Tax obligations for services to pleasure crafts


Derecho Inmobiliario y cuestiones Fiscales

If you are the owner (businessman or professional) of a pleasure craft or form part of a company rendering services of construction, maintenance and/or reform of pleasure crafts it is fundamental to be aware of the measures and tax obligations concerning the rendering of these services as per the Value Added Tax Law. Although concerning the Value Added Tax (IVA the tax payer (he receiving the obligation) is who carries out the delivery of the asset or rendering of service, according to article 84 of the law; there possibly could be a “reversal” of this person. The Value Added Tax was created in 1986 and reformed at an EC level in 1992 to adapt same to the interior European Union. The tax is controlled under the Law 37/1992.

Liability to VAT of a building, maintenance and/or reform of pleasure craft company

Taking as a starting point a linked enquiry, according to which the company enquiring carries out Works of construction, maintenance and/or reform of pleasure crafts for companies with tax and company address in the EU, we describe the liability to value added tax of the mentioned company. These Works are generally carried out in Spanish ports, the contracting company, in this case, the owner of the vessel. In its article 69, section one, number 1º, of the Law Ley 37/1992 are established the conditions in order that the services of construction, maintenance and/or reform of pleasure crafts are understood as being carried out in the territory where the tax is applied. So, is stated, that this will be recognised when the receiver of these services is a businessman or professional whose economic activity office address is located in this territory or that, by default, holds permanente establishment or normal residency in same. In the same manner, the article mentions the non tax obligation by he who renders the service:

"Not liable to Value Added Tax in the Spanish territory where this tax is applicable to services of construction, maintenance and/or reform of pleasure crafts, when the receiver of the mentioned services be a businessman or professional who acts as such and the company office of its economic activity is located in another member State of the EU, or holds in same a peranent establishment or by default the place of his address or normal residency, as long as these services are destinated to the mentioned office, in spite of the render or the services and the place these are carried out in be on the Mainland or the Balearic Islands".

The services carried out to businessmen or professionls located in another member State are considered as within the EC. As a result of this, through the investment mechanism of the member State where it is established, the tax payer becomes the receiver. On the contrary, they are subject to the tax when the economic activity, permanent establishment or normal place of residency of the receiver is located on the Mainland or Baleares, “in spite of where the render of the services is located and the place from where the services are rendered”. The article 70 includes that appearing in the article 19 of Rule 282/2011 of the Board in which is established the regulations to be applied of the Executive 2006/112/CE concerning the common system of the value added tax. The nature of the receiver will determine the condition of tax payer. Whereby “it will be considered that a tax payer, or juridical person who does not hold the condition of tax payer and be considered as such, that receives services exclusively for private means, including those of his staff, does not hold the conditon of tax payer. On the other hand, the render of services may consider that these are destinated to the economic activity of the receiver when “for the operation in question, the client has provided his personal identification number for VAT”.

The invoice should include minimum contents

The invoice that includes an operation subject to VAT must include the identification details of both parties, the name or company name and tax identification number of the parties in question; as well as the remaining details as per article 6 of Invoice Regulations, “without prejudice to those that may be compulsory to other effects and the possibility of including any other mentions”. Additionally, always when the amount and the type of the operation are included in the examples of article 4 of the Invoice Regulations, a simplified invoice can be issued. The minimum content is ruled under article 7 of the Regulation. Other information can be requested when the receiver of the operation be a businessman or professional and, so is demanded; or when the receiver of the operation is not a businessman or professional and, so is demanded, for the exercise of any tax right. In conclusion, only in the case that the services remain located in the territory where the tax is applied, the Consulting company (offering services of construction, maintenance and/or reform of pleasure crafts) would be subject to same and, as such, would have to issue the invoice with the corresponding rate of tax. According to article 22 section One of the Law 37/1992, “in the case that the services were subject in the territory of application of the Tax, the services would not be exempt from same”. This article leaves exempt from the Tax certain operations that, under no circumstance, would be applied to pleasure boats. We are near to you in order to solve any economic, financial and fiscal question: Palma Portals Nous Sóller Ibiza


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