Torrevieja and ISDMT Tax

Grehan

Grehan

Well-Known Member
Joined
11 Jun 2001
Messages
3,729
Location
Inland France + Oxon.
www.french-waterways.com
I'm passing on some information I've received over the last few days, from somebody there right now and, unfortunately, at the 'sharp end'.

1) Anchoring the harbour is now limited to one or two days only. (probably most of you already know this change from what used to be)

2) There is a current 'crackdown' on the enforcement and collection of ISDMT Tax. *For a definition of what this is, see below.

The (I assume, local) Guardia Civil has formed a separate division to collect this Tax, they catch you on your boat, then serve you papers, you are informed you can not move your boat till the 12% tax has been paid, you are required to paid this money within 4 weeks or further action will be taken.
There have been over 10 boats that have been served the papers, each boat has paid the 12% tax (of the value of the boat, minus a sum for each year of the boats life). The Guardia has only targeted the International marina, not the other two. Most of the people caught have been living in Spain (with their boats) for more than 182 days (in cummulative - not sequential - total) per year.

". . . Once the weather improves, there will be large scale movement out of Spanish waters from this marina . . . " /forums/images/graemlins/frown.gif

*ISDMT is specifically about persons (themselves deemed to have become domiciled) (by virtue of the 182 ? days rule) deemed to have 'imported' a mode of transport into Spain. Most usually cars and vans, less usually, boats. See www.tagweb.co.uk/isdmt
 
Very interesting and somewhat worrying.

BTW do you happen to know what the reduction is for each year of the boats life, presume this is a percentage thing. Also who values the vessel?

Would be grateful for this information.. Many thanks.

Happy New Year to you! /forums/images/graemlins/grin.gif
 
No concrete or reliable answers.
i) Who values? I guess, like the Inland Revenue "They" (Guardia/Aduana) make the valuation and it's then up to you to counter or provide alternative evidence that they may or may not accept.
ii) What (baseline or "original") Value? Price when new, price when bought . . or . . . what the Aduana think it (was) worth . . .
iii) Adjustment for age (depreciation). -

[from my ISDMT website, roughly translated from the Law]

" . . . The normal tax type for new means will be of 12% of the tax basis.

The tax basis of used means of transport will be constituted by its value of market in the date of accrued income of the tax.

The tax type of used means is the following one:

1-2 84
2-3 67
4-5 56
5-6 47
6-7 34
7-8 28
8-9 24
9-10 19
10-11 17
11-12 13

more than 12 years 10

[Editor's Note : It is thought that this table refers to the depreciation of value over time - for example a 'transport' 5 years old would have its value depreciated to 47% of the original] . . . "

Yes, Happy New Year, Ziggy!! /forums/images/graemlins/ooo.gif
 
What about EU rules re freedom of movement of persons / property?
"Deemed to have become domiciled" - apart from extremely itinerant yotties, many will be able to prove domicile elsewhere.
"imported' a mode of transport into Spain" - bike, skis, skateboard,wheelchair, WTF even feet!

Any Spanish legal eagles out there?
 
Yes, it got high jacked, or rather drifted because a number of people were unable to differentiate between the issues. There is no "crackdown" on people legitimately keeping their boat in Spain if they are resident for tax purposes eleswhere. There may, however be difficulties for some people in proving that they should not be tax resident (liveaboards, for example).

If the individual does become tax resident then the tax applies to his boat and he has to re-register as a Spanish boat which also means he has to obtain a Spanish licence unless he can gain exemption through holding a recent RYA Yachtmaster certificate. You can understand why some people might want to avoid all this!

It seems that the law is enforced with varying levels of rigour as it is the responsibility of the regional government. Valencia seems to be the region that is most active.

Where people seem to get confused is because the freedom to navigate in coastal state waters is covered by the UN Convention of the Law of the Seas. It is nothing to do with EU freedom of movement. The tax is a sovereign matter for the Spanish authorities and applies equally to Spanish as well as non-Spanish tax residents.

Inevitably the thread drifted to VAT because that in theory affects everyone, although in reality many concerns are grossly over exaggerated.
 
Tranona,

Yes, exactly right, but thse rules are lightly wider in scope than some people imagine.

Throughout the EU, if anyone spends more than 183 days of the whole year in a single country, they become tax resident in that country. In some countries this is counted over a tax year, in other countries a calendar year.

Of course, there is no official means of counting the days (passport stamps etc) but the authorities are perfectly entitled to assume that you've spent the time in their country (which might be UK!) if you keep accommodation available there (house, caravan, boat). They will then reasonably say 'prove you were here less than 183 days'.

