It is quite frequent that we receive queries about the processing of the exemption from registration tax on charter boats. This obliges us to be as up to date as possible and to study the different ways in which this can be applied in different cases. Recently, two Resolutions have been published by the Tax Agency related to the exemption from registration tax and related companies and non-residents. From both rulings we can extract the following:
When a non-resident company plans to operate in Spain with nautical charters, it is vital to understand how the Special Tax on Certain Means of Transport (IEDMT) works since, for its operation, it is necessary to apply for this exemption. But it must be clear that:
In order to benefit from the IEDMT exemption (article 66.1.g of Law 38/1992), you must have an ‘establishment’ in Spain (permanent establishment). In these cases, if you do not have an office or physical location, the boat itself can be considered your establishment for tax purposes.
The boat can be rented to companies or individuals related to you (related entities) without losing, and this is the important point, the IEDMT exemption, as long as these related entities are not resident or have permanent establishments in Spain.
In short, what is ultimately to be clarified is that it is feasible for non-resident companies to operate yacht charters in Spain benefiting from the IEDMT exemption. The key is to comply with the requirements and ensure that relationships with related entities do not jeopardise the tax benefit.
