Owners of yachts have just under three and a half months to take advantage of the Croatian government's very favourable offer to re-tax their boat at a rate of just 5 percent of the current value plus 1.7 percent customs duty. With the brochure from the Croatian Chamber of Commerce and the statements in the interview with YACHT at boot in Düsseldorf (see issue 4/13, download the Brochure ), most of the questions have already been answered. There is no longer any need to rush, as it is sufficient to submit the application by 31 May. In the meantime, the first applications from haulage companies have already been processed, as several agencies involved have confirmed.
"At the beginning of February, the reflagging of yachts under the Croatian flag was still a slow process," explained Dek Surija, Croatian partner of the Munich-based insurer Yacht-Pool, which handles the process for local owners. "The officials in the harbour offices waited a long time for the new prices and regulations, which is why there were delays. The shipping companies, on the other hand, often taxed the ships very quickly." Surija also confirms that the local customs officers only question the current value declared by the owners of their ships if it appears to be significantly too low. According to the Croatian, there are instructions to actually check this using the Schwacke list, which is also used by many of the agencies that offer subsequent taxation.
It has also been clarified that the yachts do not have to remain under the Croatian flag after being taxed, which caused discomfort for many owners. After all, you have to be entered in the Croatian tax register in order to reflag and also have to fulfil the corresponding equipment requirements. The Chamber of Commerce confirmed this to YACHT. Apart from this, an annual tax is levied on yachts over twelve metres in length flying the Croatian flag (up to 25 kilowatts of engine power 200 euros, over 400 euros).
However, some aspects have not yet been finalised. The most important of these is the announced exemption for vessels older than eight years. The representative of the Chamber of Commerce responsible for tax issues, Branimir Mader, assured YACHT that Croatia does not want to burden these owners with subsequent taxation. A corresponding regulation should be published by around the end of March.
It is still questionable whether the boat must have been moored in Croatia for the last eight years without interruption for such an exemption - and whether this can be proven. Furthermore, it has not yet been clarified whether this should not only apply to Croatian owners. Although it is a fact that the eight-year exemption was made when neighbouring countries such as Slovenia last joined the EU, this was not a complete carte blanche for owners. This is also the reason why some providers on the market, such as the Austrian breakdown service Sea-Help, continue to recommend their customers to tax even older ships to be on the safe side. However, as Sea-Help also offers the service for subsequent taxation itself, this is a somewhat questionable constellation.
However, it may be worthwhile for owners who are planning to sell their boat in the near future to think about a subsequent taxation - any buyers will certainly ask for a VAT certificate.
The cruiser department of the DSV also sees a need for clarification regarding the exemption period. "Nobody knows yet whether owners of older ships will be able to sail to other EU countries after accession without being asked to pay there. After all, they have no written proof from the Croatians that the subsequent taxation has been accepted there. The Italian, Greek or other EU customs authorities could then demand subsequent taxation at the national rates," says Martin Muth, head of the Mediterranean Information Centre. There have even been a few documented cases of this in Slovenia in recent years, says Croatia expert Karl-Heinz Beständig, author of the "888 Bays & Harbours" guide. "Yachts have been chained up and forced to pay back taxes in Slovenia."
Another question is what consequences the change to the Croatian flag will have. In Croatia, ships over twelve metres in length have to undergo a complex technical inspection every five years. When reflagging, an application for this inspection must also be submitted. This costs several hundred euros, and any faults must be rectified. The question is whether the boat must be inspected promptly after reflagging. There has been no information on this so far. Dek Surija from Yacht-Pool also points out that life rafts are generally compulsory for boats over twelve metres in Croatia and that owners may have to retrofit them. For reasons such as these, it also seems sensible to leave the Croatian register again quickly after taxation.
Owners who want to tackle subsequent taxation at the favourable rates valid until 31 May are still advised to turn to local service providers, as the effort involved and the risk of errors are high. It is up to you which provider you choose, but it is strongly recommended that you compare prices. Some agents charge one per cent of the current value of the yacht for the service, which is of course quite a lot for larger and newer boats. It is also particularly critical if these service providers reserve the right to determine the value of the yacht themselves by means of an expert opinion, which does happen.
Other companies, such as Yacht-Pool Croatia, charge fixed flat rates (up to twelve metres 1000 euros, over 1500 euros). However, there are always additional fees from the authorities, translation costs and much more, which can add up to well over 1000 euros, or even 2000 euros for a ship over twelve metres.
Click here for a current price comparison for the costs of subsequent taxation.
In addition to taxation, there are other areas that will change for owners as a result of EU accession. The vignette, for example, will be retained with EU accession, contrary to some publications to the contrary. However, the current practice of yacht owners having to submit crew lists to the harbour office before setting sail will be abolished. However, the obligation for all crew members to be entered in the controversial list of persons, which severely restricts the use of the yacht with guests, remains in place for the time being. If a crew member is not listed there at the start of the cruise, they must be registered later. However, as many owners have submitted a list of family members and frequent co-sailors at the start of the season, there should be far fewer trips to the harbour office. It remains to be seen whether the list of persons will continue to exist - it seems difficult to imagine that it is compatible with EU law.
Andreas Fritsch
Editor Travel