Get those air tickets out, credit card slips etc etc . . . or accept that you are tax resident in that country.

Which brings all sorts of little surprises - like - your car, caravan, motor bike, yacht all have to be registered in [new country] and you have to meet all the rules and regs of that new country with respect to those items. Including, in some countries, an annual tax based on capital values. Understandably the countries which have a wealth tax provision are keenest on chasing tax residence rules. And those that don't couldn't care two cents, centimes, lepta, pence, groschen . . .

Advantages? Well, you're no longer taxable in [old country] on income arising outside it . . . pity about the pensions though!
 
I should make it clear that "deemed" is my own terminology. As JimB has noted, if you 'are' within Spain (I cannot comment on any other EU country, but maybe the 'rules' are similar if not identical) for a period of time - and have your boat (or car, or other means of transport that falls within the ISDMT rules) (so no stuff about jetskis or wheelchairs etc ha ha ha not very funny Doctor Jones) with you, then you are potentially liable for this tax. The period of time is (appears to be) counted cummulatively (i.e not a continuous sequence of time - so nipping off to France and then coming back does not 'work') and, it has been suggested, is 182 days, alternatively 183 days, or 90 days, or . . . In other words no-one is quite sure.
This has nothing to do with freedom of movement, or VAT, or Wealth Tax, or Regional Tax, or harbour tax, etc etc. I personally do not think it is specifically to do with ordinary taxation domicile, although it may share the same parameters. This is a particular law, with particular application.
A big problem, apart from the very inconsistent application of the law, is that there are no "Spanish Legal Eagles" out there. That know anything about this. I wish. When I was out in Andalucia I consulted three. One was a specialist in maritime customs law. The other was a lawyer with a long family background in marine boating - hire, sales, etc etc. The last was a long established English taxation expert (that is, an English expert in Spanish taxation). All three useless, but not really their fault (except the fact that they're Spanish and Spanish lawyers are not to be trusted, in the main) since up until now (maybe) the ISDMT law (which has been on the books for years) has been enforced widely to motor transport 'importation' but not much towards - cruising, yottie, liveaboard - boats, so nobody's got much experience (if any). I think Lemain had the same experience. (and maybe that's why we're both not in Spain any more) I guess that's why the Guardia have formed a special squad in Torrevieja. First week spent learning what the law says and then deciding how they're going to interpret and apply it.
Which is what is happening right now, in Torrevieja.
12% of the depreciated value of your boat. Plus interest on the tax you should have paid 'back then', but didn't. And a fine for not 'declaring'. Then your boat 'becomes' Spanish. So you have to formally register it in Spain. And so it has to comply with Spanish regulations. And so you have to be qualified, Spanish style, to operate it. Take a test in Spanish, no interpreter allowed. These are the clear 'knock on' implications (I'm not sure if anyone's had to face that full panoply, but . . ).
/forums/images/graemlins/confused.gif
 
Errrm. It is 183 cumulative days over a year. Which, being just over half a year (except on leap years) means that you can only be regarded as tax resident in one EU country at a time. The leap year conundrum is solved by counting your travel days as full days of residence . . . at both ends.

It is, of course, possible to spend less than 183 days a year in any one country (try three or four). But you'd have to prove it.
 
Yes, it does seem confusing, particularly the inconsistency of implementation. The actual tax does not seem onerous, particularly for older, lower value boats. The requirement to register your boat as Spanish and the skippers licence is more problematic. However, I understand that they will accept a recent RYA Yachtmaster instead - which should be good business for the Spanish based sailing schools!

The people most likely to be hit hardest are those who have chosen to live the "live aboard" lifestyle as a way of escaping the negatives of a more conventional lifestyle and either are unaware of the tax, or who are aware but choose to ignore the fact.
 
I am not in the least bit surprised at the enforcement. We had feedback on this forum back in April/May that instructions had been sent out from Madrid to enforce this tax.

The ISDMT is a 'special' tax on 'vehicles'. A yacht is deemed to be a 'vehicle'. The present rate of tax is 12% on a value determined by Aduana (customs) and seems to be, to an extent, negotiable. However, if you are sailing in a fairly modern quality yacht you might be in big trouble as the brokers are showing prices near to new prices in some cases. For unknown makes -- e.g. steel yachts -- people manage to negotiate very low prices.

The tax is levied on people who are resident in Spain and who have a yacht in Spanish waters. If you have spent more than 183 days in Spain in the current calendar year you are deemed to be resident. Forget terms such as 'tax resident' and 'domiciled'. 183 days = "resident" for this purpose. They might expect you to show where you were at specific times if your case is borderline -- show credit cards, tickets, etc.

