The financial design that underpins the tax residence of vessels in the Canary Islands faces a severe judicial correction that clearly delineates the boundaries of the tax benefits conditioned on the success of industrial investment. The Second Chamber of the Administrative Litigation Division of the National Court has dismissed the ordinary appeal filed by Naviera Cabio AIE based in Las Palmas against a previous resolution of the Central Economic Administrative Court (TEAC). The court ruling confirms the legality of the settlement agreement issued by the Central Delegation of Large Taxpayers of the Tax Agency regarding Corporate Tax for the fiscal years 2013 and 2014, obliging the economic interest group to return the millions in deductions applied for early depreciation due to the non-completion of the vessel subject to the incentive.
The corporate litigation dates back to 2007, when the entity structured a financial leasing operation (tax lease) with the firm Bansalease for the acquisition of a ferry commissioned to Astilleros de Sevilla, identified by hull number 001. In the same act, the group formalized a sublease under the bareboat charter modality with the international corporation Viking Line. In light of this investment structure, the General Tax Directorate (DGT) granted in February 2008 cross-authorizations of maximum fiscal relevance: the accelerated depreciation of Article 115.11 of the consolidated text of the Corporate Tax Law (TRLIS) and the subsequent inclusion of the shipping company in the Special Regime based on Tonnage starting in 2011.
The financial viability of the project began to run aground almost immediately due to the profound economic problems of the shipyard responsible for the civil works. The initial delivery date for the vessel, set for June 2009, was systematically breached, forcing investors to agree to a first temporary suspension of the contract that was formally communicated to the tax authorities. Faced with this scenario of industrial delay, the General Tax Directorate showed flexibility and authorized a modification of the schedule in July 2011, postponing the start of the tonnage tax regime to January 1, 2014, based on a new expected delivery date for the ferry set for April 30, 2013.
The definitive breaking point between the taxpayer and the tax inspection was solidified on April 30, 2013. By this deadline, the vessel remained unfinished due solely to reasons attributable to the shipbuilder. Due to the paralysis of the work, the parties signed a new corporate agreement that, unlike the previous moratoriums, established an indefinite suspension of the financial leasing contract, ceasing even to pay the nominal fee of 1,000 euros set in the payment schedule. The annual accounts of the company itself reflected this change in status, which led the Tax Agency to determine that there had been a substantial change in the conditions that motivated the incentive.
The legal defense of the shipping company argued before the National Court that the tax regularization was unwarranted as there was no civil fault or voluntary breach on the part of the AIE, attributing the project’s failure solely to the technical bankruptcy of the shipyard. The court outright rejected this contractualist interpretation and emphasized that specific tax regulations, specifically Article 49.7 of the Corporate Tax Regulation, require that the communicated factual circumstances be maintained. The literalness of the law obliges the taxpayer to regularize their situation and pay back the deducted amounts along with the corresponding default interest if the asset does not go into operation.
The ruling, authored by Judge Enrique Gabaldón Codesido, reminds that targeted tax incentives require a restrictive interpretation and prohibit the application of analogy according to Article 14 of the General Tax Law. The court ruling establishes that the purpose of the incentive was not to generically promote the naval sector, but to complete the construction of a specific vessel that was never delivered, ruling out equating this failure with the cases of loss or fortuitous damage contemplated in the TRLIS. The ruling imposes the legal costs on the claimant and closes a loophole that penalizes the financial structures of the maritime sector exposed to supplier bankruptcies.
