The Balearic Director General of Ports and Airports, Sr Antonio Deudero, addressed a large group of yacht brokers, management company representatives and yacht captains, on the subject of the latest modifications to the rules governing commercial activity of Non EU flagged charter yachts in the Balearic Island
, and also explained the different areas of control of the local government and the national government.
Non EU flagged vessels are now able to apply for a charter license, and carry out charter in the Balearic Islands, on the condition that there is no similar EU flagged yacht available. Many questions were asked about how this would be determined, and also would this mean that the charter licenses would subsequently be issued on the basis of a single charter, and require to be renewed for the next charter.
Sr. Deudero was completely clear that the local administration currently have no specific plans to police the matter, and will be issuing ANNUALLY renewable charter licenses to non EU flagged yachts, and will accept a good faith declaration from the charter broker, or other appointed representative, that no other acceptable vessel is currently available, meeting the requirements of the charter client.
The hottest topic under discussion was regarding the recent activity of Palma customs officials, and their interpretation of the VAT status of non EU flagged vessels.
To summarize this briefly, Palma Customs officials are taking the view that Non EU flagged vessels, which have accounted for VAT within EU VAT Territory, but subsequently travel outside of the EU, upon returning to EU VAT territory must once again account for the VAT. This interpretation of the law is not consistent with the view held by other customs authorities in other EU States, and even within Spanish national territory. However, direct intervention is required from the national government to clarify the interpretation of the law and instruct the customs officials accordingly.
Sr Deudero explained that the customs still receive instructions from Madrid, as this area of administration has not been devolved to the local administration. As a result, he personally is not able to dictate to customs how they go about their business, but he is aware of the concerns arising in the local nautical sector. The matter has now been brought to the attention of the national government via the efforts of nautical sector business associations AENIB, AEGY and ANEN.
In the meantime, Network Marine Consultants are urging all managers, owners and masters of non EU flagged vessels to contact us for clarification of their VAT status before committing to enter Spain through the Balearic Islands, particularly after passing through Gibraltar.