A resident is required to declare and pay this tax within 30 days of importation. Failure to do so might result in fines. Claiming ignorance of the law has in the past been sufficient to avoid fines, but not the tax itself.

You are likely to be approached by two people dressed in civvies, smart but casual. They will ask you lots of questions and fill in a form. They will give you the impression that you have nothing to worry about. These people are inspectors, not assessors. You can ignore what they tell you or any promises they seem to be making. Their duty is to feed back the facts to the assessors. The inspectors might put an embargo on your boat to prevent you from leaving the port. This is called a 'precinto'. 'Precinto' means 'seal' or 'sticker' in Spanish. Some Brits are under the delusion that they could simply slip away under cover of darkness. Having spent four years cruising in Spanish waters, I doubt it. The Spanish are neither stupid nor poorly-equipped. Some weeks after the visit from the inspectors, you will receive an assessment. This is the time that many people break down in tears, having no funds available to pay. It is a truly dreadful situation. There are thousands of Brit yachts in southern Spain who have been there for years, with totally-resident owners but undeclared. Most of them are doing an 'ostrich'.

We left Spain for Italy last May to avoid this problem and if we go back we will alternate between Spain and other countries every six months to avoid the 183 day rule.

The vessels leaving TV need to leave Spain, as the problem will be all along the coast from Barcelona to Gibraltar and La Linea.

Remember, it is 183 days cumulative in any year for YOU, not your boat. Leaving Spain does not reset any clock. If YOU have been in Spain for 183 days then you are resident (for these purposes). If as a resident your yacht is in Spain then you need to declare it within 30 days.

Now for the bad news...........

Having paid ISDMT they will expect you to reflag your yacht to the Spanish flag. The cost of doing that is probably greater than the cost of buying a brand new yacht.
 
I was wondering if alternating between countries might work, as you say.

Just by way of example, 120days in each of South of France, Spain and Italy. Or 180 in Spain and Portugal with a few days stop over in Gib.

Apart from not settling in one place, what would be the downside to this? Medical treatment springs to mind, but let's not open up that can of worms again !
 
[ QUOTE ]
The leap year conundrum is solved by counting your travel days as full days of residence . . . at both ends.


[/ QUOTE ] I don't know about other countries, but the in the UK it is not days that are counted but midnights. So you can fly in one morning then out in the evening the next day having done two days 'business', but it is only one midnight. Conversely, if you fly in one evening, stay all the next day, and fly out the day after, that is counted as two days even though you could do 'business' on one of them.

This might sound rather pedantic, but it can make a difference if one is coming and going alot - like the exceptionally rich who might live in Monaco with offices in London, for example.
 
In France you have to pay a tax each year for a French registered boat. If you are resident in France and have a foreign registered boat, you have to pay a "passeport" each year for your boat. This is an amount which is equal to the tax for a French registered boat. It ranges from 92 euros for 7-8m up to 573 euros for 12-15m and 1108 euros for more than 15m. I think if the boat is over 24m there are special rules.
Then there is an additional fee depending on the French fiscal CV of the engine (as there used to be for cars). This ranges from 13 euros per CV to 57.96 euros per CV for big engines. A normal yacht engine of about 2 litres capacity (CVs are proportional to cylinder capacity - nothing to do with power) will be about 8 CV (which just falls into the 13 euros per CV category). These taxes are per year.

A lot of french people register their boats in Belgium. There the rules about required equipment (liferafts, flares, radio etc) and qualifications to drive are considerably more lax (or pabe even non existent). I also suspect that they may escape the "passeport" for some time.

Different country, different rules.
The UK counts as a tax haven in many peoples eyes!!!
 
Thanks for the information and I am aware that a number of boats in France are becoming Belgian!

At the risk of being overly or unnecessarily pedantic (apologies if I am) . . . ISDMT has nothing to do with registration or country of registration per se, it is about being in a country for a period of time, with a means of transport (e.g boat) that will as a result be deemed to have been imported, which importation attracts a tax. etc.

And thereafter comes the registration stuff.

I wasn't aware of the Yachtmaster qualification being accepted in Spain (as an equivalent substitute for Spanish credentials). Is this truly verified, rumour, or perhaps a local 'accommodation'?
 
Quite right about the French system, it is all explained in the Bloc Marine livre de bord annual.

This is what I put in the Mobo topic:

[ QUOTE ]
The 12% tax applies when a Spanish resident registers a boat.

