Can You Use Your Charter Yacht for Private Use?
If you have your boat affected to charter activity – no matter if Spanish or foreign flag – and you have recorded the economic activity to the Spanish Tax Authorities, got your Spanish Fiscal Nr, also the pertinent charter license from the Govern Balear and Despacho from the Capitanía Marítima ; and besides that, what is absolutely determinant, you have received from the same Spanish Tax Authorities the “ACUERDO DE LA CONCESION DE LA SOLICTUD DE EXENCION DEL IEDMT”, that is the so called Matriculation Tax Exemption because of the charter activity, the question that always arises is: can we use the vessel – even partially – for our own private use?
Resolution 15.10.2020
The immediate answer was in the past clearly, no… until last year Resolution from 15.10.2020 issued by the Dirección General de la Marina Mercante, DGMM (Merchant Shipping General Direction). This Resolution expressly admits the sporadic private use by the owner or shareholders of the owning company resident or established in Spain without losing the benefit of the Mat Tax exemption for charter vessel.
The situation before this resolution, regulated by art. 65 1, b) de la Ley 38/1992, de 28 de diciembre de Impuestos Especiales (Special Taxes Act 38/1992), was that that the exemption could only be granted to vessels affected “exclusively” to charter, rental or hire under the following circumstances:
- Bona fide charter, that is for a period of less than three months to same person
- To individuals or companies not related parties with owner
- No use for pleasure purposes by the owner, spouse and children
In other words, in the past only private use by the owner was admitted in specific circumstances such as sailing for maintenance, guardinage or repair works purposes and sea trials, or deliveries in order to bring the vessel to a new marina to pick up charter guests.
In these cases could the owner sail his own charter vessel without triggering the Mat Tax. Now after this DGMM Resolution this “exclusively” affection to charter activity has been softened by the Maritime Authorities and the sporadic use by the owner should be permitted.
Grey Areas
However there still grey areas such as the extension and exact meaning of the words “exclusively” and “sporadic” – and its obvious contradiction.
We will need to wait and see how this Resolution – bearing in mind that it is with lower rank than the Law 38/1992 – is accepted and applied by the Tax Authorities.
Then, from the tax point of view challenging the exclusive commercial use means removing the matriculation tax exemption and the nightmare of the vessel seized for 12% of the real value plus sanctions, penalties and interests on arrears or granting a bank guarantee extended in case of claiming.
Carlos Espinosa
Solicitor and Tax Advisor
+34 627 413 201
carlos.espinosa@iurisnautic.com
iurisnautic.com
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