Questions of VAT: Mallorca
Published 21 years ago, updated 5 years ago
I kept getting different information regarding VAT at every turn. In addition to general guidelines for VAT exemptions in the EU generally, each country has its own rules.
In Spain, apparently, the regulations regarding VAT exemptions are written in such an ambiguous manner that each port in Spain interprets them differently. To add to the confusion, the head of Customs here in Mallorca changed three months ago and she is interpreting and enforcing the regulations in a much stricter manner than they have been in the past. There is some controversy going on now even within the port authorities themselves, which may change things again.
So here is Mallorca’s current views in response to my questions:
Q: How long can a boat remain in bond?
Apparently, there is no problem with a boat remaining in bond for up to 2 years consecutively. After that, it must be removed and then rebounded, but this can effectively be done forever as long as you are not out of bond for more than 183 cumulative days in any fiscal year.
Q: Does lay-up time count?
It may or may not, so the suggestion is that anytime the Owner (“beneficiary”) is not on board, put it in bond.
Q: Given the exclusive use of beneficiary clause, is there a problem with crew or caretaker?
Not at all.
Q: Is the bond a strict bond in that no one can board the vessel at all?
No, it would be expected for crew and workers to come aboard, but you should give the authorities notice if you are moving the boat from one place to another, but they would not consider that necessarily breaking the bond.
Q: What is needed to get out of bond?
If it was recently put into bond, probably just notification of your intention and they give you a release. However, in light of the new interpretations, some boat properly put into bond before the past 3 months may find their files are not “complete” by the new standards. I heard of a boat that was put in bond in November 2000, as it had many times before, and when he went to get it out was told that he had to give 72 hours notice and provide them with the “rest of the paperwork,” which amounted to the original and one copy of the documentation, and the original and one copy of the Beneficiary’s passport (or copy certified before a Notary or Spanish Consulate in the case of an absentee Beneficiary). Of interest was that no insurance proof is requested or passports of anyone other than the Owner/Beneficiary.
Q: Can I get a copy of the actual regulations?
Yes, it exists, but only in Spanish.
Q: What about the local use tax, Tarifa T-0 or T-G?
There is a HUGE controversy over these taxes which are basically for navigation, lights, etc. Apparently, IF they are levied, they will be levied by the individual marinas. All marinas are supposed to collect them but many refuse! Club del Mar, for example, is supposed to collect it but has hired attorneys and fought it in the courts for years. The result is that the Port, as an inducement to get Club del Mar to collect, is offering the Club a commission on all fees collected. Club del Mar still refuses! Other marinas are using them as an example. Some collect. Go figure!
Q: Where else do people get into trouble?
The captain must be a non-EU citizen. This was not always so, but in the past, some EU citizens have tried to bypass the VAT by having the boat owned by a non-EU corporation and they have been designated as the captain. Now, if the captain is an EU citizen, s/he must not only be licensed but have employment contracts, etc. and that is not a guarantee that Mallorca will accept it.
Q: Spain is much more lenient in its attitude toward VAT exemptions than other countries such as France. Have you heard any recent horror stories?
France has certainly been a problem recently. A boat bought by a non-EU citizen in the EU and being transported out within the 6 month period is VAT exempt. A boat was bought in Italy and being shipped from Spain within the 6 month period, but the ship was delayed. The boat just cruised around without stopping anywhere to kill time and not have to enter a country until it was time to be transported. It was stopped by French authorities that fined it quite a lot of money for several odd things, like not having a log book.