New Charter and VAT Regulations for Croatia

Back in July we released a story about Croatia becoming the 28th state member of the EU and reports that this would negatively affect charters in the region due to the tax regulations in European waters. The meeting yesterday has now confirmed that VAT on charter yachts embarking from Croatia will to be set at 13% of the total amount of the charter fee, although this will not apply to charter yachts staring outside of the region.

It was also addressed in the meeting that Croatian luxury yacht charters can be performed by both Croatia and EU flagged yachts but third country flagged yachts (non-EU with registered length over 40 metre) will need to obtain a charter license. The cost of such license will not be high and according to current information available will be approximately 300-400 Euro, although will take up to three months to issue. Therefore it is recommended that all third country flagged yachts with a registered length of 40m+ looking to embark in Croatia should apply for a license as soon as possible. The license will be valid for one year. Each license is valid for one year although the number of licenses that will be granted for next season will be limited.

It is also worth noting that commercially registered yachts under 40 metre 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 40 metre that are non-Croatian and non EU flagged.

More information regarding charters outside but visiting Croatia for a period of time is yet to be confirmed. Although Croatia has become a very popular cruising destination in recent years, renowned for its spectacular scenery and unspoilt coastline, these additional tax costs may mean that charter yachts will increasingly look to embark outside of the EU. Montenegro for example may offer the best place embark in the Adriatic as it ensures 0% VAT on charters and offer duty free fuel to all yachts.

Croatian luxury yacht charters can be performed by both Croatia and EU flagged yachts but third country flagged yachts (non-EU with registered length over 40m) will need to obtain a charter license.