Total Confusion in Spain, but an end to Matriculation Tax now looks certain

As reported in March on our web site (http://www.pelagosyachts.com/SpanishMatriculationTax.htm) the end of Spanish Matriculation Tax now looks certain.

This follows the decision of the EU Commission to declare the tax as unlawful. The Commission has deemed the taxation of charter vessels from other EU registries unlawful, as it infringes upon the principle of the freedom of provision of services, as outlined by the EU Court of Justice.

EU Commissioner Algirdas Semeta announced at a press conference that any future rate of taxation should be proportional to the duration of use. Spanish tax authorities have already responded to the ruling, outlining their justification for the tax, and they are now awaiting the Commission’s response, which will identify why it considers Spain to have failed in its obligations as an EU member.

The issue was brought to the Commission’s attention in the form of an official complaint by MEP, Rosa Estaras, a member of Partido Popular, the centre-right party tipped to take power in the upcoming Spanish election. Estaras said of the news: “[It] prevents the development of charter yacht activity in Spain and means they are not on an equal footing with the rest of the EU. [It also] violates the principles of freedom of movement of persons, and freedom to provide services to maritime transport.

The irony of the situation is that the autonomous Spanish region of the Canary Islands, unilaterally abolished the tax for all vessels registered commercially in the Canary Islands in February 2011. Our concern at that time was whether or not this action would be recognised throughout the rest of Spain. Reports we received since then suggest that the move by the Canary Islands was not recognised by the central government and that some yachts from the Canaries were seized and detained in Spain for non payment of the tax. That inconsistency of taxation is obviously unsustainable and the decision of the EU Commission may overrule the domestic argument by finally outlawing this restrictive and unfair tax.