Spanish Taxes and Boat Registration.

This article has been prepared by the The Cruising Association of the UK, and is reprinted because I receive mails asking about boats, which are outside my area of expertise, although many of the principles are the same.   I obtained the article from Denise Hurst, to whom I am grateful for the help in obtaining it.  Denise produced it for the Costa Del Sol News in July 2005. 

To go the to CA’s web-site, click here http://www.cruising.org.uk.     It is recommended that, as a boat-owner, you join The Cruising Association to stay up to date with the regulations, and the many other benefits.

I have added notes on using foreign registered trailers at the end of the main article.

 

There have been rumours and a few reports of boat owners being "caught" for contravening Spanish tax legislation. On at least two cases fines have been imposed in addition to a 12% tax on the value of the boat. This note has been prepared by CA members Ted Osborn and Frank Singleton on a best endeavours basis in order to warn boat owners of the risks and possible penalties that might be incurred.

There are three tax issues that may affect boat owners in Spanish waters: - 

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First, and completely separate is the harbour tax, known as G-5.

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The second is often referred to as "wealth" tax.

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The third is the re-registration of boats under the Spanish flag.

The situation is by no means clear but two CA members have compiled this summary of the relevant Spanish Tax laws as far as they understand them. It should be remembered that EU citizens have right of abode in other EU countries but, also, potential tax liabilities as they must obey the laws of, in this case, Spain.  

Tarifa G-5               It is emphasised that this is a tax on pleasure craft using ports, coastal installations or moorings. It is intended to provide funds for the maintenance and improvement of such installations. In effect it is a harbour tax charged by the Province and applicable to all pleasure vessels although few skippers appear to be aware of its existence. It is not to be confused with "wealth" tax. Other port taxes do not apply directly to leisure vessels.

Yachts are charged G-5 at Dénia and, probably, elsewhere in Valenciana Province but, possibly, not everywhere. For long stay boats in the province, the tax is levied twice a year March 1 and September 1 and is payable in advance. If you make arrangements to pay by standing order there is a discount of 20%. The owner of a 10 m Moody is paying about Euro 1 per day or £120 for 6 months. The rate in Valenciana is calculated as Euro 0.0304 x L (metres) x B (metres).

Marinas or ports are responsible for advising the authorities of the boat's existence and the owner's details. In some cases, the fee for long stay boats is payable direct to the Province. For short stay boats and, possibly, in other Provinces, then either the tax is not collected or it may be built into the marina charges. In Catalunya, for example, it seems not to be charged at all.  

"Wealth" Tax and Registration of Boats.     There have been rumours now backed up by some hard facts concerning boat owners who have fallen into the Wealth tax and re-registration trap. This summary is based upon information kindly supplied by two expatriates with 20 or more years of experience in Spain. Their joint direct expertise includes boat ownership, boat imports, registration of vessels and acquiring formal certification to skipper. 

Spanish flagged vessels      A Spanish lawyer has explained that although the law is a national law the actual rates of tax and details of application are matters for the provinces or local authorities and thus may vary widely from place to place.  

Short stay sailors     First and most importantly, a person staying in Spain for less than 6 months is not liable for wealth tax or re-registration of his boat and, as far as is known, they can leave their boat in a Spanish port, over the winter say, with no such liability. Whilst there is some doubt about this, all experience and evidence indicates that it is the individual's residency status which influences the tax situation - not the geographical location of the yacht.

Under international treaty, which both Spain and UK have signed, all vessels belonging to either country must fly their national ensign and a courtesy-ensign when in the other's waters. The legal meaning of the courtesy ensign is "I declare that my vessel complies in all respects with the relevant legislation of my flag state and I respect the local legislation of the country in whose waters I am".

With this undertaking a British vessel can be brought into Spanish tidal waters and sailed at will without restriction subject only to her conformity with appropriate UK vessel legislation. Since only recreational vessels used commercially or very large yachts are subject to any UK legislation this is not a problem for most people.

The International Certificate of Competence (ICC) is not required by UK flagged yachts although many may have found it useful to have one on board since harbour masters sometimes expect this. A Yachtmaster Certificate accompanied by translation into several languages, as provided by the RYA, should be at least as useful as the ICC.

It is recommended that people, do not remain in Spain for longer than 182 days in a 12 month period.  As a precaution it might be worth remembering that some officials might not regard a few days in Gibraltar as being out of Spain. With those precautions, there seems to be no good reason why sailors should not enjoy the country, the friendliness and the hospitality for which the Spanish are rightly renowned.

When leaving a boat in a marina, say for the winter, it is probably sensible to leave it as very obviously de-commissioned. As a matter of good practice the log should show movements clearly and the time spent in Spanish waters. In the event of being challenged, the onus of proof is with the boat owner who is advised tot keep marina receipts, proof of air travel etc out of Spain. It is possible to have the boat precintado or sealed by the Customs as proof that it is not being used to follow the less than 182 day rule.


There is one report of an owner being fined for exceeding the 182 day rule by only a few days and boats HAVE been impounded.
 

