Buying a boat in Croatia

[Sail IC]

I'm conteplating to buy a boat in Croatia. I'm a bit concerned due to below and want to make sure I will not fall into some legal pitfalls.

- The boat is located and registred in Croatia
- The boat is own by an Hungarian citizen
- The broker is located in US Florida
- I'm a Swedish citizen

The boat is privately owned and EU VAT is paid during the "Croatian special offer" last year at 5% rate. Solid documents are claimed to be available. The boat is bigger than 12x4 meters which makes a difference from a Swedish registry prospective. I plan to deregister the boat from the Croatian registry.

Here are my concerns:

Upon completion of the purchase and paid the agreed purchase price, how do I make sure their are no loans, etc on the boat that I now will be responsible for. As the broker is US based, I'm not sure he will know the ins and outs of Hungarian/Croatian paperworks, etc. What paperwork should I review prior to the sale to make sure I will not get any unplessant surprises later.

VAT. Are the their any known problems with taking a boat outside of Croatia with "only" the 5% special offer paid last year. Furthermore, I understand that to have the EU VAT status still to be valid, there are certain conditions to be met. As an example, if I would to buy a boat with UK VAT paid, the boat has to be located in UK upon the completion of the sale to have the VAT regognized. If the boat is located in France, UK VAT paid, I would have to pay the VAT again.

Are there any known issues to dereigister in Croatia. The Swedish registry is rather complicated but there are workarounds not perfectly legal but that works. The potenial issue is that will not be able to show a Swedish registration at the point of deregester the boat from the Croation registry.

Any other issues I should be aware of

I hope my questions are not too complicated. I have lived a four different countries, and I know that doing the homework before entering a transaction is very important to not put yourself in a postition your didn't want to be in.

Very much appreciate any inputs, guidance, and help

 

[KellysEye]

Personally I'd walk away why would a Hungarian with a Croatian registered boat use a US broker when the obvious one to use is Croatian. It sounds like a money laundering scam.

 

[Tranona]

I'm conteplating to buy a boat in Croatia. I'm a bit concerned due to below and want to make sure I will not fall into some legal pitfalls.

- The boat is located and registred in Croatia
- The boat is own by an Hungarian citizen
- The broker is located in US Florida
- I'm a Swedish citizen

The boat is privately owned and EU VAT is paid during the "Croatian special offer" last year at 5% rate. Solid documents are claimed to be available. The boat is bigger than 12x4 meters which makes a difference from a Swedish registry prospective. I plan to deregister the boat from the Croatian registry.

Here are my concerns:

Upon completion of the purchase and paid the agreed purchase price, how do I make sure their are no loans, etc on the boat that I now will be responsible for. As the broker is US based, I'm not sure he will know the ins and outs of Hungarian/Croatian paperworks, etc. What paperwork should I review prior to the sale to make sure I will not get any unplessant surprises later.

VAT. Are the their any known problems with taking a boat outside of Croatia with "only" the 5% special offer paid last year. Furthermore, I understand that to have the EU VAT status still to be valid, there are certain conditions to be met. As an example, if I would to buy a boat with UK VAT paid, the boat has to be located in UK upon the completion of the sale to have the VAT regognized. If the boat is located in France, UK VAT paid, I would have to pay the VAT again.

Are there any known issues to dereigister in Croatia. The Swedish registry is rather complicated but there are workarounds not perfectly legal but that works. The potenial issue is that will not be able to show a Swedish registration at the point of deregester the boat from the Croation registry.

Any other issues I should be aware of

I hope my questions are not too complicated. I have lived a four different countries, and I know that doing the homework before entering a transaction is very important to not put yourself in a postition your didn't want to be in.

Very much appreciate any inputs, guidance, and help

Registration. The Croatia register is I am pretty sure a register of title and any secured loans can be registered against the title. There is always a possibility of an unregistered loan, but it is difficult in most cases to enforce such a loan. You need to see a transcript of the register entry before parting with money, and your Bill of Sale should state that the seller has title and the boat is free of any charges. Definitely worth engaging a Croatian to help you with the searches and paperwork. www.maritinimus-consultant.hr has helped a number of UK owners deal with their VAT and registration issues in the recent transition period.

VAT. There is no reason why the 5% VAT paid certificate should not be acceptable throughout the EU. Although there was obviously some unease about the legality of the policy, it does not seemed to have been challenged by other states. VAT, wherever paid is valid throughout the EU. There is no need for a transaction to take place in the country where VAT was originally paid for it to remain valid. For example I bought my boat, and paid VAT in Greece, but the boat is now in the UK (I am British) and when I sell it here, or anywhere else in the EC no further VAT is due. boats do, however potentially lose their VAT paid status if they change ownership outside the EU, even if both the buyer and seller are EU resident.

So, provided all the other paperwork is in order - and it should be as the VAT payment process required comprehensive paperwork your only significant issue is checking for clear title, and as I suggested this is probably best done in Croatia rather than relying on a US broker.

 

[Sail IC]

Registration. The Croatia register is I am pretty sure a register of title and any secured loans can be registered against the title. There is always a possibility of an unregistered loan, but it is difficult in most cases to enforce such a loan. You need to see a transcript of the register entry before parting with money, and your Bill of Sale should state that the seller has title and the boat is free of any charges. Definitely worth engaging a Croatian to help you with the searches and paperwork. www.maritinimus-consultant.hr has helped a number of UK owners deal with their VAT and registration issues in the recent transition period.

VAT. There is no reason why the 5% VAT paid certificate should not be acceptable throughout the EU. Although there was obviously some unease about the legality of the policy, it does not seemed to have been challenged by other states. VAT, wherever paid is valid throughout the EU. There is no need for a transaction to take place in the country where VAT was originally paid for it to remain valid. For example I bought my boat, and paid VAT in Greece, but the boat is now in the UK (I am British) and when I sell it here, or anywhere else in the EC no further VAT is due. boats do, however potentially lose their VAT paid status if they change ownership outside the EU, even if both the buyer and seller are EU resident.

So, provided all the other paperwork is in order - and it should be as the VAT payment process required comprehensive paperwork your only significant issue is checking for clear title, and as I suggested this is probably best done in Croatia rather than relying on a US broker.

Thank you very much for your informative reply. This is what I was looking for.

I had some further communication with the US broker, and as you wrote, if going ahead with the purchase I will use a local company (or the one you listed) to do the title/lean research.

(Didn't see the reply until now)

 

[jamesedge]

Have just gone through this process with no great problem other than expect delays in the processing of the paperwork. The relevant harbourmaster's office will deal with the de-registration of the boat from the Croatian register and for your security this deregistration cannot proceed whilst there is an outstanding loan on the boat. I totally agree with using a local agent as much of the paperwork is in Croatian which is not the easiest language in the world. I don't know if this would work with the Swedish register but we registered the boat on the UK SSR. Once the paperwork was complete we had to sail 12nm offshore then return. On return we were officially dismissed from the Croatian register and officially accepted as a UK registered boat. You don't say where the boat is? If its anywhere I recognise I could recommend an excellent agent.

VAT wise previous reply is correct as I understand it VAT paid is VAT paid wherever you are in the EU even if some of the tax authorities in certain countries don't like it