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In this paper we analyze the cases in which yachts flagged in other countries operating in Spanish waters are subject to Special Tax on Certain Means of Transport, also known as Matriculation Tax.
Must be registered in Spain, pleasure yachts more than 8 meters in length, which are intended to be used by Spanish residents, whether natural or legal persons, or entities established in Spain, according with first additional provision of Law 38/1992, of 28 December, on Special Tax. The tax is 12% of the yacht value.
When the person or entity that uses the vessel is not resident or established in Spain, regardless of how long the boat is in Spanish waters, is no taxable. There is not obligation of paying the tax in this case.
Are residents in Spain individuals living more than 183 days in a year in the Spanish territory or those who have in Spain their centre of economic interest.
In case of legal persons, are residents those incorporated under Spanish law and those that have their management centre in Spain. Are entities established, the foreign companies who have a place of business in Spain.
Users are considered the persons or entities who can dispose of the yacht by any title.
2. What is the matriculation tax?
Ruled by law 38/1992, of 28 December, on Special Tax, are subject to the matriculation tax, among others, the following acts or events:
a) The first registration in Spain of yachts, new or second hand, with more than eight meters in length in the Registry of Ships, regular or special, or, in the registry of the relevant sports federation.
b) The circulation or use in Spain of means of transport (including yachts) by resindents, natural or legal person, when is not requested the registration in Spain within 30 days after the biginning of the yacht use in Spain.
The first additional provision of the law, order that are required to be registered in Spain pleasure crafts when intended to be used in the Spanish territory by persons or entities residents in Spain or those who are holders of commercial establishments.
The tax is 12% of yacht value.
Accordingly, we conclude that the registration tax is applies when:
a) The owner of the boat voluntarily applies for her registration in Spain.
b) The vessel is intended to be used in Spanish waters by a resident in Spain, whether natural or legal person, or a non-resident entity with a permanent establishment.
Use means the right to dispose of the boat by a natural person or legal entity.
3. Who are residents or established in Spain?
An individual is considered resident in Spain, when he comply one of the following circumstances:
a) Lives more than 183 days per year in the Spanish territory.
b) Has in Spain the core or the base of his activities or economic interests, directly or indirectly.
To complement the above, it is presumed that a person resides in Spain when:
a) Habitually resides in Spain a not legally separated spouse or children dependent on him.
b) Is occasionally absent, but does not establishs residence in another country.
As regards legal persons, entities or corporations, are considered resident in Spain if:
a) Its constitution has been performed according to Spanish law.
b) Has its head office in Spanish territory.
c) The place of effective management is in Spain.
With respect to "established in Spain", we must understand that means permanent establishment, a concept only applicable to business or legal persons. When entity has a fixed place of business in Spain through which performed on all or part of its activity is considered established.
4. Is it possible to avoid the payment of the matriculation tax?
In the event that the boat owner transfers his residence to Spain (wants to stay more than 183 days in Spain), can apply for the registration of the boat with matriculation tax exemption.
For this purpose, must comply with the following conditions:
a) The person concerned must have his habitual residence outside the Spanish territory for at least twelve consecutive months prior to transfer.
b) The vessel must be acquired or imported under normal tax conditions in the country of origin.
c) The vessel must have been used by the person concerned in his/her former residence at least six months before the date of residence change.
d) The registration and tax exemption must be requested within a maximum of 30 days since person is considered a resident or established in Spain.
e) The yacht exempt cannot be transmitted during the period of twelve months after registration.
It is important to know that with a new rule approved in 2011, a former resident of an E.U. country, only must comply the tax requirements, but is not necessary to change the flag to the Spanish one.
From the above, and considering the criteria used by Tax Administration and Courts of Justice, can be taken the following conclusions:
a) The law requires that yachts over 8 meters in length, used in Spanish waters by natural or legal resident or established in Spain, must be registered in Spain.
b) If a pleasure boat is used in Spanish waters by a non-resident or not established, either an individual or entity, there is no requirement to register in Spain or pay any tax.
c) Legally, there is no time limitation of staying in Spanish waters to a yacht flagged in an E.U. country. The fact that determines the obligation to pay the tax is the user status, resident or not resident.
d) A person who lives more than 183 days a year in a yacht mooring in Spain can be considered resident and be enforced to pay the tax.
e) The contracted crew of the vessel can be resident in Spain, since what determines the tax obligation is user's residence (which is not an employee)
f) Finally, it is important to note that when a non-resident (for example, a person who retires) moves to Spain, can claim for tax exemption. To qualify for the exemption is absolutely necessary to apply within 30 days after obtained residence in Spain and it is not necessary change the yacht flag.
We recommend our reports named "Purchase a yacth in Spain. Law and tax" and "Changes in matriculation tax 2011"
Yamandu R. Caorsi
Lawyer at Blas de Lezo Abogados
Yachting tax and legal consultant in Spain