THE unpopular and controversial Spanish matriculation tax for charter yachts could be on the verge of finally being sunk.
Local and international nautical bodies and businesses have been trying to get the 12 percent tax scrapped for years and earlier this year, the Majorcan Unionist Party joined the battle and drew up a Non-Law Proposal entitled Energising the Nautical Sector, which was put before the Balearic Parliament on June 8th, 2010.
And now, the proposal has been submitted to the European Union and a motion has been tabled before the European Commission by the Convergencia i Unio (CiU) European MP Ramon Tremosa.
The CiU won Sunday's elections in Catalonia and have a close working relationship with the UM and its leader Josep Melia.
The 12 percent tax on commercial charter yachts over 12 metres in length is destroying the country's charter industry by forcing foreign flagged yachts to use other destinations, such as France, Italy and Greece where, if there is a matriculation tax, is it negligible.
The UM states in its proposal; In comparison to other sectors in obvious decline, such as construction or commercial fishing, the nautical sector has a great potential for growth but it is limited by a misguided tax policy unique in the whole of Europe, as is the application of the Excise Duty on Certain Means of Transportation (IEDMT), a tax which sums up to 28% (16% VAT, plus 12% IEDMT) of the purchase value of a boat (resulting in 30% from July 2010, in consequence of the VAT rate change from 16% to 18%). The UM agrees with the nautical industry that the tax is leading to the loss of hundreds of millions of euros every year for the Balearic and Spanish charter industry and restricting the creation of thousands of jobs.
So, Tremosa has asked the European Commission to explain why it is continuing to allow Spain to enforce this unilateral and discriminatory tax on commercial yachts.
Obviously, Tremosa is aware that any withdrawal of the tax would also benefit Catalonia's nautical industry but, because of the close relationship he has with the UM in Majorca, he is going to act on behalf of both regions.
Recently, the leader of the UM, the party spokesperson, Cati Julve, and the President of the Majorcan Chamber of Commerce, Joan Gual, met Tremosa in Barcelona to discuss the issue face to face.
If the tax is not scrapped, the nautical industry would accept a harmonised European Union matriculation tax but, obviously, countries which do not apply any such levy are not going to introduce one as it would damage their charter industries, so scrapping the tax appears to be the only alternative.