As France and Italy tighten the screws on VAT for charters, the city of Melilla in North Africa, has emerged as the step-off point for nearly VAT-free yachting in Spain.
This Spanish inhabited city lies on the Alborán Sea and borders Morocco. It holds the status of ‘special territory’ as part of the EU and, along with a handful of other territories, has been opted out of the VAT Area, EU Customs Territory and Excise Duties Area.
Melilla Port authority director, Luis J. Ayala Navarro, is keen for superyachts to start chartering itineraries that encompass this African outpost at the westernmost tip of the Mediterranean.
At present the port infrastructure welcomes any size yacht in the 240m dock and has 15 stern-to moorings for yachts measuring up to 50 metres.
Recent negotiations with the Melilla and Spanish Governments has led to the relaxation of the ‘use & enjoyment rule’ for charters that begin in Melilla, Ceuta, or the Canary Islands.
The City of Melilla has also used its autonomous powers to reduce the rate for charter operations from 4% to 0.5%, the lowest rate allowed under its own Production, Services and Importation Tax (IPSI) regulations.
Tax advisor to the Spanish National Yachting Association (ANEN), Miguel Ángel Serra, explains: “For the coming summer season in 2021, charter operations in Spanish waters undertaken from Melilla will be subject solely and exclusively to the 0.5% rate which without doubt will be excellent news for the sector.
“All boats and commercial vessels of whatever flag that have the status of Union goods may take advantage of this excellent opportunity.”