Update on Spanish Taxes applied to Foreign Registered Boats

Created by sue. Last modified on 2008-06-07 18:49:45
Contributors:
Topic: European Union
Countries: Canary Islands, Spain

There continues to be great confusion about taxes levied on cruising boats making a prolonged stay in Spain. Information from different sources varies, and there does not seem to be one definite answer.

Many visiting cruisers believe that if they stay for a long period of time in Spain with their boat, they are liable to pay Spanish Wealth Tax, which it appears is currently being abolished. Whilst this may be true in cases where the boat owners have become Spanish residents, for the visiting yachtsman this tax does not apply. However, the tax to be concerned about is the ISDMT tax.

ISDMT (or Matriculation) Tax, is levied on boat owners who stay in Spain for more than 183 days in total (aggregate not sequential) in any one year. It’s important to note that this tax applies to the person, not the boat, therefore it is the days that you spend in Spain that matter - not the length of time your boat is there. It is exactly the same tax that people have to pay when they "import" (bring permanently) their family car into Spain because they have moved there.

If you remain in Spain for more than 183 consecutive days, then you are deemed as a “Spanish Resident for tax purposes” and all that this entails. This tax status includes re-registering your UK flagged boat to Spanish, which you must do. The ISDMT tax is the charge for registering the boat as Spanish.

Policing of the 183 days in a year is arbitrary, since there is no recording of entry and exit dates. However, if the authorities make a reasonable assumption that you should be taxed in Spain, it will be down to you to prove them wrong with suitable evidence. Having a house there as well as a boat will add greatly to the authorities' argument that you are now a Spanish resident.

Clearly there are a great many “foreign” boats sitting in Spanish waters for long periods of time, whose owners have not been landed with this tax. However, perhaps it pays to be cautious as being found out, could cost you dearly.

Implications of the ISDMT tax are:

• The tax rate is 12% of the value of the boat (except in the Canaries, Ceuta or Melilla).

• If you do not volunteer and pay the tax, you could be fined for every year you have not paid it plus interest on the non-paid tax.

• To become Spanish registered, the boat must comply with all Spanish regulations regarding certification, seaworthiness, equipment levels etc.

• The owner must show evidence of their competence to skipper a Spanish registered boat, by taking a Spanish skippers exam (in Spanish).

Nick Strong, himself a “foreign” cruiser wanting to find out more about the ISDMT tax, spent a great deal of time investigating the matter and produced an excellent website. “I have tried to put what I could find out on the ISDMT website, because when I ran across it, I could find nothing. However, it is quite clear from the YBW discussion forums and my own experience, that opinions vary, that implementation varies, etc. All comments and corrections are very welcome, especially the benefits of experience.”

Read discussions on this topic at YBW.com
YBW.com - Forum 1
YBW.com - Forum 2

Other Taxes
If you are keeping your boat for prolonged periods in the Valencia/Alicante area, then you may also have to pay the “G5” tax. This is a bit like harbour dues payable to the Department of Transport and Shipping. Any Yacht Club, or recognised marina, will collect this on behalf of the authorities in 2 instalments, you simply need to sign a form they will provide. The G5 tax varies depending on the size of your boat, however a 44 foot yacht will look at paying around 600 Euros a year.

Also note that paid VAT (IVA in Spain) status is important and might be checked by the Customs (Aduana).