New exemption and reduced rates in registration tax for sailing charters
A new case of exemption from registration tax for charters and new reduced rates proportionate to the use made in Spain of the craft, are the measures introduced in the 2014 General State Budget Law (Law 22/13), which could bring flexibility to the sailing charter market in Spain by allowing private use by their owners of craft used for rental.
Madrid, January 30, 2014.- This is ANEN’s interpretation which, in conjunction with Miguel Angel Serra from law firm Garrigues Abogados, consider that with the addition of this new case of exemption and the establishment of rates proportionate to the use made in Spain, the law has “eliminated one of the greatest obstacles to conducting charter business in Spain. Namely the requirement for the craft itself to be actually and only used for rental activities, laid down to be able to benefit from the familiar exemption for sailing charters (article 66.1.g) in Law 38/1992, on Special Taxes), driven by the ANEN (Spanish Marine Trade Association) and AEGY (Spanish Yachting Association) and AENB (Balearic Island Marine Trade Association).
According to their analysis of the new measures, included in the General State Budget Law, effective since January 1, 2014:
(i) Craft registered in an EU Member State (other than Spain) which are rented in Spain by chartering companies, business owners who are individuals or the end clients –all of whom must necessarily be resident in Spain– from suppliers (craft owners) from another Member State (other than Spain, or even than the state where the craft is registered) for a period shorter than 3 months, will be exempt from registration tax.
(ii) Under the same structure as that specified for the application of the new exemption case, after the first three months of use of the craft in Spain, the registration tax will apply proportionally to the use that is made of the craft in Spain. Thus, reduced registration tax rates will be applicable.
Accordingly, private use of the craft by its owner in Spain or in any other state would be allowed, but not in the term it is rented out.
The need to make this amendment to add to the cases of exemption from registration tax which came into force on October 30, 2013 had already been broached at the Nautical Charter Forum organized by ANEN and held at the Barcelona Boat Show (Salón Náutico de Barcelona) last September.
Moreover, the measures introduced in the LPGE are clearly in response to the amendment of Spanish law required by the European Commission, which on October 27, 2011 initiated infringement proceedings on Spain, requiring it to amend the law governing the registration tax to bring it into line with the principle of proportionality and announcing that, if it failed to do so, the case would be referred to the Court of Justice of the European Union.
ANEN will shortly hold a meeting with the Directorate-General of Taxes for the tax authorities to clarify and confirm the above interpretation of this new case of exemption from registration tax for charters.
