Non VAT paid boats in Croatia - 2013

No-one knows th detail because they haven't passed/announced the law yet. But going by what has happened in previous accession countries, assets (not just boats - this applies to car, furniture, chattels, whatever) genuinely owned by non-business owners resident in the country will be deemed VAT paid. There will be anti-temp-import rules to stop anyone getting vat-paid status by nipping into Croatia for a short period before accession. And you'd think there might be a rule that no deemed VAT paid status will be available to non-Croatian resident owners, but on the face of it that seems not possible becuase it would offend freedom of establishment (one of the 4 freedoms in the Treaty of Rome) but I'd hve to research that to be sure
 
There is a long thread running on scuttlebut on this topic. Seems there is a proposal to levy 23% on 2013 valuation for non resident owned boats.
 
If you have seen the size of some of those motorboats out there I doubt that the VAT bill will dent the owners funds, perhaps a scratch.....
 
VAT bill to owners funds

Red said:
If you have seen the size of some of those motorboats out there I doubt that the VAT bill will dent the owners funds, perhaps a scratch.....
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It is likely Red that the owners of larger boats 24 meters+ will be commercially registered and therefore not liable to pay VAT; it is undoubtedly a bit of an effort at least in France and Italy to convince the authorities that your commercially registered yacht is indeed being used in that manner; but for smaller boats this is increasingly awkward to orchestrate. There are ways and means but it is not to be taken likely, I think the balance is shifting as far as desirability is shifting away from non-tax paid boats which are less that 20 meters long, as the authorities look for easy revenue.
 
PowerToSail.com said:
It is likely Red that the owners of larger boats 24 meters+ will be commercially registered and therefore not liable to pay VAT; it is undoubtedly a bit of an effort at least in France and Italy to convince the authorities that your commercially registered yacht is indeed being used in that manner; but for smaller boats this is increasingly awkward to orchestrate. There are ways and means but it is not to be taken likely, I think the balance is shifting as far as desirability is shifting away from non-tax paid boats which are less that 20 meters long, as the authorities look for easy revenue.
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By commercially registered, I assume you mean commercially registered for charter? In Croatia, as far as I understand it, boats offered for charter have to be registered in Croatia so it would be easy for the authorities to decide who was commercially registered for charter and who wasn't
 
Tranona said:
There is a long thread running on scuttlebut on this topic. Seems there is a proposal to levy 23% on 2013 valuation for non resident owned boats.
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If that is the case, then there are going to be a lot of boats fleeing south to Montenegro. The owners of Porto Montenegro must be rubbing their hands with delight because this is exactly the scenario on which their business plan is based. Is it beyond the wit of Med govts to come up with tax policies that don't decimate their own boating economies?
 
Deleted User said:
By commercially registered, I assume you mean commercially registered for charter? In Croatia, as far as I understand it, boats offered for charter have to be registered in Croatia so it would be easy for the authorities to decide who was commercially registered for charter and who wasn't
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Yes, I did mean commercially registered for charter - I was unaware of this, thank you for pointing it out. There maybe I suppose some conformity with the rest of the EU when they become members?
 
Deleted User said:
If that is the case, then there are going to be a lot of boats fleeing south to Montenegro. The owners of Porto Montenegro must be rubbing their hands with delight because this is exactly the scenario on which their business plan is based. Is it beyond the wit of Med govts to come up with tax policies that don't decimate their own boating economies?
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Quite probably. However, there is a limit to the number of boats that can go elsewhere for all sorts of practical reasons.

As was discussed in the thread on Italian taxes, the number of places where one can avoid taxes is getting less and less. While the immediate impact is heavy on the individuals owning untaxed boats at the time, the market overall seems to adjust to these sorts of changes. Gloom and doom is always predicted when big cost increases come along - VAT, fuel costs, berthing costs and so on - but still the number of boats keeps on growing.

So, expect to see a short term re-adjustment, but long term the attractions of Croatia (assuming political stability) are such that people will still want to keep their boats there.
 
Tranona said:
Quite probably. However, there is a limit to the number of boats that can go elsewhere for all sorts of practical reasons.

As was discussed in the thread on Italian taxes, the number of places where one can avoid taxes is getting less and less. While the immediate impact is heavy on the individuals owning untaxed boats at the time, the market overall seems to adjust to these sorts of changes. Gloom and doom is always predicted when big cost increases come along - VAT, fuel costs, berthing costs and so on - but still the number of boats keeps on growing.

So, expect to see a short term re-adjustment, but long term the attractions of Croatia (assuming political stability) are such that people will still want to keep their boats there.
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There are a number of issues here. My guess is that most boats in Croatia are non VAT paid and if not most, then a sizeable proportion. Thats why many people do their boating there. We live in hard times and for many people, the prospect of paying 23% of what somebody thinks is the value of their boat will be the straw that breaks the camel's back so I would expect to see a lot of boats on the hard looking for new owners and prices will be depressed especially as buyers know they are liable for VAT as soon as the boat hits the water. Second, VAT rates differ. Will there be an exodus of boats to France or Spain where VAT rates are lower? Maybe. I dont know that the attractions of Croatia will withstand a 23% tax grab. As you know, there are many on this forum who already complain bitterly about cruising vignette charges, tourist tax and mooring buoy charges in Croatia; the VAT charge is a whole order of cost higher than those charges.
I suppose it all comes down to the basis on which the Croatian tax authorities value boats for VAT purposes. If its like Spain and the book values used are relatively generous especially for older boats, then I guess many people will just pay up and move on. However, if they are going to be harsher, then I guess there will be an exodus
 
Tranona said:
Quite probably. However, there is a limit to the number of boats that can go elsewhere for all sorts of practical reasons.

As was discussed in the thread on Italian taxes, the number of places where one can avoid taxes is getting less and less. While the immediate impact is heavy on the individuals owning untaxed boats at the time, the market overall seems to adjust to these sorts of changes. Gloom and doom is always predicted when big cost increases come along - VAT, fuel costs, berthing costs and so on - but still the number of boats keeps on growing.

So, expect to see a short term re-adjustment, but long term the attractions of Croatia (assuming political stability) are such that people will still want to keep their boats there.
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Blimey Tranona, I can't believe what I'm reading.
A sensible, unbiased viewpoint on these matters?!? :eek:
Don't dare posting this on the Lounge! :D
 
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