Spanish ISDMT (Matriculation) Tax Problem

[vadrouille]

Heading to the canaries and the boat is to be based there for the next 5 years (hopefully) reading the pilot books it seems to be that if i have all the relevent paper work and in date safety equipment i should be ok. However in certain areas of spain they seem to forcing a isdmt tax/matriculation tax on you.


The boat is in my sole name, and as skipper, i shall not be in the country for more than around 120 days. I work in the merchant navy and will be flying back to the uk to work on various ships. it also means i need to keep a uk postal address (borrowing a friends) so i can stay employed.

From what i can read this tax is based on and inforced on how long the skipper is in the country (more than 183 days i believe) and not the boat.

so for me this should not be a problem.

But and there is allways a but!

My mum and my partner will be with me, they will be "retired as such" and they will live on the boat, even whilst im at work bringing in the pennies!

this means that they will be in the country for more than 183 days.

does anybody really know the sort of implications i may be getting involved in? Im basically trying to avoid this tax as it will be a pricely sum that we can not afford!

any help is greatly appreciated.

P.s im a new member and its my first post! :-)
my spelling is terrible to!

many thanks

[James S]

Welcome to the forum.
I have no first hand knowledge of how this works in Spain, but my BELIEF is that you/boat will be subject to tax.
We do have many members here who will be able to shed more light on this.

[vadrouille]

Thanks for the response James, I have now been told that to become resident we need a Spanish address. Which will be out of the question. I have heard so many different stories now that I just don't what to believe!

[goboatingnow]

If the boat has People living on it for a long time ie > 180 days, they will be classed as residents. The are in fact de facto residents and should apply for the spainish NIE. The boat will be subject to 12.5 percenta matriculation tax, but collection has been varied in the canaries. It was applied to some boats there recently.

It matters not that you are not there. The only way to escape such a tax is that the boat is unoccupied

Note that if the spainish tax authorities assess that this is your permanent residence (your mum and wife are there! this will be hard to argue against) and given that you intend to stay there a long time, it is likely that you will pay Spanish income and wealth/ property tax on your income.

What you are doing should be carefully considered from a tax and legal perspective. You could undertake a TOR( transfer of residence) process that allows you to establish yourself in Spain, bring the boat in free of taxes. but of course you are subject to income tax.

Be careful, what you are in effect doing is establishing residence, but not declaring income. The matric tax could be the least of your worries.

Dave

[Pblais]

As Dave points out there are both residency issues as well as boat issues. Some boat issues are only about the boat and where it sits and for how long. The same can be said for people. You are in the areas of Customs and Immigrations laws and rules that spill over into tax law. For the most part there are a large number of things that can place you in legal trouble as well as tax trouble.

For the most part being an illegal immigrant places you at a disadvantage. If by the numbers you act like a resident then you are subject to those requirements like any other resident. Wanting or not wanting to be a resident really is no issue if they say you are. Boat taxes can accrue even if they say you are not a resident but the boat just is some place long enough even with you gone.

You need a legal way to get around the law and the poor enforcement of the past is not a solid foundation if they decide they have caught you or your boat or your family. Any one of them could be the first issue that eventually gets you into all the rest. We have a long thread about a Dutch couple that did get caught in Spain.

The only solid advice is to keep moving on a regular basis. Legally it is the only real way you can be sure to avoid a problem. In some parts of the world it is 90 days others 180 days plus or minus. Leaving your boat empty avoids immigration law but not tax law.

I thnk Daves last advice puts you in a most comfortable position. You really don't want to be out on a ship when authorities suddenly take notice. They arrest your family and impound your boat and wait for you to come back knowing you have to.

[vadrouille]

What if I transfer ownership to my mum? She applys for residence, and imports the boat avoiding a tax. I still keep uk registration, and then my mum will be legal with the boat. (she does not need uk residence, although she will still keep her uk passport and I assume she could still do that even if she is Spanish resident, the same with my partner) My partner could also apply for residence but hopefully she need not do anything about the boat as my mum would import it.

I won't be a problem as I won't be in the country for more than 120 days I a callender year.

We do intend moving the boat every 4-6 months, possibly from island to island. The other possibilty is we go to gib for half a year and then the canaries for half a year. Even the algarve is a possibility.

I appreciate everyone's advice, I am rather concerned about this as I don't want any surprises along the way. Or un expected bills!

[goboatingnow]

Really this needs professional advice. On the face of it and you are not seemingly maintaining a residence in the UK ( a postal address doesn't count) and it's seems your family are present I would surmise that you will be judged a residence. If there is that risk. I would go through the TOR process as being caught for back tax and penalties will ruin your day.

As to the continuos cruising going outside Spain helps.

Ask yourself , where do you live and can you substantiate that claim ( house, kids in school , business interests , other property. Etc). That's the key. The matric tax follows on.

Dave

[vadrouille]

Originally Posted by goboatingnow

Really this needs professional advice. On the face of it and you are not seemingly maintaining a residence in the UK ( a postal address doesn't count) and it's seems your family are present I would surmise that you will be judged a residence. If there is that risk. I would go through the TOR process as being caught for back tax and penalties will ruin your day.

As to the continuos cruising going outside Spain helps.

Ask yourself , where do you live and can you substantiate that claim ( house, kids in school , business interests , other property. Etc). That's the key. The matric tax follows on.

