There have been some blunt statements about the “24% withholding tax” charged on charter income in Spain. Some of these statements have not presented a clear picture of the real situation. • “Tax haven” has become a dirty word throughout Europe and many European countries, including France and Italy, have laws to make it difficult for companies to operate in Europe if they cannot prove that they pay tax somewhere in the world. Therein the reason that the Withholding Tax on income is applicable in these cases. However, Spain has double taxation treaties with many other nations and where these are in force, depending on the terms of the agreement, either no tax is due in Spain, or any corporation tax paid in Spain is then deducted from the tax bill in the country of domicile. However, in the majority of cases, if there is clear evidence of correct tax payments made in the country where the owning/operating company is domiciled, Spain will only demand that VAT be paid on charters which begin in Spanish waters, and defer demands for other taxes, confident that they are being paid correctly elsewhere.
Network Marine Consultants, along with our legal advisors, are experts at navigating non-Spanish yacht charter companies through these complex waters in the most cost-effective way.