Miguel Ángel Serra, SYN Guest Author and Tax & legal advisor of the Spanish Yachting Association, provides an important tax update…

As recently commented in a previous article, Melilla is a Spanish coastal city located in North-East Africa, separated by no more than 95 nautical miles from the coast of Almeria (Spain). Among others, the city brings the following advantages to the yachting industry:

 ·   Since the 2021 summer season, charter operations in Spanish waters undertaken from Melilla are subject solely and exclusively to 0.5% ‘IPSI’ (applicable local indirect tax playing the role of VAT) rate. In addition, since January 1, 2021, when a charter sets out from Melilla but sails to the Spanish mainland or the Balearics the VAT ‘use & enjoyment rule’[1] is not applicable.

·   Provided that Melilla is outside the VAT area and the Union Customs Territory (UCT), Melilla offers the possibility of discharging the Temporary Admission scheme (TA) before the end of the maximum period of 18 months’ stay in the UCT.

·   Melilla also offers the possibility of finalising any repair and maintenance work (refit) undertaken under the Inward Processing Regime (IPR) and, consequently, free of VAT[2].

·   Melilla is outside the EU excise duties area; therefore, it is an important reference as a stopover for provisioning and…