ISDMT #2 - Is this correct?

[bazobeleza]

Re: Story repeats

The friends I have have talked to are all using their boats as floating holiday accomodation and in that regard think they contribute enough to the spanish economy with marina fees and purchases whilst on holiday.

I'm shortly taking two to be lifted in portugal and then one Mobo) will be going home on a lorry, the other (sail) have decided to move to portugal and then s france.

These are relatively high value newish boats that would be particularly hit by this tax, and the owners are no nonense people that do not appreciate even the hint of a threat of being mugged especially whe you consider the amount they have allready spent in the spanish economy, are acting quickly because of the uncertainty.

Other friends are busy making contingency plans, all will move their boats if this takes off, irrespective of berthing, weather etc, all will move the boats sooner rather than later, as the threat of impounded boats or pay money over makes owners very, very, uncomfortable.

As word gets around people will get very jittery.


By the way, I must say my life changed for the better when I discovered nauticats, the carpet slipper thing came about when I was in the SW Approaches one stormy night and dived out on deck in slippers and dressing gown to sort a problem out at the pointy end. I've never lived it down /forums/images/graemlins/grin.gif

 

[Anonymous]

Re: Story repeats

Thanks for that, that's what I wondered. We have been looking on the Internet at Galicia and France since I speak French and Spanish. I fear that things further south are going to be a problem...too many out of work N Euros and not enough income to the population. I hope I'm wrong.

I can imagine that the Nic 32 would be OK as it is in its own way a classic and rather simple yacht. We have seen pobs with older production boats and one very old French ferrocement yacht that is just rotting away now (does FC rot?). The owners have abandoned it and not paying the marina fees any longer. There will be a lot of that happening in Club Med. Did your friend have problems getting non-homogulated kit accepted - did he have to replace it all?

 

[Anonymous]

Re: Story repeats

[ QUOTE ]
The friends I have have talked to are all using their boats as floating holiday accomodation and in that regard think they contribute enough to the spanish economy with marina fees and purchases whilst on holiday.

[/ QUOTE ]

That's a very relevant comment. We live by 'tourist rules' and we don't expect anything from the host state. Given that these countries advertise to attract tourists presumably they make money out of us? Suppose we are in Spain, say, for more than 185 days and then move to Italy for six months. Are we supposed to keep changing our country of Ordinary Residence every year of so? Changing Driving Licence, yacht papers, tax details,.../forums/images/graemlins/shocked.gif It would be absurd, nobody could expect that. The only constant connection we have is with the UK where we have our families, banks, investments, health insurance and passports. Yet these rules try to treat you as a resident in a place where you are just bunking up for the winter. 185 days is not long enough...it ought to be 185 days in at least two or three consecutive calendar years, unless you intend to make a permanent move, of course.

[ QUOTE ]
As word gets around people will get very jittery.

[/ QUOTE ] I am sure you are right. It'll be good business for yacht delivery skippers and crew.

 

[Wansworth]

Re: Story repeats

lEMAIN,He had no problems just time and plodding thru the process.The boat required a porta potti but the surveyer just glanced at the unopened box of the porta potti and then at his watch and left for lunch,he barely looked at the boat and the porta potti belonged to the marina ...which lends out the box for surveys!!!! I had more or less the same treatment with a boat years ago just have to be calm and see the funny side......how did Columbus ever get going.....!

 

[Anonymous]

Re: Story repeats

That's interesting and different from the experiences in SE Spain. Different surveyors, or admin regions? I suppose you need a porta potti if you haven't got a holding tank?

 

[Plomong]

Re: Story repeats

Just a thought. When thinking how you are treated tax-wise by the Spanish authorities, do any of you think about the following:

1. When you are resident in country X, it is normal that you abide by the laws of country X, in all respects. That includes paying taxes, driving on the correct side of the road, driving a car that fulfills the legal requirements established in that country, etc etc. I'm sure you all are in agreement with this, or at least I hope so.

2. When the law states you must register your boat in Spain because you have become resident in Spain, the boat must then be outfitted according to Spanish laws and regulations. That's logical, and the same in most countries.