Taxation due to Residence and/or Property ownership.       Before contemplating spending over 183 days in Spain in any period of 12 calendar months, whether ashore or afloat, it is necessary to be aware of the rules that do apply. A useful, although not necessarily completely accurate, website is run by the Foundation Institute of Foreign Property Owners - http://www.graysworld.co.uk/spanish-property/resident-tourist.htm

Situations under which a boat owner can become liable for tax in Spain are set out below. Experience of at least one owner emphasises the importance of indicating any intention to remain in the country for over 183 days

A person who is classed as resident in Spain (i.e. who lives in the country for over 183 days in a 12 month period, thus indicating that Spain is the principle place of residence) has to comply with Spanish tax legislation. They have to declare all their income and pay the corresponding tax. They have to register their cars, yachts, planes in Spain. They have to pass the relevant tests of competency for driving and skippering a boat, and EU citizens who have never at any time worked in Spain must apply for a residency card, called a residencia.

In other words, if you choose to live in Spain, then you play the game by their rules.  

Taxes for residents include the following:-

  1. Impuesto sobre la Renta de las Persones Fisicas (Income tax for individuals). This is applied to all Spanish nationals and other residents who spend more than 182 days per annum in Spain or receive pension or income received in Spain. Charter fees for your boat are charged under this tax (chartering as a business is beyond the scope of this Note and requires detailed local legal advice).

  2. Impuesto sobre Bienes Immuebles (IBI). This is a local tax, similar to but lower than UK local rates, and is levied on all property registered in Spain by the local town hall according to their rating tables. It is not charged on boats in all areas and is generally a trivial tax

  3. Impuesto sobre el Patrimonio (Wealth Tax) based on an official value of personal property known as 'valor catastral'. There are complicated local rules for defining this value and much scope for appeal against decisions. If charged Wealth Tax then local professional advice will be needed.

NOTE - If a person spends more than 6 months per year sailing in Spanish waters, it is considered that they have spent the majority of a tax year in the country. Therefore, they are liable for Spanish tax etc. Residency rules apply and they become liable whether or not they stay in one place for a substantial part of that time.

Historically, the six month rule has been very difficult to control and provided people "kept their head down" there was not much chance that they would be "caught". It seems, generally, that the people who were stopped were those very obviously working in Spain or remaining in one place for a substantial period.. However, it may be that the terrorist, illegal immigration, yacht theft and drugs factors are making the authorities more vigilant. It must not be assumed that by moving around will result in escaping the Residency rules.


It is important to understand that, in Spain, apart from the VAT to be paid on a means of transport (which includes a boat) there is an additional "matriculation tax" of 12% to be paid on re-registration. In other words, if a boat does not have proof of having paid VAT or proof of exemption it could be charged 28% tax on it's value and the owner could also be charged wealth tax. Do not confuse liability for VAT with matriculation tax or with wealth tax. These are three separate matters

A non resident who owns habitable property in Spain has to pay what is often referred to as a "wealth" tax but is, in actual fact, a tax on a fictional rental income of the property as it is not his/her primary residence. This is only payable on property owned in Spain. While your yacht remains UK-flagged it cannot be charged to this tax.  

Compulsory Spanish Boat Registration     For those whose residential status means that they have to register their boat under the Spanish flag, the ground rules are as follows.

When a residency in Spain applies, as it must do after 6 months (see above), the terms of the residency status must be followed. This means acting like a Spaniard and following their rules. These include not being allowed to own or navigate a foreign-flagged vessel in Spanish Waters (and, for that matter, not being allowed to own or drive a foreign registered car in Spain).

Boat ownership could be transferred to a family member back in England. The boat can then stay British - but the Spanish resident cannot skipper it. The only way round is to import the boat legally to Spain (not a problem) and re-register her under the Spanish flag (again, not a problem).


Re-registering Spanish is best done locally.  Details are available in most large harbours or from the local Commandancia de Marina Mercante. The cost, however, is understood to be quite high and includes the 12 per cent tax levy on an assessed boat value (matriculation tax).

The standard UK yacht insurance policy will also be affected, but probably not greatly. It is important to keep the boat insurance company informed. Spanish yacht insurance normally includes a bail-bond and it may be thought prudent to include this on re-registration.  

Compulsory Qualifications   For those who do register their boat in Spain the difficult part will be to obtain the necessary personal certification. Some of the problems and pitfalls are set out here.

A person having residential status must obtain the appropriate Spanish qualification or an exemption to command their own vessel.

The Spanish qualification is called the Patron de Yate and is available in 4 categories for different types of boat and intended range of sailing offshore. Each involves a theoretical and a practical exam and is conducted only in Spanish. It is generally considered that a high level of literacy in the language is required.
The Patron de Yate for a 9 metre boat with a 30 miles range, for example, requires the learning of a glossary of 600 Spanish sailing terms and the passing of a 200-question multiple-choice written paper.

It is understood that it is possible to obtain exemption from the Patron de Yate examination if Royal Yachting Association Yachtmaster qualifications are held. No ruling on the matter has been found and practice clearly appears to vary locally. The ICC is not recognised for Spanish flagged vessels.  

