Following Croatia’s accession to the EU on 1 July 2013, the VAT rate for Croatian charters has been set at 13%. An inspection of documentation and equipment must be undertaken upon arrival into Croatia and prior to commencing charter operations.
Upon entering Croatian waters, the yacht must immediately proceed to the nearest official Port of Entry and obtain clearance. This applies day or night with penalties applied for those yachts that delay, even for a short period in the middle of the night. The authorities use AIS to track yachts entering their waters and will use this to evidence such delays. When leaving Croatia you must also obtain clearance from the Harbour Master and leave Croatian waters immediately and by the shortest route.
The appointment of a Croatian ship agent is mandatory for EU and Non EU yachts over 45 metres in length.
VAT at 13% is applied on all charters starting in Croatia and on the number of days spent in Croatia if the charter starts outside the EU. Duty free fuel, supplies and service is not available.
Fiscal registration and a Croatian VAT number must be obtained in the name of the yacht owning company prior to the commencement of charter activity. No charter licence is required and guests are free to embark and disembark in Croatia.
NON-EU FLAGGED YACHTS (incl Isle of Man)
A charter licence must be obtained through a ship agent; this is anticipated to take up to three months. The licence will be valid for 1 year and will be on a first come first served basis. There is no longer a cap on the number of licences however, the Croatian Ministry of Maritime Affairs might temporarily suspend applications depending on levels of demand.
Croatia is another cruising ground where commercial operations for non-EU flagged yachts are restricted. As covered in our article VAT and Charter Operations, an EU flag is preferential although it is understood that the choice of flag is often driven by a wide range of other factors.
The charter rules vary in every member state making it more and more difficult for yacht owners to understand their obligations and plan ahead for the charter season, especially for those yachts operating in a multitude of member states. The costs of setting up and maintaining fiscal registrations in each and every member state that the yacht is going to operate from also adds more costs to the raft of expenses to run a charter yacht in the EU. With time frames as long as 3 months to put the necessary arrangements in place owners will need to plan ahead and apply now for the 2014 season rather than waiting for charters to be secured prior to making any such arrangements.