SPAIN Law and Practice Contributed by: Alfonso López-Ibor and Olivia López-Ibor, Lopez-Ibor Abogados
1. Aircraft and Engine Purchase and Sale 1.1 Sales Agreements 1.1.1 Taxes/Duties Payable Upon Execution of the Sales Agreement The analysis of taxes should be tailored to each transaction, taking into consideration the specifics of Spanish tax law, relevant double taxation treaties, and the location of delivery. When an aircraft is sold and made available, or delivered to the buyer, within Spanish territory – inclusive of Spanish airspace and territorial waters – it generally falls under the purview of Spanish VAT (21%), given certain conditions. However, there are circumstances in which the sale of aircraft can be tax-exempt. The bill of sale may be considered evidence of delivery of the aircraft and/or engine in Spain for the purposes of VAT. A judgment of the European Court of Justice (ECJ) dated 12 July 2012 (A OY Case; C-33/11) has determined that the exemption provided under article 148 B) of Directive (EU) 2006/112 for airlines involved in international air navigation also applies to owners or lessors of aircraft leased to those airlines. Therefore, there is an incon - sistency between current Spanish tax law and Euro - pean law as interpreted by the ECJ; as a result, any attempt to charge VAT by the Spanish tax authorities will be reversed by the ECJ. In these circumstances, the VAT risk has to be characterised as very low. The execution of a bill of sale in Spain does not attract Spanish stamp duty. 1.1.2 Enforceability Against Domestic Parties A bill of sale and other related documents must be translated into Spanish by an official translator ( tra- ductor-intérprete jurado ) in order to be filed with the Spanish Register of Goods and Chattels ( Registro de Bienes Muebles ) and the Civil Aircraft Registry ( Reg- istro de Matrícula de Aeronaves ), as well as to com - ply with requirements for presentations in Spanish law courts during legal disputes. However, it is noteworthy that the enforceability of a sale agreement against a domestic party is contin - gent solely upon its execution by the involved parties,
not upon its translation, certification, notarisation, or legalisation. 1.2 Transfer of Ownership 1.2.1 Transferring Title Spanish law requires the existence of a valid title and delivery of the asset to the buyer, and this extends to all parts detailed in the sale agreement. The Spanish registers currently recognise the bill of sale as a valid document proving the transfer of a title provided it has such effect according to the governing law of the bill of sale of the country of registration of the aircraft or engine or the lex situs of the engine. Additionally, Article 1463 of the Spanish Civil Code also permits replacing the physical delivery of the aircraft or engine by the mere consent or agreement of the purchaser and the seller ( traditio ficta ), if the aircraft or engine cannot be put at the disposal of the buyer at the time of the closing of the sale. The sale of the ownership in an entity that owns an aircraft or engine means that the purchaser will be the new owner of such aircraft or engine. 1.2.2 Sales Governed by English or New York Law See 1.2.1 Transferring Title . 1.2.3 Enforceability Against Domestic Parties See 1.2.1 Transferring Title . 1.2.4 Registration, Filing and/or Consent From Government Entities There are no government applications or consents required as a prerequisite to the execution and deliv - ery of a bill of sale in relation to an aircraft or engine registered in Spain. 1.2.5 Taxes/Duties Payable Upon Execution of a Bill of Sale See 1.1.1 Taxes/Duties Payable Upon Execution of the Sales Agreement .
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