A Spanish resident is someone who resides in Spain for over 182 days in a year. They are then liable to pay all taxes levied by Spain on their worldwide income, their wealth and any other taxes which apply to a tax resident. There is no choice, it all depends on the length of time spent in the country.

I am now tax resident in France, so needed to check these things out carefully.

I would suggest that the easiest way to prove that you have not overstayed would be to keep something like a creditcard statement which would show your location throughout the year.

[/ QUOTE ]

So I would think you could expect a visit from the Spanish tax inspector once identified by the Aduana.
 
[ QUOTE ]
I was wondering if alternating between countries might work, as you say.

Just by way of example, 120days in each of South of France, Spain and Italy. Or 180 in Spain and Portugal with a few days stop over in Gib.

Apart from not settling in one place, what would be the downside to this? Medical treatment springs to mind, but let's not open up that can of worms again !

[/ QUOTE ]I don't think that medical treatment is a can of worms...it is pretty clear what the rules are and it is pretty clear that for the time being most people are not asked to make a formal declaration -- i.e. as an EU citizen with a UK passport they tend to treat you as if you are a tourist. May that long continue, but we cannot bank on it. The French in some parts are very careful, as we have all heard though I continue to hear of cases in Spain where even very long-term non-registered Brit residents seem to be getting medical treatment with no questions asked.

With regard to moving about, from the NHS perspective, it doesn't matter where you go once you leave Blighty. You are (technically) disqualified on day 91. If you don't stay in any one country for longer than 183 days then they don't have a legal basis on which to treat or tax you as a resident. If you have right of abode in the UK (paying your UK taxes seems not to count) then you can always become UK resident on the dockside, having disembarked from the Queen Mary. You could kiss the ground, grovel and do all manner of things but the key thing to do is to say that you are resuming your residency in the UK, as is your right, on a permanent basis. Then you can potter off to a hotel room, if you like. You don't need to own a property or stay with anyone in particular. I suppose you could sleep under a bivouac in the local park?
 
My information on the acceptance of the Yachtmaster came from a UK resident in Ibiza who was considering having a Spanish registered boat. As to whether it is normal or a local accommodation, I don't know - partly because his certificate was more than 10 years old and he did not pursue the idea.
 
[ QUOTE ]
The people most likely to be hit hardest are those who have chosen to live the "live aboard" lifestyle as a way of escaping the negatives of a more conventional lifestyle and either are unaware of the tax, or who are aware but choose to ignore the fact.

[/ QUOTE ]

And that is the nub of the issue. Genuine cruising folk should not be much affected by this tax as they would be unlucky in picking the very marina or anchorage when the thought police decend. I do not believe that the Spanish are after the bone fide cruising couple enjoying their gentle retirement.

However, IMO, if you want to spend 183+ days in Spain, you should be prepared to pay the calculated tax. If you don't like that and think it unfair, either swallow the anchor and buy an apartment, cruise on to the next country or come back to blighty and complain about it to uninterested scrotes in the pub.

In the meantime, if you insist on being one of those drinking cheap brandy 24/7 with rusting bicycles and outboards hanging from the rails of your slowly rotting home moored in San Antonio; be prepared for a visit - coz it is you that they are after.

I wonder what we would say if a load of Spanish itinerants anchored their craft on the Lymington River or Poole Harbour year after year.
 
I think you are sort of right. I don't think that they are very interested in Slowly Rotting in San An. because Mr Rotting hasn't got two brass farthings to rub together, has his children in the local school and is working on the black in odd yards when he can find work. Mr and Mrs Rotting are, actually, great people to get to know. They have five lifetime's experience and anecdotes to share, and Mr Rotting can do things you wouldn't imagine possible, certainly not at his age, anyway.

Anyway, there, but for the grace of God, rots you and me.

Aduana are after the Notyet-Rottings. The Notyet-Rottings probably still have a home in the UK and a small pension or two. Beware, Mr and Mrs Notyet-Rotting...they are out there. Move on before they take what you still have left. Once they get their claws into you on their terms they will take everything they can. If the boat will still sail, leave Spain in her. France, Morocco, Gib (expensive as no anchorage now but you might hide in La Linea). Jump from one administration to another (that'll delay them). Portugal is a possible. Otherwise, just get yourselves out of the country for long enough to prove that you are not residents. They say that Greece and Turkey are good. I don't know. Italy is expensive and France is full of French, which makes that less attractive.

We were warned four years ago that this was going to happen, yet the rump of the British 'Slowly Rotting' community are sitting there with heads between legs, buried in sand. "Don't TALK about this"..."keep your heads down and KEEP QUIET".... we were told when we first arrived in Med Spain in 2005.
 
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