A new twist to the Spanish Matriculation tax

[alexchumillas]

Impuesto patrimonio - wealthy tax

Spain has reintroduced a wealth tax that could hit British boaters in an effort to shrink its budget deficit and avoid a crippling spike in its borrowing costs.

What this means in practice for non-residents is that if your foreign-flagged boat is observed by tax authorities as being permanently moored in Spain, then you'll be liable for the tax- NOTICE this is not Matriculation Tax!

An article added to the law also states that non-residents will need representation in Spain, likely through a gestor – a kind of professional administrator acting between you and the government. People failing to appoint a representative risk a €1,000 penalty if caught.

 

[Deleted User YDKXO]

Spain has reintroduced a wealth tax that could hit British boaters in an effort to shrink its budget deficit and avoid a crippling spike in its borrowing costs.

What this means in practice for non-residents is that if your foreign-flagged boat is observed by tax authorities as being permanently moored in Spain, then you'll be liable for the tax- NOTICE this is not Matriculation Tax!

An article added to the law also states that non-residents will need representation in Spain, likely through a gestor – a kind of professional administrator acting between you and the government. People failing to appoint a representative risk a €1,000 penalty if caught.

Jeez, if thats true, its going to drive every foreign flagged boat out of Spain because virtually every foreign boat is permanently moored there. Have you got any links to media reports confirming this because, if true, this goes way further than mat tax? It looks like the Spanish are hell bent on wrecking their marine industry

 

[StewartC]

Jeez, if thats true, its going to drive every foreign flagged boat out of Spain because virtually every foreign boat is permanently moored there. Have you got any links to media reports confirming this because, if true, this goes way further than mat tax? It looks like the Spanish are hell bent on wrecking their marine industry

Hi Mike,

Some of the wording in Alex's post has been taken from a news story I have been working with him on. It will be published in the Jan issue of MBY.

This wealth tax was reintroduced in September after being suspended in 2008. It's 0.2-2.5% of the vessel's market value if it's decided by the authorities that the boat is permanently moored in Spain.

Residents have a tax-free allowance on their worldwide assets of €700,000; non-residents have the same allowance for their assets located in Spain. Businesses are exempted from the tax, so some charterers might escape, depending on how your boat is registered.

The tax is coming back for the 2011 and 2012 tax years only.

The market value is slightly tricky, as this is the Spanish government's interpretation of market value, which I'm told is often well below the true market value.

Have spoken to two tax lawyers in Spain, including Alex, that have confirmed the fine for non-residents that don't have representation in Spain. The fine increases with ongoing infractions.

Here's a KPMG notice about it.

Stewart

Edit:

Changed: 'Residents have a tax-free allowance on their worldwide assets of €700,000; there is no tax-free allowance for non-residents. Businesses are exempted from the tax, so some charterers might escape, depending on how your boat is registered.'

To: 'Residents have a tax-free allowance on their worldwide assets of €700,000; non-residents have the same allowance for their assets located in Spain. Businesses are exempted from the tax, so some charterers might escape, depending on how your boat is registered.'

 

[idpnd]

As reported on noonsite also

 

[Deleted User YDKXO]

This wealth tax was reintroduced in September after being suspended in 2008. It's 0.2-2.5% of the vessel's market value if it's decided by the authorities that the boat is permanently moored in Spain.

Thats a fairly modest % and it would seem to be applicable for only 2 years but I still think it might be the final straw for some boat owners who are struggling financially to keep their boats in Spain. Of course some owners will also be wondering what else the Spaniards are cooking up in the way of taxes on boat owners following the mat tax and wealth tax and decide to go for that reason. Personally I don't understand the economic logic of taxing tourists who come to your country to spend their money

 

[Nick_H]

Does the rate vary between 0.2% and 2.5% in a similar way to stamp duty here, so you pay a bigger percentage on higher value boats? That could mean the owner of a million pound boat looking at an extra £50k tax bill, which may well be enough to persuade them to leave. It would pay for two years berthing somewhere else.