Equipment Regulations   Spanish registration also involves regulations concerning the vessel's equipment inventory. The average British yacht which can sail to Spain is almost invariably already suitably equipped. Yachts for charter however should check with the local Commandancia de Marina Mercante.  

Legal Advice   The law in Spain has not changed, it is simply being applied more evenly and thus to a wider extent than formerly. Practice varies considerably between the various Provinces and even within Provinces, but the whole country remains the warm and friendly place it always has been.
If challenged by a taxation or regulation demand, perhaps by a local harbour master or official, remain friendly - he may not know all the details himself about the system. Always enquire in detail if possible and always ask for everything on paper and for the name and address of the official's superior office. Spain is a country foreign to our ways but is very civilised in these matters. Talk to fellow yachtsmen, they may have the relevant information. Above all, keep the local officials informed of what your intentions, and under no circumstances try to avoid the situation by 'doing a runner', even to the next marina along the coast, without telling the officials first.

If real problems arise there is little alternative but to find a local Spanish lawyer who knows the local mores as well as the law. Many lawyers speak good English and will often give a quick bit of advice free. A usual charge however is about €90 per hour. The local British Consul should also be contacted and an owner should register with him. He cannot give legal advice under any circumstances but will be able to provide a list of local specialist lawyers who speak good English and will probably be of much general assistance. If involved in a dispute with the fiscal authorities then keep them informed at all times about boat or personal movements and intentions. Experience suggests that dealing with a Spanish lawyer may not be as easy as with a lawyer in your own country. Language problems are likely to be more apparent when dealing with legal issues. Also the urgency and vigour with which cases are pursued may differ from expectation.  

Further Information   CA members have been asked to pass details of any problems incurred in Spain along the lines of this document to Ted Osborn - OsbornTed@aol.com or Frank Singleton - franksingleton@clara.net. Others are invited to do likewise so that the best information can be made available to sailors through the CA and the RYA.  

You can find more information (in Spanish) here

http://www.arrakis.es/~zamoul/pn.html

http://www.mfom.es/marinamercante/subdireccion_trafico/procedimentosregistro.htm

http://www.titulosnauticos.net/

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Towing boats on trailers in Spain.

I have started receiving E-mails from boat enthusiasts about towing with a foreign registered trailer (or in the case of the UK, no individual registration number plate, just the same one as the car).  Much of the general info is in my book (Second Edition), so I will touch on points that are not.

Towing weights.  The Laws in Spain are basically the same as elsewhere in the EU, and eventually, all will be standardised.  If you are towing a trailer with a MAM (maximum authorised mass, or approved maximum weight) as listed below, then the ratio between the weight of the trailer and the towing vehicle for a "B" driving licence (normal car classification) must be as follows: -

Where the towing vehicle's MAM  is 2.000 kg with a tare (unladen mass) of 1.500 kg, then the trailer can be up to 1.500 kg, making a total combined unit weight of with the tow vehicle laden, 3.500 kg.  The trailer's MAM must not be more than the tow vehicle's unladen weight.     This is a safety consideration.

Example        Car with unladen mass of 1500 kg + trailer of MAM 1500 kg maximum, the combination total laden weight of not more than 3.500 kg (allowing 500 kg for passengers and luggage in the car).

For those with a Class C1 + E licence which allows the vehicle's MAM to be up to 7.500 kg, the same ratio applies where if the unladen mass of the towing vehicle is at most 4.500 kg, the trailer can be a MAM of up to 4.500 kg with a total combination weight of 12.000 kg (12 metric tonnes), allowing up to 3.000 kg for the towing vehicle contents (passengers, etc).

Note.  Not applicable here, but a C1 licence allows a vehicle MAM of up to 7.500 kg, and a trailer of up to 750 kg MAM can be towed, making a combination weight of 8.250 kg.

Class D1 + E licences.  Combination MAM of up to 12.000 kg where again the trailer MAM does not exceed the unladen mass (tare) of the towing vehicle.

Note that the tare weight is the total weight of an unladen vehicle but with all oils and a full tank of fuel.  The weight will be on the Tarjeta de inspeccion tecnica de vehiculos, or if an English registered vehicle, the technical specification information (Type Approval) supplied by the manufacturer for your vehicle.

Registration of foreign trailers in Spain.   All trailers with a Maximum Authorised Mass (MAM) of more than 750 kg, in Spain are registered in the same way as a motor vehicle with its own registration plate.  If you live here for more than six months (183 days) of each calendar year, then Spain is considered legally as your principal place of residence, and your trailer will have to be placed on Spanish "plates".  If you do not, then make sure that you carry with you originals or certified copies of your ferry tickets, or if driving, proof that you have left the country to return to your principal place of residence or another EU country for the other six months.  Getting your passport stamped is one way.  Going to Gibraltar or Morocco for a few days does not count.  Sorry folks, I am just the messenger.  Remember that it is OK for the period to be from the 1st July to the 3oth of June in the next year, as this satisfies the Law.  There is much more on this in my book, as those who have it will know.

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