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V0007-23 5 January 2023 · SG de Impuestos Especiales y de Tributos sobre el Comercio Exterior y sobre el Medio Ambiente Criterion in force
IRNR · cánones

Rental boat income taxed in Spain; no permanent establishment under VAT

A Dutch company asks whether renting a boat in Spain with a mooring constitutes a permanent establishment under IRNR, VAT and Special Taxes. The tax authority confirms that rental income is subject to Spanish taxation and that no permanent establishment exists under VAT due to the absence of own human and technical resources.

The question raised

Confirm whether, as a consequence of the transfer of the vessel to Spain and its subsequent leasing to a charter company resident in Spain, the Company is considered to have a permanent establishment for the purposes of Non-Resident Income Tax, Value Added Tax, and the Special Tax on Certain Means of Transport.

The DGT's ruling

Under Non-Resident Income Tax (IRNR), the leasing of the vessel is classified as royalties, allowing Spain to tax them at up to 6% of the gross amount pursuant to the Spain-Netherlands Double Taxation Convention. Regarding VAT, no permanent establishment exists if the entity does not possess an adequate structure of its own human and technical resources for the activity. With respect to the Special Tax on Certain Means of Transport (IEDMT), the taxpayer may request the exemption if the lessee uses the vessel exclusively for rental purposes and the non-resident partner leases it at market price.

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