For the novice, VAT is a consumption tax charged on products and services. Therefore, when someone charters a yacht in the EU, not only is the price of the charter subject to VAT, but so is everything else on the yacht – everything from the wine to the fuel to the furnishings in the interior.
The Croatian Government, at the end of February, released news about changes to be made to VAT regulations, specifically regarding application of a 13% Croatian VAT on a pro-rata basis on charter time spent in Croatian waters for charters originating outside of Croatia, going into and spending time cruising in Croatian waters.
Although the official statement has not been released yet, changes are expected and will be effective as of the beginning of May 2017. For those who have chartered a yacht in the Mediterranean before, as they know until 2017, only charters starting in Croatia were subject to 13% VAT. As of May 2017, if a charter starts outside the EU, a 13% VAT will be due on charter fees for the number of days spent in Croatian waters.