3. Spanish outfitting and other boat related regulations are based on RCD and SOLAS requirements, and differ only in details with respect to, for instance, France. I'm sure the same would be the case if we compare Spanish regulations with Italy or Germany or .... The only odd man out, as it were, is the UK, where there are no regulations, it would seem. And hence some of the flap about changing boat registration. The tax bit is a different story, and explained in my previous post.

4. A foreign-owned boat parked in a Spanish marina all year round is taking up space that could be used by a Spanish citizen's boat. After all, most Spanish marinas are financed by public capital, and designed for local use, or at least so we are told. To have a significant percentage of available places occupied by foreign boats is not a happy situation, especially when the purchasing power of the owners drives up prices as well. Here I am not talking about live-aboard boats, but rather those others who just pop down a few times each year. A similar situation exists around the Solent and other parts of southern England, if I am not mistaken, where demand from non-residents drives up the costs for local residents.

5. Lemain mentioned the problem of "homologacion" of equipment (homologacion = type approval) when transferring registry. In practice, this is not a problem. If the item has a type approval from another EC country it is valid in Spain. However, some items such as lifejackets are stickier. The French regulations accept a 100N jacket whereas the Spanish requirement is for a SOLAS approved jacket of 150N for zones 2, 3 and 4; 275 N for zone 1. Note: SOLAS approval. That can be approved in any EC country. It does not require an explicit Spanish approval anymore. Just think of it a bit: If I get AENOR type approval for a widget produced here in Spain, that approval is recognised in all other EC countries. Similarly a German TUV type approval is valid in Spain. The same applies to lifejacket, radio etc type approvals. Any official that says otherwise needs to be handled in the manner briefly outlined in my other post -- gently gently brought into the 21 century, and Europe. Many are not there yet !!!! How do I know ??? I live here, and work here!!!
Evidence:
- My VHF radio was accepted as Approved on the basis of its French type approval.
- In the company where I work, we deal with type approvals all the time, both for equipment and systems manufactured by us, where the corresponding tests are performed by a local standards laboratory who also issue the certificate, and for items purchased in other EC countries. For some types of equipment, we need to go to TUV for approval, as the local laboratory does not have the necessary expertise at the moment.

(Just an aside: when I went to register my boat here in Spain, I was initially told that I could not do so, as I am not a Spanish citizen. That was easy to debunk. I failed, however, to keep the original of the RCD Compliance Declaration. It is now in a ministry archive somewhere, with a photocopy on the boat, but I'm working on getting back the original. Patience, patience, o Lord, give me patience with those who just don't want to be normal).

6. It would appear that, up to now, many liveaboards have been avoiding their tax obligations, not being resident in the UK, and not declaring their presence over here, and so not paying tax here. That situation could not last forever. Now that most autonomous regions get a percentage of the income and special taxes collected in their region, it is only logical that they are trying to maximize their collection efficiency. And that applies not only to boat owners, but also to dentists, lawyers, businessmen, etc etc. Really part of the process of Spain growing up. I remember a conversation with a taximan in Oviedo 10 years ago. He was complaining loudly about having to pay income tax, and being very vocal about it. When I asked him, he told me that up til then he had NEVER PAID ANY INCOME TAX AT ALL. He had never declared, and was never challenged. At the time he must have been well over forty, so could have been working 20 years or more without paying a sous to anyone. That could not continue. Likewise, liveaboards must recognise that they also have obligations. They live here, just like anyone else, so must share in the common tax burden.

Plomong

 

[Anonymous]

Re: Story repeats

Firstly, I would like to thank you for outlining your experience so clearly. You have certainly dotted a few is and crossed a few ts for me though even as a marginally capable Spanish speaker I doubt whether I would be as successful as you in dealing with homogulation. My first introduction to this problem was from a (Brit) chandler who had taken over an existing chandlery business. As far as he was concerned, it is a major issue and the reason why chandlery items cost so much more in Spain. Be that as it may, I think that we are all agreed that re-flagging your yacht as Spanish is not something you undertake lightly. If your yacht is for holidays or you are a liveaboard cruiser, you will just move on. Only if you have decided to settle in Spain will you (voluntarily) re-flag your yacht.

