How is buying a new boat in Italy through a Spanish charter company taxed?

When a Spanish company buys a new vessel from a shipyard or seller in another EU country, such as Italy, the way the deal is structured determines how much VAT is paid, whether it can be recovered and whether registration tax arises. It should be reviewed before signing the contract or paying the deposit.

VAT: intra-Community acquisition

If the buying company is VAT-registered in Spain, buying a new boat from an Italian supplier is normally an intra-Community acquisition of goods. It works as follows:

• The Italian seller invoices without VAT.
• The Spanish company self-assesses 21% Spanish VAT (IVA) on its return.
• That VAT is recoverable if the boat is used for the business, for example hire or charter.
• The company must be entered on the Registro de Operadores Intracomunitarios (ROI, Spanish register of intra-EU traders) before the purchase. Without it, the supplier cannot apply the zero-rating at origin.

Is VAT due on the deposit or advance payment?

No. Under Article 76 of Spanish VAT Law 37/1992, advance payments on intra-Community acquisitions do not trigger VAT. VAT becomes due on delivery of the boat, even if part of the price was paid a year earlier.

Registration tax: Impuesto Especial sobre Determinados Medios de Transporte (IEDMT)

The first registration in Spain of pleasure craft over 8 metres in length is subject to IEDMT. Vessels used exclusively for hire may be exempt (Article 66 of Law 38/1992). The exemption has conditions and requires prior recognition by the Spanish Tax Agency.

You also need to plan the boat's flag and registration and comply with local charter regulations.

What if the company also buys vehicles?

When the company buys a second-hand car from a business and the car is already registered in Spain:

• The sale is invoiced with 21% VAT.
• No registration tax is payable, as it is not a first registration in Spain.
• VAT on cars is presumed 50% recoverable (Article 95.Three of the VAT Law), unless greater business use is proven.
• If a shareholder or director uses the car privately, that use is taxed as a benefit in kind in their IRPF (Spanish personal income tax) (Article 43 of Law 35/2006).

Before you buy, check the company

A dormant company still has obligations from incorporation: Corporate Income Tax (Modelo 200), filing of annual accounts and, where applicable, VAT returns. Before a significant purchase, check:

• Tax registration (Modelo 036).
• ROI registration.
• That the company's objects include buying, selling and chartering boats.
• If the company belongs to a foreign parent, related-party transactions and how the purchase is financed.