Living on Board in Spain...Be Warned !
For those who set off to live the dream, sailing their own boat around the shores of the Mediterranean, an article published on this site a few months ago gave an eye opener on what could be expected...
This article concerns a worrying and growing trend in Spain that could cost you your boat if you are not very careful...
Generally most people who set sail are trying to get away from the humdrum daily grind of life in the UK. Council tax, heating bills, cold weather and stifling bureaucracy are the sort of things any free-spirited person can do without. Add to that being always watched by big brother state (there are more CCTV cameras in the UK per head of population than anywhere else in the world) and disembodied voices constantly giving you instructions while on the public transport system... it all adds up to a depressing Orwellian nightmare.
Most people who set sail on their own boat with the intention of living on board are trying to get away from all this nonsense, with the intention of living their lives in a warmer climate with cheaper living and less bureaucracy, and being the master of their own destiny.
It is often blithely assumed by many potential liveaboards, that because they are EU citizens they can move around freely between all the EU countries staying as long as they like so long as they don't start working, claiming any kind of benefits, or using the local public health service.
NOT SO !
Spain has always been a very popular destination for live aboard cruisers. It has a magnificently long coastline, beautiful islands, and up till recently very reasonable prices (not so any more... just as expensive as the UK). The weather for the most part is good, the way of life convivial, the locals mostly friendly.
It should be noted however that the Brits in general do not enjoy a very good reputation in Spain anymore... the excesses of the package holiday crowd have led many Spaniards to believe that the British are always drunkards... and when they're not being loud, objectionable and drunk they are always trying to take over everything, working on the black, and generally behaving in a piratical manner.
It is sad to see the change in attitude of the locals... and who knows maybe the Brits deserve the reputation they have. What is going on now is affecting ALL foreigners spending time on their boats in Spain, not just Brits.
Those who have been sailing in and out of Spain since before it was in the EU will have seen the country change from a basically pastoral and fishing economy to one based on tourism and property, property & more property. Furthermore power has devolved more from central government to autonomous local governments, who's ideas concerning the application of laws can vary enormously, and who's coffers are being drained by the slump in tourism and building. Add to that the rampant corruption concerning building permits on the Costa Del Sol and the Balearics (the Mayor of El Eijdo and all his staff were recently arrested and thrown in jail), many autonomous regions are absolutely penniless with unemployment running at over 20% !
Looking for a way to top up their coffers with minimum hassle, whilst not annoying the local voters, they have turned their attention to the marinas around their coastlines and the easy pickings therein.
Pay particular attention now because it could mean the difference between you keeping or loosing your beloved boat.
The law is very clear on this matter and it concerns you rather than your boat. The Spanish tax year runs from 1 January to 31 December... during any Spanish tax year YOU are not allowed to spend more than 182 days in Spain, or de facto, you will be classed as a resident
for tax purposes.
It doesn't matter whether you fly or sail out of the country for a while and return... it is the total number of days that you have spent in Spain during their tax year that counts, if it amounts to more than 183 you become a resident as far as they are concerned... and if they pick on you it is down to you to PROVE that you were elsewhere.
This is basically an EU wide law, and the Spanish are perfectly within their rights to apply it... the implications for the live aboard boat owner staying in Spain are enormous.
Until recently it was virtually unheard of for this law to be applied to anyone unless they were working illegally or making a big nuisance of themselves. Many yachties based in the Med are blithely unaware of what could, and increasingly is, happening to foreign liveaboards who choose to spend some time (and spend their money) in Spain.
The implications of being declared a tax resident of Spain are enormous, and could well result in you losing your boat if you are not prepared. The "let it be attitude" of the past is changing as a direct result of Spain's financial misfortunes, and is likely to result in droves of boatowners abandoning Spain altogether.
The purpose of this article is to give you adequate warning of what could happen (and is increasingly happening right now) to boat owners who were unaware of the implications of remaining in Spain for more than 182 days in any tax (calendar) year.
The first you are likely to realise anything is wrong is when you return to your boat from a visit home, to find large luminous stickers saying your boat is sealed and may not be moved (Precintado). This may (or may not) have been preceded by a visit by polite and seemingly innocent plainclothes Guardia Civil, who ask many questions but assure you everything will be all right and there's nothing to worry about...NOT SO.
Once they have made up their minds that you (not necessarily your boat), have been in Spain over 183 days during their tax year, they've got you. Your boat is sealed you are unable to move it (don't think you can sneak off... they got faster boats than yours, and harbour staff are under instructions to report you should you move it).
Next comes the demand for money... 12% of the boats assessed value. This is NOT as horrendous as it may seem, as the value of the boat is depreciated by the age of the boat and other factors... in fact that 12% that you may be asked to pay is not likely to be a ridiculous amount. HOWEVER they have a habit of sticking these "Precintados" on your boat when you are out of the country (obviously they are sneaking around trying to avoid a confrontation). The fact is however you have four weeks to pay or dispute that 12% bill, and if it is not paid within four weeks a fine starts mounting up. By the time you find out what's happened, 4 weeks is passed, you've got the bill and a fine.
