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TRANSFER OF VESSELS UNDER CROATIAN FLAG

After the accession of Croatia to the European Union, EU residents – owners of vessels registered in the EU which have been temporarily admitted to Croatia need to file a customs declaration for putting the vessels into free circulation, and pay the customs duties and VAT.

In order to put a vessel into free circulation in Croatia, it has to be entered in Croatian registers and placed under Croatian flag. If the registration is conducted until 31st Mai 2013, VAT shall be calculated at the reduced rate of 5%.

Furthermore, the import duty on importation shall be charged at the rate of 1.7% or 2.7% on the custom value of the vessel, depending on the lenght of the vessel. This rate has been reduced and normally amounts 12% or 8 %. Besides, on vessels originating from the EU, CEFTA, EFTA countries or Turkey the preferential rate of duty in the amount of 0% shall be charged.

Hence, potential beneficiaries of the privileged tax and custom rates are natural and legal persons, owners of recreational craft intended for sports and leisure undergoing the procedure of temporary admission to Croatia which do not have the customs status of Community goods.

It should be pointed out that all the said privileges are applied only until 31st Mai 2013. After 1st June 2013 the full rate of VAT of will be charged, which currently amounts to 25%.

If the customs and tax status of vessels is not regulated in Croatia, after the accession of Croatia to the EU, the owners of such vessels will have to regulate the customs and tax status of the vessels in one of the EU member states.