1. THE YACHTING INDUSTRY: ESSENTIAL FOR THE ISLANDS
Miguel Ángel Serra Guasch
Legal&tax advisor of the Spanish Yachting Association (ANEN)
Partner at Albors Galiano Portales
Brussels, Abril 5, 2019

2. Some basics Yachting is an Industry Yachting is Tourism
High purchasing power
High average stay in destinations
Diversification and deseasonalization of traditional tourism
Low consumption of territory
Huge growth potential
Spain (direct, indirect and induced impact, 2016)
GDP: 11,900 M€ (multiplying effect: 3,25)
GVA: 4,800 M€ (multiplying effect: 4,97)
Employment: 82,500 (multiplying effect: 4,20)
Approximately 40% in the Balearic Islands

3. Some basics
Spain compared to Italy, England and France (2009)

4. Spanish Matriculation tax (I)
Origin
European Single Market launched on January 1, 1993: elimination of increased VAT rate (28%) on luxury assets (e.g. means of transport)
Creation of a 12% mat tax on top of VAT general rate (16%) to make 28%
To date this is anachronistic and do not collect any money (16 M€ in Spain)
To date is just a political issue (accused of removing taxes to wealthiest)
Non-harmonized tax
Taxable event
Registration in Spain of boats longer than 8 metres (new or used)
Use of yacht in Spain by Spanish residents or non-residents with ‘establishment’ in Spain (only since January 1, 2011)
Rate: 12% on the purchase price (market value when used)

5. Spanish Matriculation tax (II)
Consequences
Spain is the only EU country where exists such a matriculation tax
Hinders the development of a strong and powerful nautical industry
Causes both real and opportunity economic costs
Legal uncertainty (undefined legal concepts)
Dislocation of investments
Parliamentary question by ALDE Group on December 14, 2010
Is it against principle of movement of persons and capitals and freedom of establishment?
Answer of the EC on February 8, 2011: not an harmonized tax, no need to take actions Commission (there was only 1st taxable event):

6. Spanish Matriculation tax (III)
Currently matriculation tax is contrary to EU principles
Principle of free circulation of persons and capitals
Principle of freedom of establishment
Complaint to be filed soon to the European Commission
Announced by ANEN (Spanish Nautical Association) and AEGY (Spanish Large Yachts Association) on March 14, 2019.
EC and TAXUD should have opened infringement procedure against Spain
The industry has realised that needs a strong presence in Brussels

7. UCC: Union Customs Code (I)
Regulation (in force since May 1, 2016)
Regulation (EU) No 952/2013 of the Parliament and Council of 9 October 2013
Commission Delegated Regulation (EU) 2015/2446 of 28 July 2015
Commission Delegated Regulation (EU) 2015/2447 of 24 November 2015
Commission Delegated Regulation (EU) 2018/1063 of May
The UCC is an EU Regulation
Primary EU Law (vs Directives)
Direct application (no need to transpose to internal law)
Addressed to EU citizens (not to countries)
Should be efficient to create ‘Unified EU Law’

8. UCC: Union Customs Code (II)
Different criteria and formalities in the EU countries
Legal uncertainty
Negative International image
Consequences if failing to comply: VAT on the hull !!!
Importation of commercial yachts (148 VAT Directive)
France (FCE, 2004, ECJ March 21, 2013)
Italy (ICE, 2018)
Spain: not possible
EC should be aware of discriminatory criteria in the application of EU legislation

9. UCC: Union Customs Code (III)
Customs regimes (yachts)
Temporary Admission (TA)
Non-EU yachts may be used in the UCT without payment of customs duties or import VAT under certain conditions and re-exported afterwards (18 months)
Returned Goods Relief (RGR)
Eu yachts in free circulation within the EU at the time of export may be re-imported within 36 months into the EU without payment of customs duties or import VAT
Inward Process Relief (IPR)
Enables to get relief in customs duties, import VAT and excise duties n yachts imported from outside the EU to be processed and then reexported outside the EU

10. Tax on Fuel
Regulation
Council Directive 2003/96/EC, of 27 October 2003, on energy products
Article 14.1 (c): not applicable to energy products supplied for use as fuel for ‘private pleasure crafts’
Applicability to yachts commercially operated (charter) in the EU:
France: exemption was applicable until September 20, 2015
Italy: exemption still applicable as of today
Spain: Never admitted

11. Non-Resident Income Tax
Taxation of non-residents activities operating without PE
Double Taxation Treaty (DTT) in place
Business profits (article 7 OECD Model Convention)
Taxed only where the Company is resident (not source of income)
No Double Taxation Treaty in place
Business profits taxed at source
Rate: 24% on taxable income (income less some expenses).
France or Italy
Double Taxation Treaty (DTT) in place: same treatment
No Double taxation Treaty in place: NO taxation (only if operating with PE)

12. Thank you very much and… happy sailing!