January 30, 2014
New Regulations Update: VAT on Charter in Croatia and other related news
Dorijan Dujmic, Managing Partner of BWA Yachting – Croatia has just returned from a meeting at the Ministry in Zagreb regarding VAT on charter and other related issues.  There are several important updates here that we wanted to inform you on quickly.

The main topics are the following:
1. VAT on charter in Croatia is set at 13% for charters starting in Croatia.
2. Charter in Croatia can be performed by Croatian flagged yachts and EU flagged yachts.
3. Third country flagged yachts (non-EU with registered length over 40m) can ONLY perform charter if they obtain a charter license.

This applies only for yachts over 40m registered length. The cost of such license will not be high and according to current information available will be approximately 300-400 Euro. What we must stress out here is that the process of issuance of the license will be lengthy, and most likely will take up to three months. (For example, if you apply today it will take three months to have the license issued).

For this reason we recommend to all of our clients who are third country flagged, over 40m registered length, commercially registered and intending to embark in Croatia to start immediately the process of applying for the charter license.  The license will be valid for one year.  The process will not only be lengthy to obtain, but the number of licenses that will be granted for next season will also be limited. (According to the information we have at this moment, the total number of licenses that will be granted will be under 200 and will be “first come, first serve”.   BWA Yachting – Croatia can assist you with the process for obtaining this license.

Also note that, commercially registered yachts under 40m registered length will not be allowed to embark guests in Croatia under any circumstance. They will only have the possibility to disembark guests within Croatia (for example embark in Montenegro and disembark in Croatia). This applies for yachts under 40m that are non-Croatian and non EU flagged (3rd country flagged yachts).

In other news, all commercial yachts engaged in charter activity must have a certification of technical inspection done in the last 12 months; in the case that you do not have this, an inspection will be performed in Croatia by the CRS (Croatian Register of Shipping).

All yachts intending to perform charter in Croatia must appoint a fiscal representative and obtain a Croatian VAT number to the name of the yacht owning company.

While we are pleased to finally have some concrete information, we do still have a few unanswered questions that remain.  We are still waiting to hear from the tax office regarding:
1. Whether a yacht that starts a charter outside Croatia, will have to pay VAT for the amount of days spent in Croatia; and
2. Will the 13% VAT be applicable on the APA as well?

As soon as we have updated information from Tax Administration office on the two unanswered questions above we’ll be sure to inform you.  

For any questions, or to start the application process for the license, please contact Dorijan Dujmic and his team at BWA Yachting – Croatia.