 

[jfm]

Jeez, if thats true, its going to drive every foreign flagged boat out of Spain because virtually every foreign boat is permanently moored there. Have you got any links to media reports confirming this because, if true, this goes way further than mat tax? It looks like the Spanish are hell bent on wrecking their marine industry

I agree Deleted User

In addition to the tax, the boat owner wll have to pay the fees of the gestor. Nice earner for them, esp the fluent english speaking good ones who will have a strong market position

The tax rate is set by the local regions of Spain, but in view of the ecnomic logic we have seen (you in particular) in Balearics you might expect that will set the rate at the top of the scale ie 2.5%

The tax is meant to be on net assets in Spain and I do not know if anyone with a loan secured on the boat can pay the tax on the net value. There will probably be some stupid rule that the loan has no situs in Spain especially if borrowed from UK bank (non Spain situs of the loan is probably true on basic legal principles: the situs of a loan is taken in many jurisdictions to be where the borrower resides, not where the security is located)

This is serious stuff. The SC contingent on here might want to move to France/Italy for a couple of seasons. Early mover advantage should be high on their list because French and Italian berths are surely going to fill up

Spain is going to be a great place to visit on cruises. No tax for visitors, plenty of berths avaiable, beautifu quiet anchorages. Meanwhile the Spanish continue to shoot themselves in the foot economically. Crazy stuff, incompetent politicians

 

[jfm]

Does the rate vary between 0.2% and 2.5% in a similar way to stamp duty here, so you pay a bigger percentage on higher value boats? That could mean the owner of a million pound boat looking at an extra £50k tax bill, which may well be enough to persuade them to leave. It would pay for two years berthing somewhere else.

It's a locally charged tax Nick. The local governments set the tax rate however they want, so long as it falls in the range you mention. There is precedent in Spain for scales like SDLT and different % for different asset types, etc

 

[StewartC]

Does the rate vary between 0.2% and 2.5% in a similar way to stamp duty here, so you pay a bigger percentage on higher value boats? That could mean the owner of a million pound boat looking at an extra £50k tax bill, which may well be enough to persuade them to leave. It would pay for two years berthing somewhere else.

Yes, the higher the value of the boat, the higher the tax. A million pound boat, as far as I can make out, will incur a 1.3% tax on its value. If your boat is worth over £9 million you'll pay the top whack 2.5%.

Edit: The tax rates I mention here are just a guide set out by central government. The various autonomous regions can pretty much tax as they like within the framework of the law, as jfm correctly points out.

 

[jfm]

Hi Here's a KPMG notice about it.

Here are two Deloitte notices: general note and some specifics about amounts and dates

The second note seems to say that the snapshot date for measuring your Spanish wealth is 31.12.11. That seems to suggest if you get your boat out by then you're ok. I have no idea what happens if you leave on 30/12/11 and return on 1.1.12, say

 

[JamesFrance]

There is a section of the new law which seems to suggest that the exemption of the first 700000€ does apply to non residents, however it is not clear.

 

[StewartC]

There is a section of the new law which seems to suggest that the exemption of the first 700000€ does apply to non residents, however it is not clear.

I've just had it confirmed again by a Spanish tax lawyer that there is no tax-free threshold for non-residents, although this note posted by jfm would seem to contradict that.

 

[StewartC]

There is a section of the new law which seems to suggest that the exemption of the first 700000€ does apply to non residents, however it is not clear.

Sorry! The same tax lawyer has just got back to me saying that non-residents ARE entitled to the same €700,000 exemption.

 

[Csail]

Jeez, if thats true, its going to drive every foreign flagged boat out of Spain because virtually every foreign boat is permanently moored there. Have you got any links to media reports confirming this because, if true, this goes way further than mat tax? It looks like the Spanish are hell bent on wrecking their marine industry

I'm currently in battle with Spain .....5000 euro fine now for doing 7knts in 5 knts speed limit ffs. Not going back . They can do what they want, i'm not paying.

 

[Cardo]

I'm currently in battle with Spain .....5000 euro fine now for doing 7knts in 5 knts speed limit ffs. Not going back . They can do what they want, i'm not paying.

Unfortunately, Spain do have utterly ridiculous fines for all sorts of rubbish.

My mother was fined €5,000 on a technicality in her bar. In fact, the law was repealed before she'd even had a chance to pay it off. Still had to pay, mind. This was not long ago, during the worst of the recession when most bars are struggling to make ends meet and are going out of business.

