Charter superyachts registered to the Canary Islands are no longer required to pay matriculation tax, which is set at 12 per cent of the value of the vessel. Yachts registered in the Canary Islands are listed in the Registro Especial de Buques Canario (REBECA). Charter superyachts on this register now have the same status as any other commercial vessel. Up to now, the tax has been one of the most significant barriers to growth in the Spanish yachting industry. DirecciOn General de la Marina Mercante (DGMM) published a note in February of this year confirming the status of charter yachts as commercial vessels. Alex Chumillas, of Barcelona Tax and Law, clarified the situation: "In theory, the option of registering a superyacht in the REBECA was available since the day the register was created. However, everybody assumed this was not a possibility, because this register was basically created for merchant ships. Indeed, no legislation changes have happened, it is just a matter of interpretation of the law."

The REBECA register is comparable to the offshore registers kept by many European countries, and was originally created to give tax breaks to the Spanish merchant fleet. To be eligible, the vessel must be 100gt or more, which roughly equates to yachts of 24m and above. To register a yacht in the REBECA, a charter company must be headquartered in the Canary Islands, or it must have a permanent establishment or some form of legal representation there. There is no limit to the number of yachts that can be listed in the REBECA register.

The re-classification of charter yachts on the REBECA register has not been extended to charter vessels and private yachts registered in mainland Spain. (Among the nuances of existing Spanish tax law, charter vessels registered elsewhere in the EU do not have to pay the matriculation tax unless they are carrying a Spanish tax resident.)

A luxury tax has existed in Spain in one form or another for many decades, and Socialist fiscal policies are hotly debated within Spanish politics. The Asociacion Espanola de  Grandes Yates (AEGY) and other actors within the industry have lobbied the national government to reform the tax system for many years. It is estimated that Spanish tax legislation costs areas such as the Balearics up to 10 million euro a week in lost nautical tourism during peak season.

The fact that Spain is run by a Socialist government makes reform seem unlikely, but it must be emphasised that successive conservative governments have also maintained this taxation system. Diego Colon, President of the AEGY, explained the situation: "There is no `politically correct' course of action, lifting the tax would have a penalty in votes. Reducing taxes to rich people could be used as a demagogic weapon against any government." What is so encouraging about this ruling is the clear discrimination between yachts registered in the REBECA and charter yachts registered in mainland Spain and the EU. This gives industry pressure groups a solid legal basis upon which to challenge the DGMM to extend the ruling to classify all charter yachts as commercial vessels.

The new ruling is a positive sign for the Spanish yachting industry, but there remains one legal conundrum inhibiting growth. Charter yachts must obtain a charter authorisation issued by the relevant regional authority, and certain regions will only issue this to yachts in the common yacht register or to EU flagged vessels.

A REBECA charter yacht, for example, could cruise the waters of Catalonia, but would still be excluded from Valencia or the Balearics. However, the situation is currently being reviewed by the Spanish maritime authorities and may be resolved in as little as two months. If so, REBECA registered yachts will then be able to charter anywhere in Spain.

Tess De La Mare
Additional contribution from Alex Chumillas of Barcelona Tax & Law


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