Edited by Stewart Campbell
Adios matriculation tax! - Charter boats to be exempted from crippling 12% tax
Spain has taken a huge step forward in boosting its depressed boating market by announcing that charter boats in the country are to be exempted from the highly damaging matriculation tax.
The 12% levy is applied to the sale of private boats over 8m to Spanish residents and on first registration of charter boats over 15m, which coupled with a VAT rate of 21% can sometimes lead to a tax burden of 33%.
The effect of this has been to push foreign boaters, many of whom charter their craft to help with running costs, out of Spain in favour of other Med countries. There was no indication the tax would be removed from the purchase of private boats, but it's the charter boat exemption that will have the biggest impact on British boaters.
Alex Chumillas Amat, director of Tax Marine in Barcelona, told MBYthe tax exemption will make Spain immediately more attractive to big-spending charter boats and have "a huge impact on the Spanish yachting sector".
He went one further, claiming the decision was "probably the most important news in the Spanish yachting industry in the last 20 years since the matriculation tax was introduced in the Spanish tax system in 1992':The announcement was buried in the small print of a tax package introduced by Spain's Council of Ministers in late June, which raised taxes on alcohol and tobacco but was ultimately aimed at helping small businesses. It's widely expected that the exemption will be in place for the 2014 season, and could come as early as this month.
The move does not excuse charter boat owners from any of the obligations to register their boat, gain permits and satisfy authorities that the boat will be solely used for charter purposes, and the exemption will have to be applied for, rather than granted presumptively.
Nor is it likely that those who have already paid out sometimes tens of thousands of euros in matriculation tax payments will be able to reclaim any money, according to Chumillas Amat.
But for many, this announcement couldn't have come soon enough. Russell Currie from Fairline North Mallorca has witnessed the damage done by matriculation tax first hand, telling MBYthe levy "almost wiped out the use of privately owned charter boats in Spain': This is supported by figures showing boat registrations in Spain in free fall. From January to June this year registrations were down 28% on the same period last year. The charter market has seen similar declines, down 22.2% in the first six months of the year compared to 2012.
Patricia Bullock, from Network Marine Consultants in Palma, a firm at the forefront of the effort to gain this exemption, said: "This simple modification of the law will have a huge effect on both the financial contribution the international yachting sector will provide to Spain and the regions and also on the creation of jobs on a national level:'