Operating leases of vessels shall be considered services for VAT purposes

The tax classification of vessel rental operations is a key aspect for the accounting and tax management of companies in the nautical sector. Recently, the Dirección General de Tributos (DGT) has specified the nature of these contracts and the depreciation rules that owning entities must follow.

What the DGT has resolved

The inquiry focuses on determining whether the operating lease of a vessel can be classified as a supply of goods for Value Added Tax (IVA) purposes. The DGT concludes that, as long as there is no binding ownership transfer clause, these operations must be considered provisions of services under Law 37/1992.

Regarding Corporate Income Tax (IS), the resolution establishes differentiated criteria for the depreciation of fixed assets according to the type of vessel:

• Pleasure vessels (length equal to or greater than 24 meters): are depreciated with a maximum coefficient of 10%, implying a period of 20 years.
• Pleasure boats (length less than 24 meters): are considered external transport elements and allow a maximum coefficient of 16%, with a period of 14 years.

The regulations allow the taxpayer to opt for a special plan or, where appropriate, justify the effective depreciation of the assets.

What it means for you

For entities managing vessel fleets, this distinction is fundamental for the correct settlement of IVA. Since these are provisions of services, the tax operation must comply with the rules of location and accrual specific to services, avoiding the application of the rules for the supply of goods.

Likewise, the difference in depreciation coefficients based on length directly impacts the company's deductible expenses. An erroneous classification of the type of vessel could lead to an incorrect application of the depreciation tables permitted by the Corporate Income Tax Law.

What should be done

It is necessary to review lease contracts to ensure they do not contain clauses that could be interpreted as a transfer of ownership, which would alter the classification of the operation. Furthermore, companies must verify that the classification of their vessels (by length and use) matches the depreciation coefficient applied in their accounting to avoid contingencies before the Administration.