French and Croatian Charter Tax Report

Yachting Partners International issued their latest report on French and Croatian Charter Tax:

Following up on our article ‘French Vat On Yacht Charters And Fuel: Part Three’ published in December 2012, the EU Commission has decided to delay its decision on the legality of French proposals for VAT exemption on charter contracts pending the next commissioners’ meeting on 28 May 2013. 

It is therefore widely accepted by the industry that whilst the on-going indecision maintains the current uncertainty, charter contracts entered into in the meantime look set to continue as before without VAT being charged.

It is however expected that VAT will be introduced in line with most other European states, at some as yet undecided rate, with the introduction and collection suspected to start in 2014.

With over 5,000km of coastline sheltered by chains of over 1,185 islands including the renowned Dalmatian Islands, Croatia has, in just over five years, become one of the region’s most in-demand charter destinations. 

With the country joining the EU as of 1st July 2013, the question as to what will happen concerning VAT on Charters is a very real and poignant one. “By June we are expecting adoption of the new Croatian VAT law which foresees that charter contracts will be charged with 10% VAT,” says Branimir Mader of the Croatian Chamber of Commerce.

Technically, for yachts chartering in Croatia, that represents no actual change from the law as it has been before Croatia joined the EU, however as with so many countries around Europe keen to help promote and protect yachting today, the question of enforcement and collection remains a fluid and rather grey area.