This does pose a big problem for those who have purchased marina berths worth tens of thousands of pounds. Those berths will now be worthless for resale as no foreigner will want to get locked-into a Spanish mooring.

[ QUOTE ]

4. A foreign-owned boat parked in a Spanish marina all year round is taking up space that could be used by a Spanish citizen's boat. After all, most Spanish marinas are financed by public capital, and designed for local use, or at least so we are told. To have a significant percentage of available places occupied by foreign boats is not a happy situation, especially when the purchasing power of the owners drives up prices as well. Here I am not talking about live-aboard boats, but rather those others who just pop down a few times each year. A similar situation exists around the Solent and other parts of southern England, if I am not mistaken, where demand from non-residents drives up the costs for local residents.

[/ QUOTE ]

The poor dears will be spoilt for choice, now, then! Bigger marinas will empty and become undesirable especially for the Spanish who value crowding -- they hate peace, quiet, and emptiness.

[ QUOTE ]
6. It would appear that, up to now, many liveaboards have been avoiding their tax obligations, not being resident in the UK, and not declaring their presence over here, and so not paying tax here. That situation could not last forever.

[/ QUOTE ]
I think that's true to some extent. Some really were/are taking the piss. Others are good spenders and are like perpetual tourists who would never consider becoming resident in a formal sense and the loss to Spain will be the latter group. The first group is pretty small beer; they tend to be older and poorer and they tend to slink back to the UK when ill health hits or money runs out. I don't see any big value in any of this to Spain -- on the contrary, good spenders will move away, creating voids in marinas, restaurants and other local businesses will close, tightening the spiral down. The Spanish have chosen a very odd time to be increasing taxation on discretionary spending. Remember that every Brit is spending basic subsistence money on food, moorings, clothing, fuel and transport -- all of which are taxed by IVA as well as providing local jobs. All that income will go, for the foreseeable future.

[ QUOTE ]
liveaboards must recognise that they also have obligations. They live here, just like anyone else, so must share in the common tax burden.

[/ QUOTE ]No, nobody who is spending their money must recognise anything. They will go and what they are presently spending will stop. That will have a very serious effect on business around marinas. People can and will vote with their feet. You can impound a boat but you cannot confiscate it and you cannot 'impound' British Citizens. For the most part, those who are not moving about are living on pretty low-value boats anyway so the potential tax revenue is peanuts. The real money is moving now, or has already left (as we did last year). Last April I came to the conclusion that it was unsafe to remain in Spain for more than the 183 days. I am very glad not to be there today.

 

[Anonymous]

My suggestion is that anyone who has been assessed for ISDMT who would prefer to remove their yacht from Spain should appeal against the tax on the grounds that they did not know of or fully understand the implications (i.e. re-flagging) and that as a consequence they will remove their vessel from Spanish waters as soon as the weather and crew permit.

It would be very hard for any reasonable authority to refuse that.

If re-flagging does not take place, then how can a matriculation tax be payable?

For non-trivial sums I would use a London lawyer who does not have a Mediterranean appearance, or speak with a Spanish accent.

 

[bazobeleza]

Re: Story repeats

Just phoned a mate and he'd said he'd heard rumours about the possibilty of this tax in November and he'd done a quick calc on his newish and admitedly rather ostenstatious and large mobo and reckoned his liability could be in the region of 60k euro, not a happy bunny at all.

I am, on the other hand looking forward to the trip to relocate that boat with him to France. His marina contract is due for renewal within a couple of months and he will sacrifice a month of that to move.

There are going to be a lot of empty 50'+ berths going begging when his friends move and note I say when, not if.

I know that a friend of his keeps a rather nice 78' mobo there, he will move, but what of the permanent spanish husband and wife he employs full time to keep his pride and joy pristine, the external cleaning crew and the extra crew he employs every summer. A good swap for the spanish economy, maybe a one off 100k tax vs an ongoing 70 - 80k a year which is what he reckons it costs to keep his boat in spain?

It looks like Beleza will be neglected a bit this year as friends with boats in spain move them on. Still it will be a bit of varied boating for me.