The Spanish government is a disaster. The law seems to be set up to make money out of the easiest prey no matter what the consequences may be. As usual, extremely short sighted and only interested in making a fast buck.

 

[jfm]

Sorry! The same tax lawyer has just got back to me saying that non-residents ARE entitled to the same €700,000 exemption.

Stewart, it would be totally contrary to the Treaty of Rome for Spain to apply a lighter tax to a Spanish resident and a heavier tax to non Spanish EU residents with identical circumstances. So the Spanish couldn't do what your lawyer first suggested. They'd have a letter from the EU Commission within a month and if they still dug their heels in an EU court ruling against them within 9 months, for sure

FWIW they could deprive non EU residents of the 700k exemption, and that would be fun to watch in terms of the reacton of some very seriously wealthy Americans and other non EU folks who own huge properties in Balearics, say.

 

[kashurst]

Just had this from my lawyers in Spain

"If you own a "punto de amarre" as it is called in Spain, then you should
pay an annual income tax on that as a non-resident. The same way as for
a property. The tax is based on the value of the Escritura.

This is equivalent to having "usufructo", which is the right to use the
berth, and therefore only generates Income Tax.

The government is going to introduce the Wealth Tax again for two years
only. 2011 and 2012. But it is for wealth over 700,000 € and they are
still unsure of the practical aspects. I called the tax office in
Madrid to ask and they just confirmed that at the moment they have not
detailed the new Wealth Tax Law so we will have to wait until that is
done with more information on the Wealth Tax. As it seems like the
Valencian region will be able to decide if they like this law to apply
here or not we will see what they decide in the end. "

Unfortunately my boat is not even close to 700K Euros, and I rent the berth, so I won't panic yet....

 

[alexchumillas]

APPOLGIES

Hi to all,

I want to appologize to everybody.

I have commited a terrible mistake and there is nothing else to say from my side than recognizing it. Effectively residents and non residents can benefit from a 700.000€ reduction on the tax basis of the Impuesto de Patrimonio.

Alex Chumillas

Hi Mike,

Some of the wording in Alex's post has been taken from a news story I have been working with him on. It will be published in the Jan issue of MBY.

This wealth tax was reintroduced in September after being suspended in 2008. It's 0.2-2.5% of the vessel's market value if it's decided by the authorities that the boat is permanently moored in Spain.

Residents have a tax-free allowance on their worldwide assets of €700,000; non-residents have the same allowance for their assets located in Spain. Businesses are exempted from the tax, so some charterers might escape, depending on how your boat is registered.

The tax is coming back for the 2011 and 2012 tax years only.

The market value is slightly tricky, as this is the Spanish government's interpretation of market value, which I'm told is often well below the true market value.

Have spoken to two tax lawyers in Spain, including Alex, that have confirmed the fine for non-residents that don't have representation in Spain. The fine increases with ongoing infractions.

Here's a KPMG notice about it.

Stewart

Edit:

Changed: 'Residents have a tax-free allowance on their worldwide assets of €700,000; there is no tax-free allowance for non-residents. Businesses are exempted from the tax, so some charterers might escape, depending on how your boat is registered.'

To: 'Residents have a tax-free allowance on their worldwide assets of €700,000; non-residents have the same allowance for their assets located in Spain. Businesses are exempted from the tax, so some charterers might escape, depending on how your boat is registered.'

 

[kashurst]

Alex, Thanks for letting us know - spiced up this morning

 

[StewartC]

Stewart, it would be totally contrary to the Treaty of Rome for Spain to apply a lighter tax to a Spanish resident and a heavier tax to non Spanish EU residents with identical circumstances. So the Spanish couldn't do what your lawyer first suggested. They'd have a letter from the EU Commission within a month and if they still dug their heels in an EU court ruling against them within 9 months, for sure

FWIW they could deprive non EU residents of the 700k exemption, and that would be fun to watch in terms of the reacton of some very seriously wealthy Americans and other non EU folks who own huge properties in Balearics, say.

I'll have to go brush up on the Treaty of Rome! That'll be some fun reading. Is there a film of it?

I reckon a fair few people will still get socked. How many Brits own homes and boats in Spain with a combined value of more than €700,000?