To make matters worse if you've been illegally lurking around in Spain (remember the onus is on you to prove that you havn't) for a good few years they will fine you for every year that you've been there. Furthermore Spain has a wealth tax, that is applied yearly on the value of everything that you own (including your boat and other assets even if abroad), and they will be after that too. For someone who's boat has been in Spain for many years, and who tends to spend more than half the year there, the bill and the fines are enormous.
If you can't pay they take your boat and sell it... all legally.
Finally to add insult to injury, a Spanish tax resident is not allowed to skipper a foreign flagged vessel... ie you are not allowed to sail your own boat. It needs to be re-flagged as a Spanish vessel (lots more money and tax), and then you will need to take the same exams as Spanish Nationals (in SPANISH) before you can get a license to sail your own boat. This involves yet more money, and will involve you having to learn enough Spanish (including 200 nautical terms), to pass their exams.
Many yachties have spent plenty of time and money in Spain being totally unaware of what could happen. This is not something new however, BUT it is something that is suddenly starting to be applied all around. Up till recently anecdotal evidence suggested that it was being applied and enforced on the following categories of people:
1) Those who run some kind of business... chartering, boat maintenance etc.
2) Those who are known to be doing some work on the "black".
3) Those who have remained in one place too long and taken root.
This does not mean that it can't happen to you, there has been a case recently of it happening to someone who had only overstayed by a few days and evidence seems to suggest a more general clampdown is now in progress.
Further anecdotal evidence also suggests that after a purge, so many boats leave the area that the authorities cease their activities for a while. This is not good for their welcoming tourist image, it's also not popular with the marinas who've been affected and stand to loose custom...rapidly.
The general consensus amongst foreign yachties wintering in Spain, seems to be keep your head down and don't talk about this in case it attracts attention. Our advice... know the law and keep on the right side of it... remember the onus is on you to prove that you haven't been in Spain for more than 183 days in any tax year. These CCTV cameras are in Torreveija, they're watching you.
WE intend to bring this to your attention BEFORE you decide to spend any time in a country that applies its laws in a seemingly haphazard way, almost calculated to drive yachtsman and their money out of the country. Either they want people to spend time and money in their marinas and shops, or they want to grab tax money from them (which they are perfectly entitled to do.. take note). It seems the pendulum is swinging more towards the latter with the country in such a horrific financial mess. Massive unemployment, and banks literally disappear overnight (seen this one happen ourselves... one day it's there complete with cash machine, next day completely disappeared as if it had never existed... no notices, no evidence of a bank ever having been there !)
These problems seem to be manifesting much more quickly themselves more in some areas than others. Torreveija, (Alicante), Malaga and Almerimar, Almeria have all been targeted... be warned.
Below are some links to related horror stories. It is not a new subject altogether, and there will be found plenty of information within the online forums. The reason we bring this up now is because it is beginning to look like yachtsman, (being soft, easy, and non-Spanish targets) are being milked for easy tax money. The longer term effects on the Spanish yachting and tourism infrastructure of this ill conceived (but 100% legal) purge have yet to be seen. It seems a bit foolish to kill the goose that lays the golden egg, but desperate people do desperate things. The other point of view would be that liveaboards partake of the "services" available in Spain, and therefore should be treated exactly the same as the locals...
http://www.sail-world.com/cruising/index.cfm?nid=52563&rid=11 Great Oranges BUT...
http://www.cruisersforum.com/forums/f17/boat-seized-in-spain-by-police-24975.html Boat seized by Police...
http://www.michaelbriant.com/spain_boat_rules.htm How to do it properly and avoid problems...maybe
What to do...
1) Avoid Spain and the EU altogether... it's got very expensive anyway unless your income is in Euros.
2) If you do winter there and live on board, you can straddle 2 tax years if you time it all carefully. Remember when you finish wintering (before the end of May) leave the country for the rest of the year. If you intend to winter in Spain again at some stage, do not arrive back in Spanish waters till after June. Keep all your receipts and bank statements to prove you were out of Spain. The essence is not to spend 183 days in Spain in any one tax (calendar) year. This applies to you...not the boat.
3) If you are already there and didn't stay more than 182 days in 2009, you're still legal. You need to leave Spain before the end of May and make sure you don't spend more than 182 days there in 2010.
4) If you overstayed in 2009 because you didn't realise the implications, it may be an idea to slip away with your boat quietly to another country.
They can track you, every contact you have with officialdom... even to getting water, is recorded with enthusiasm... this might explain why we saw a large Italian motor yacht consistently collecting water in carriers from a beach shower ashore rather than simply going alongside and filling up in San Antonio !
Other EU countries have their own laws and taxes, but up till now Spain has been an easy-going jurisdiction wising to attract boat owners and tourism in general...things are changing be warned.
FINALLY: Do not take this article as legal advice, it is compiled from personal knowledge, information obtained from other boatowners, anecdotal evidence, and trawling the web for information. Anyone planning to spend time in Spain with their boat should obtain proper legal advice beforehand, and not leave it until your boat is impounded (and then you really will be in the hands of lawyers).
ALSO NOTE this is nothing to do with VAT paid/unpaid boats...that's a completely different matter.