 

[Anonymous]

Re: Story repeats

It stands to reason that those with most to lose will make sure that they get out in good time. I suppose that France and Portugal will be the main beneficiaries. Maybe 'beneficiaries' is the wrong term? Maybe, as someone else suggested, the Spanish really don't want all these foreign yachts and yachties clogging up their marinas.

At least your friend doesn't have long to run on his berthing contract; I have many friends who own their berths or have long-term contracts.

This is clearly going to become a mass exodus now that the mainstream press has publicised it.

 

[JamesFrance]

Re: Story repeats

I posted this link in the previous thread:
http://www.nauticalegal.com/artics/Navegar_n163_p126.pdf

I am posting it again as it states that someone resident in another country has NO liability to pay this tax if he registers under the Spanish flag.

Now these people could be wrong, but they do appear to be specialists in this subject.
http://www.nauticalegal.com/

 

[Anonymous]

Re: Story repeats

James, you are referring to item 2 "Matricula Turistica"? They talk about Matriculation Tax but they don't mention the 12% or the discount for age. Also note that they don't use either the acronym ISDMT where the 'S' is for 'special'. All I am saying is that if they are referring to ISDMT then they are being a bit sloppy.

As I have said before, we have never heard of a non-resident being assessed for this tax. But on the other hand, the collection of it has been very haphazard in the past; could it be that Madrid has issued clear instructions to the regions? The information from Torrevieja seemed very clear.

 

[JamesFrance]

Re: Story repeats

David, I think it is put in simple language there, but the next section does state that the matriculation tax is 12%, so it has to be that.

If you look around the web site you will find links to Hacienda legal pages, so I expect the legal definitions are all there somewhere.

The article in the link is just saying that there can be cost advantages for non residents of Spain to register under the Spanish flag. The non liability to ISDMT (which is a clean air tax it seems) making it cheaper than some other countries.

 

[Anonymous]

Re: Story repeats

Yes, I see what you mean. He does say in several places that the Matriculation Tax is payable (only) when the vessel is for use by a Spanish resident. Unfortunately, he does not cite the codes (Spain is totally codified for law and tax). This leave us not knowing whether he is correct or whether the rules have changed.

Since none of us has ever heard of a vacation yacht being assessed for ISDMT and given that there are thousands of them, at very high value, there is a good chance that the rules used not to include boats belonging to non-residents. We do know that the EU rules permit tax to be charged on these yachts and we know that's what was said in Torrevieja.

I suppose we could ask this fellow Yamandú Rodriguez Caorsi who says that he is a lawyer working with other specialists. Is that something you could follow up?

 

[JamesFrance]

Re: Story repeats

I think I have found the legal basis for this and here is a translation:
http://translate.google.com/translate?hl...%3D1979%2F28527

There are other links in here too which need reading for the complete picture and it seems to go back to a Royal decree of 1979.

If it were then I could have asked Juan Carlos as we were close marina neighbours in Palma then and he always spoke in passing. (I don't suppose he would have understood it any better than the rest of us though.)

 

[Anonymous]

Re: Story repeats

It goes back a very long way. It's not impossible that Madrid has extended the rules to cover non-residents and demanded collection at the same time. By so doing, they don't have to worry about how long the owner has been in Spain or debate 'residency'.

I'm no saying that is the case, of course. The only evidence we have is the statement from Torrevieja. My lawyer also said that the tax was payable by non-residents but he also said that it was payable immediately the vessel arrived in Spain -- and he refused to budge on that point -- so I think we can regard my lawyer as 'unreliable'. On the other hand, he did research it and spoke to Almeria port so it is possible that he was party correct. We also have the EU rules.

What is really puzzling about all this is the lack of information leaflets or posters in marinas. You would think that the Spanish government has a duty to inform boaters that there is a potential tax liability. Indeed, that might be grounds for challenging any assessment unless fair time was given to remove the vessel from Spanish waters. One's argument might be that if this tax is known about then you would expect the marina to know; since the marina know your flag and how long you have been present, don't they have a duty of care to inform you that there might be a tax payable that also involves re-flagging the yacht?

