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Spain: Yachting Protest over Matriculation Tax in Palma de Mallorca

By Sue Richards last modified May 02, 2011 11:08 AM

Published: 2011-05-02 11:08:22
Countries: Spain


At the Palma International Boat Show in Mallorca, the planned protest by all sectors of the Spanish and Balearic yachting / water sports industry reached a momentous level of volume at exactly 12.00 noon, on each day over the May bank holiday weekend.

Dozens of volunteers from the various yachting associations had spent the previous week handing out flyers and talking with yacht owners, professional captains and exhibitors at the boat show who were all really keen to join the Hoot to Boot (The Mat Tax) protest. And, as it turned out, there was no lack of enthusiasm for the action with hundreds of yachts taking part, and visitors to the boat show adding to the cacophony of sound with air horns, which were funded and distributed by various nautical association members.

Anyone who has visited Palma will know that the promenade Paseo Maritimo runs along the water front for several miles of seemingly endless moored yachts, literally thousands of them of just about every size and type from small local fishing boats (called Llauts) to megayachts like the 133 metre long Al Mirqab who has her home port at Palma's Club de Mar Marina.

Filling this huge bay from east to west with a noonday wall of sound, which politicians and the public simply cannot ignore, and doing it consistently for nine continuous days was an unprecedented challenge, which the local yachting industry seems to have risen to with gusto.

The whole exercise has already demonstrated the huge level of frustration mingled with a degree of genuine bewilderment, at the inability of successive national and regional governments in Spain to grasp some basic economic and commercial facts. IE: The unquestionable contribution that a fairly treated yachting industry can make to business growth, employment and generation of greater tax revenues. And just as importantly, being able to do it from its own internal free enterprise generated cash, totally without government handouts or subsidies!

As one observer from the industry commented to journalists at the boat show; "Its all very well to apply a luxury tax of 12%, but when you apply it to a boat which is by definition mobile at the turn of a key, or the hoisting of a sail...then it has a tendency to sail away from the tax liability to somewhere with a kindlier fiscal welcome!" "After all," he said; "12% of nothing actually works out at nothing, and any politician who cannot grasp that calculation, should definitely not be entrusted to represent the electorate."

Those very politicians have more reason than ever right now to heed the sound of the yacht horns and the message behind them, as the people of the Balearic Islands go to the polls on 22nd May to elect a new regional government for a new 4 year term. The protesters insist that the incumbent coalition of socialists, greens and nationalists headed up by president Sr. Francesc Antich leader of the left wing PSOE party, have ignored all the facts and figures, choosing to conduct a head in the sand approach to promoting tourism in general, and nautical tourism in particular. They say that this is even more frustrating given that the Balearic Islands are so uniquely and beautifully graced with perfect climatic and sailing conditions.

Another local businesswoman who runs a long established yacht registration business on the island said; "Believe it or not, we are still snowed under with enquiries for yachts to be registered here for commercial charter purposes. These are wealthy people who are more than happy to let a good chunk of their cash flow in to our economy, in order to have the relaxing and geographically accessible yachting lifestyle in such perfect conditions. They are even happy to pay the matriculation tax if they really have to, but they really have a problem with the totally arbitrary way in which it is being levied. For instance, there are absolutely no published guidelines as to how the yacht should be valued for tax purposes. Add to this the fact that they can, and do, come back at any time within four years of the first tax payment and demand more if they feel like it, and you can see that even the most adventurous entrepreneur yacht owner will not enter into a financial risk that cannot even be quantified!" She concluded;” With this amount of interest still being shown against the background of such punitive tax measures, it stands to reason that the flood gates will open and a veritable flotilla of large yachts will come to Mallorca and make Palma their home port if the mat tax is finally abolished."

A Spanish company director selling family sized motor boats at the Palma show said; "I would love to sell Spanish built yachts to my local and international clients, but this mat tax burden has killed off any development in Spanish boat building, until there are now only a handful of yards left with the necessary skills and resources to keep going. Where as, I can get dealerships for Italian, German, British and even Polish built boats with desirable models and prices all on good commercial terms. He went on to say;" The few Spanish yards that are still building, for example the Balearic based Menorquin who produce traditional style motor yachts, do have a great reputation for quality and sea worthiness. If only this business sinking tax could be removed for ever, I'm sure the skills base and investment could be regenerated, and we could proudly sell Spanish built family yachts again."

A boat show visitor passed by the press office and commented; ”I have brought my two young sons along after I heard about the protest on local radio and wanted to be here to show empathy with the cause. My family have always been recreational boat users, but its getting more and more difficult with such cumbersome legislation and heavy taxation, on what is basically a working mans hobby and free time relaxation. I want my kids to look forward to a lifetime of sailing with unhindered facilities and real government support, the same as we see in other parts of Europe. I'm just so happy that all the associations are working together to make that happen!”

By Peter Franklin. 2nd May 2011

The Balearic Nautical Business Association.

For noonsite articles on the Matriculation Tax see here