ISDMT Tax Crackdown for Liveaboards Begins in 2009

Published 5 years ago

Fist posted 9 January 2009 – with subsequent updates

See article, written June 2008, for background information on 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 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.

Whilst the central government in Madrid handed out the right to impose this tax on the regional governments in 1992, it has not been enforced until this year. And now it appears that the Valencian government, in particular, are very active in levying it.

Reports suggest that there is a current crackdown on the collection of this tax in Torrevieja (Alicante). The Guardia Civil have formed a separate division to collect this Tax, catching you on your boat and serving your papers. You will not be able to move your boat until the 12% tax has been paid, and you are required to pay the 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 boat life).

So far, the Guardia has only targeted the International Marina in Torrevieja, not the other two. Most of the people caught have been living in Spain (with their boats) for more than 183 days per year.

The implications of paying this tax, however, are not just about finding the money. 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. Plus – the owner must show evidence of their competence to skipper a Spanish registered boat, by taking a Spanish skippers exam (in Spanish).

This will likely cause a problem for those foreigners who do not have a good command of the Spanish language and undoubtedly it will mean quite a number of liveaboard cruisers will move on to “friendlier” ports.

Sail-World also reported on this matter today.

Please note – that anchoring in Torrevieja harbour is also now limited to one or two days only.

Comment sent by Frank Singleton on 19 January 2009

There is nothing greatly new in this application of the law in Spain. It has occurred from time to time in the past when people have tried deliberately to evade paying taxes.

Some years ago two Cruising Association members (Ted Osborne and I) wrote guidance notes for our members. This was on the open part of the CA website before the site was revamped. Our paper was written using readily available information. We stressed that, as far as we were aware, you became liable for Spanish taxes if you have spent 183 days in the country during any 12 month period. We made it clear that this referred to the people and not the boat.

In other words, if you live in a country long enough to be regarded as domiciled there for tax purpose, then you must be prepared to abide by their rules.

It is very clear that the two people “caught” were not doing so. This rule can be applied in other countries but the vigour with which it is applied varies greatly between countries and within a country.

Comment sent by Graham Hutt on 11 February 2009

An addendum to Frank Singleton’s remarks regarding tax on yachts in Spain.

He is correct in theory. The tax applies to that resident in Spain or considered fiscally resident because they are there for more than 180 days per year. But in fact, tax authorities are taking action to impound yachts when the owners are clearly non-resident and when the yacht has in some cases been in a Spanish port for a very short time.

This happened to my yacht when it had been in Spain for a short while. Whilst they agreed it was not liable to the tax, the implication was that I needed to get a lawyer involved at great expense in order to clear the situation. This has been the case for several owners.

Several thousands of yachts have apparently left Spain in the past few months because the law seems unclear in its application. No one objects in principle to paying tax when it is due. But to assume everyone owes tax and needs to have a lawyer prove a negative is very difficult and expensive.

Graham Hutt

Further information received 12 February 2009

It has been reported to noonsite that Spanish customs authorities are sticking “precincts” on yachts before ascertaining the tax liability of the owners. (This is a sticker that states that the yacht has been impounded and forbids the owner to come aboard).

It also seems that there is no limit in principle for an EU owned yacht being kept in Spain for any length of time, providing the owner himself does not exceed the 180 days limit. However, despite this, it appears the customs authorities are acting first and then leaving yacht owners in an almost impossible predicament – to get out of the trap they should not have been caught up in, in the first place.

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