Then finally, there is the situation where the owner had planned to take the vessel back to the UK in the near future...it would be madness to re-flag as a Spanish yacht and then back again to British. No reasonable person would expect that. So presumably there is a case for asking permission to leave rather than pay ISDMT and re-flag?

 

[Plomong]

Re: Story repeats

James,

The original, in Spanish, specifically states that "Disposicion Derogada", meaning it is no longer in force, so I think this decreto is old hat. In the 80s and 90s all this area of law was thoroughly revamped to bring it into line with modern practice and European laws and regulations, properly incorporate SOLAS etc etc, so I would be very surprised if this decreto was still in force.

Sorry about that.

Plomong

 

[JamesFrance]

Re: Story repeats

Hi plomong, yes I wondered if that was current. I found it after trying to read this:
http://www.boe.es/boe/dias/2007/11/16/pdfs/A46962-46987.pdf

On page 15 there is a reference to tourist registration so I searched for that.

I think that document probably contains the current law somewhere but there is a lot of Spanish to translate.

 

[Anonymous]

Re: Story repeats

This was from my lawyers in various emails up to 6/6/08

[ QUOTE ]
1. Regarding the obligation to pay the ISDMT after 30 days, this is strictly fixed in the Additional First Law Order of 38/ 92, 28th December, Special Tax. Where the ISDMT is regulated.

[/ QUOTE ]

[ QUOTE ]
1. At Almeria’s Tax office, in customs, they have confirmed that for tax purposes any boat which is found berthed in the harbour longer than 30 days has the fiscal obligation to pay the corresponding special tax, LIE, for certain means of transport.
For the payment of said tax, I understand that the point which might be of most interest to you besides the customs tax to pay, is the amount of said tax which, if the boat is longer than 8 metres, will correspond to 12% of your boat’s market value on the date of the presentation of the tax. i.e. if they carry out a tax inspection on your boat and you do not present the payment statement of said tax, they could sanction you with the corresponding fine which will be estimated according to the gravity deemed by the Tax office.

[/ QUOTE ]

[ QUOTE ]
1- The LIE (Ley de Impuestos Especiales or special tax law) is the law that regulates the IESDMT. In my previous email, while refereeing to tax to be paid for your boat, I am refereeing to the IESDMT and no other.

[/ QUOTE ]

[ QUOTE ]
In reply to your last email, firstly as I have previously indicated in my last email, I agree with your observations regarding the obligation to pay tax on a boat anchored in Spain for more than 30 days, but that is the law at present, and by this we understand that that is the reason why this tax is neither followed up or collected. However, another thing is the limitation of six months for registration of the boat, for which the tax must be paid in advance, and in this case there is a greater risk of inspection.

[/ QUOTE ]

[ QUOTE ]
4- In a way, I share your opinion, however the tax legislation is clear on this point. I understand that this could be one of the reasons why boats are not inspected by Hacienda, or the corresponding sanctions are imposed until more than six months have passed, when the boat is must be registered, prior payment of the IESDMT.

[/ QUOTE ]

[ QUOTE ]
3. Nevertheless, an employee at the tax office informed us of cases of yachts which have been berthed up to 3 years without legalizing their situation, i.e. the cases in which some boats exceed the time limit for the tax payment without being sanctioned appear to be quite usual. Obviously, our advice is always to regularize the situation of your boat by paying said tax and registering it in the Boat’s Registry.

[/ QUOTE ]

<span style="color:red">If he is right then this could be an entirely different ball game. This far I have assumed that he is wrong, but am having my doubts in which case I would owe him a grovelling apology.</span>

 

[Plomong]

Re: Story repeats

James

Page 15 (46975 of the BOE) "Disposicion adicional octava" appears to be the current modified version of the IEDMT, which was from Ley 38/1992. Thanks for the reference.

To fully understand the current situation, you would need to read Ley 38/1992 as modified by "Disposicion adicional octava".

I hope Lemain reads this, takes note of the 30 days, and the new sliding scale of percentages, previously understood by me to be a fixed 12%, but now obviously not so.

The genesis of this IEDMT is the old Impuesto de Lujo, later Impuesto de Matriculacion, as far as I know.

Plomong