Transport and Shipping Newsletter - October 2018 | News Roundup

Approved by Royal Decree-Law, the reform of the Land Transport Planning Law containing amendments related to the hire of vehicles with drivers

Royal Decree-Law 13/2018 of September 28, 2018 has for the second time this year amended the Land Transport Planning Law –LOTT- in relation to the hire of vehicles with drivers, to deal, according to its Preamble, with the mobility, traffic congestion and environmental problems that urban transport in passenger vehicles is causing in the main Spanish town and city centers, and has resulted from the need to gradually close the gap between the rules on taxis and on hired vehicles with drivers.

Under the urgent fast-track procedure, it has reformed article 91 LOTT to determine that the licenses to offer vehicles with drivers for hire within Spain are only for operating interurban services. And it now allows the authorities responsible for urban transport to use their powers to determine the terms and conditions under which the passenger transport services that start and end in the areas within their responsibility may be authorized and provided, including those performed in the form of offering vehicles with drivers for hire.

Because this may have an impact on existing rights, the decree-law provides that to strike the right balance between the new provisions and existing rights and to compensate for the loss that the new definition of the territorial scope of licenses may cause to license holders under the previous legislation, a four year period is granted to them in which they are allowed to continue providing services in urban areas, and it allows this period to be extended for justified reasons in specific cases. It has been decided to calculate the length of time needed to recoup the investment by reference to the method in Royal Decree 55/2017 of February 3, 2017 implementing Law 2/2015, of March 30 2015 on delinking the Spanish economy from the consumer price index.

Increased 75% discount on air and sea travel for residents of the Canary Islands, the Balearics, Ceuta and Melilla

Royal Decree 949/2018 has increased the discount on air and sea travel (scheduled and direct) for passengers between non-mainland territories (Canary Islands and Balearics, Ceuta and Melilla) and the rest of Spain to 75% of the ticket price.

This discount, which used to be 50%, is available to residents of those non-mainland territories. The new 75% discount will remain compatible with existing discounts on sea and air travel between the islands in the autonomous communities of the Canary Islands and the Balearics, and with other applicable discounts such as those provided for members of the military services and large families.

Royal Decree 949/2018, which was rendered under the express authorization given to the government in the General State Budget Law for 2018 (Law 6/2018), came into force on July 29, 2018. 

Approval given to €40 million fund to secure installation of ballast water treatment systems by shipping companies

The General State Budget Law sets out the creation of a €40 million fund to secure the obligations attached to loans arranged by Spanish domiciled shipping companies to be put towards modernizing the commercial shipping fleet by converting vessels registered or flagged in Spain or in another EU member state, to (i) use liquid natural gas as fuel, (ii) install treatment systems for exhaust gases from their engines, or (iii) install on-board ballast water treatment systems.

While similar initiatives appeared in earlier budget laws, the key new development is that the funds can also be used to secure the installation of on-board ballast water treatment systems. It is widely known that the International Convention for the Control and Management of Ships’ Ballast and Water Sediments requires the majority of ships to install an on-board ballast water treatment system over the coming years, which is a very costly process.

The guaranteed amount may not be higher than 70% of the total cost of the funded conversions on the ship.

The applications, grant and terms and conditions for these guarantees will be governed by the provisions in the General State Budget Law and in Order PRE/2986/2008 establishing the procedure for granting them.  

Other notable elements of the General Budget law for 2018 with an impact on the shipping industry

The General State Budget Law also includes the following tax measures that are significant for the shipping industry, such as:

• Corporate income tax: Starting in periods that began on or after January 1, 2017, an exemption is included for the income obtained by the Port Authorities as a result of the transfer of elements of their fixed assets, provided the whole amount from the transfer is used for the repayment of loans provided by State Ports or by official credit institutions to finance investments in fixed assets related to their specific purpose or aim; and
• VAT: The tourist registration regime is repealed, although a transitional period is established for vehicles and boats which when the law came into force benefited from a tourist registration arrangement, and it clarifies the scope of the exemption for the carriage of passengers and their luggage by sea or air  from or to a port or airport situated outside Spanish VAT territory, by establishing that carriage by air on the same air flight document which includes connecting flights will be deemed to be included.