rules this tax must be declared and deposited in Spain when the yacht is operating in Spanish waters. In addition to applying for Registration Tax exemption, foreign yachts operating in Spain will, in some cases, subject to Spanish Tax Office regulations, be obliged to make a declaration to the Maritime Authority taking full responsibility for the activity, take out the corresponding insurance and meet the requirements of a safety equipment inspection.

Unresolved issues

On the one hand we must applaud the new legislation but we’re also well aware of the shortfalls since the tax still applies to commercial boats involved in any form of business activity, other than charter that is, since the exemption applies solely to yachts used exclusively for the purpose of charter.  That is to say, any boat used for the purpose of business such as fishing trips, regattas, sailing schools or professional training courses, continue to be a victim of the registration tax.  

Hopefully the Government will, before long, extend the exemption to include activities such as these. Special attention must be paid as regards yachts rented for periods of time since the exemption applies exclusively to charter, in other words, when the owner, upon receipt of payment, hands the yacht over to the paying customer, leaving the yacht at their disposal.


Authors note: this article, based on law, presents a general and illustrative evaluation of the topic in question. The author disclaims responsibility for any consequences arising from the use of the content of this article in real cases, in the event of which you are advised to seek legal advice. 

Yamandú R. Caorsi

Lawyer specialiced in Maritime and Yachting Law

C. Serdenya, 229, 5ª, 5º – 08013- Barcelona

Tel 0034 934192489 Fax 0034 4193611

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