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New Croatia Yacht Charter VAT Regulations

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Photo of harbor full of anchored sailboat hulls

 

BACKGROUND

Back in January, 2014, we alerted our clients to new rules regarding a VAT increase imposed on Croatia yacht charter rentals.  At that time, the government increased the VAT rate from 10 % to 13%, to help combat the country’s economic woes.

To offset this tax burden, we encouraged our clients to commence their charters in nearby Montenegro, then cruise into Croatian waters, tax-free.

Alas, good things sometimes come to an end…

Effective this month, new regulations take effect and eliminate the loophole that allowed tax-free cruising in Croatia.

 

WHAT’S NEW

In February, the Croatian Ministry of Maritime Affairs announced the regulations that govern the Croatia yacht charter market would be amended to, “…bring the regulations in line with other European Union Member States.”  The main change was the imposition of VAT on charters starting outside of Croatia.

As succinctly  explained by 1-800 Yacht Charters company president,  Jana Sheeder,

“As of May 1st, 2018, charters commencing outside Croatia that then cruise into Croatia, will now have to pay 13% VAT on the time spent in Croatian waters.”

 

The new regulations are not retroactive.  Thus, any charters booked prior to the regulation change are exempt.

 

OTHER CHANGES

On a positive note, other regulation changes designed to encourage an increase in yacht charter Croatia activity will also go into effect.  The government has lifted the restriction that banned non-European Union charter yachts under 40 meters from chartering in Croatia.  As explained by Rory Jackson of SuperyachtNews, “These restrictions, which prohibited non-EU commercial vessels under 40m chartering in Croatia, had been implemented to bolster the domestic market. However, they proved to be more costly than beneficial.”

Non EU flagged yachts under 40 meters will need to secure a charter license to operate in Croatia. The license will be required even if the charter starts outside Croatia.

Are you considering a private yacht charter vacation in Croatia or elsewhere in the Mediterranean this summer?  Click https://www.1800yachtcharters.com/superyacht-charter/ for a sampling of superyachts available this summer.

Come enjoy The Superyacht Experience as only 1-800 Yacht Charters can deliver!

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