Dave

I think the easiest and cheapest way to avoid "hassle" is as follows.

i do four months on a ship and normally get 2.5 months off, it seems to be that if i do a 6 month contract and then simply move country with the boat then i wont have a problem. We are now thinking of doing 6 month canaries, 6 month gib, and 6 month portugal. It looks to be the most logical as i dont want issues with money grabbing governments.

Its really annoying in a way, whats the point in being part of the eu if you cant freely travel around? I know you can up to 183 days but thats not that long in the grand scheme of things.

Has anybody got any experiance with gib? i would assume we should have no problem with the gib authorities? or is there some hidden expense there to?

as i understand with portugal, its roughly the same rule, 183 days and then cough up....

[goboatingnow]

Its really annoying in a way, whats the point in being part of the eu if you cant freely travel around? I know you can up to 183 days but thats not that long in the grand scheme of things.

You can " travel" for as long ad you want. The key is travelling. You can't live somewhere for a long time unless you are part of their tax system. The matriculation tax is only relevant after you are a resident.

Yes all other EU countries have similar rules and in certain cases boat taxes

Gib should be OK also remember that winter can stop your cruising plans.

Dave

[Pblais]

What if I transfer ownership to my mum? She applys for residence, and imports the boat avoiding a tax. I still keep uk registration,

I don't see the UK being happy to let you keep a boat registration for a boat your mom owns. Internationally speaking one registration per boat is the law and for 99% of the world you have to be a resident to have a registration and can't have one if you are not. It's supposed to make stealing boats harder.

If your mom owns the boat then the problem is solved for you but not her. She being a resident would be like anyone else. You not owning a boat are free and clear so it works for you. Since you do want to minimize your taxes (like all of us) you can't appear to be working a scam to evade taxes or they get mad and really give you a rough time about it. It's all got to look and be proper so in the end it's not a scam but just the way it really is.

Many if not most countries allow you to have more than one passport but Citizenship is not the same as Residency for tax purposes. Not related what so ever. You can be a UK citizen the rest of your life no matter where you are or live. Your boat can not even if it has a UK registration. It's not as bad as livestock so I hope there are none of those to deal with.

You are going to need to do the math and find the cheaper course to follow. It all has to sort out with the people and the boat. No quick fix. Dave charts an approach that probably minimizes the costs, but you need professional help adding it all up as there are costs up front, short term, and long term with any plan.

Don't let the clock run out before you get a plan. The calendar works when the tax man sleeps.

[Pblais]

The keep moving plan really works but you just can't stop. You have to move regular but if you can get enough places linked you could start some place and in a few years go back and repeat the cycle. You just have to get off the ship on time.

My friend was doing that and got a problem because the replacement for him had to be en route before he could leave. His boat did not have a problem but his wife wasn't happy. It means you could be stuck aboard for another trip and miss the deadline. You mom is going to have to totally understand what the game is so she can avoid raising attention. You don't want an official waiting for your time to run out.

[goboatingnow]

Just to add to pblais advice. Remember the 183 days is out of 365. Hence you can't return to that country for a further six months. If you do the counter starts up where it left off.

( there are some advantageous rules involving tax years and calendar years that need to be looked at country to country. )

It seems like an awful bother to me. Why not stay In the canaries, nice climate , good food and cheap to live, do a TOR and pay your income tax there instead of the UK. You should be able to claim your self -employed and there's good tax reliefs.

Dave

[vadrouille]

Originally Posted by goboatingnow

Just to add to pblais advice. Remember the 183 days is out of 365. Hence you can't return to that country for a further six months. If you do the counter starts up where it left off.

( there are some advantageous rules involving tax years and calendar years that need to be looked at country to country. )

It seems like an awful bother to me. Why not stay In the canaries, nice climate , good food and cheap to live, do a TOR and pay your income tax there instead of the UK. You should be able to claim your self -employed and there's good tax reliefs.



Dave

I cant do that, i allready pay tax in the uk. I would be jobless if i became spanish resident. plus, i will be out the country (the uk) for 6 months every year (the ships i work on are normally outside of the uk however the company is uk based), which means i will be able to claim my tax back...all of it if i remain english resident with my current job.

Moving country is not a problem, all three of us understand this situation as best we can. The long and short of it is if we stay in spain for more than 183 days we will break the law and be liable to hefty fines.

Regarding me getting off a ship, i come under the ministry of defence of the uk and thus im private sector. I will never have a problem geting off a ship in time. Infact, in the four/five years i have worked for them i have only ever done one complete four month trip!

Gibralter should not be a problem regarding any length of stay, we are british residents so staying in gib for longer than 183 days should not be a problem. (unless anyone else knows different) is it not only 5/6 days to the canaries from gib anyway? (no charts to hand) so to sail there and back everytime im on board wont be a problem.

Regarding the weather, it must be better than a uk winter for sure! i can assure you, sailing with snow on the decks at night in the english channel is not a pleasent nor exciting experiance!

again, much advice is welcome (currently reading another post regarding a german couple who got fined)

[Marbella Mick]

Reading though your situation I think that you should seriously consider Gibraltar as a base. I've had my boat there for the last two years without any problems - there's no hidden taxes and all procedures are simple to understand in English. If you choose to register here you can even have the Red Ensign.

By choosing an annual berth I got a 20% discount at Ocean Village Marina in Gibraltar plus saved much more by using the tax free fuel in Gib.

And there's always the weather - we spent six hours sunbathing on board on Nov 1st.

All in all I can't see why more people don't base there?

[GordMay]

Greetings and welcome aboard the CF, Marbella Mick.