Big fees hit boat owners in Croatia
Practical Boat Owner: Boatowners now fleeing from Croatia after charges for EU registration. Cruising Association members who had contracts to keep their boats in Croatian marinas when Croatia joined the EU in July last year, have had to pay up to 600 Euros for documentation to allow them ‘free circulation’ in EU waters.
And some have been told their boats will not be put back into the water until the fees have been paid in cash – without a receipt.
CA member, Mr Winslow Foot, who took his 11m ferro schooner called Iris to Croatia last June, returned to his boat at Marina Kastela near Split in April and tried to pay his berthing fees as well as the forwarding agent’s fee. Forwarding agents liaise between boat owners and customs officials to organise necessary paperwork.
Mr Foot said: ‘As well as the yard fees I asked if I could also include the 600euros to the agent. I was told this was not possible and I would have to pay separately in cash and they would not launch my boat until the cash was handed over.’
He asked for a receipt for the cash but this was refused.
‘I should have visited the customs and police in Split but by that time I was very nervous of further charges and deadlines for my crew so I simply fled Croatia and did not check out.’
The CA contacted the agent who at first promised a full refund to Mr Foot but later retracted the offer and said he had registered the payment with the Croatian Ministry of Finance.
Before July last year boats taking up contracts with Croatian marinas were regarded as being held under a “temporary import procedure” and, according to a circular issued by the Croatian Ministry of Finance, a customs declaration needed to be filed to release the vessel for “free circulation”.
This involved the presentation of a T2L document which, for British registered vessels, is issued by HMRC in the UK and confirms that a boat was properly imported into the UK and duty paid.
HMRC regard the T2L as unnecessary in this context but they have co-operated by issuing them on application. Mr Foot had applied for and received a T2L document which he had given to the agent.
Several EU-flagged boats recently arrived in Vieste, Italy, who said they had to leave Croatia in a hurry as they didn’t have a T2L form or an EUR1 document and that a number of boats had already been impounded in Murter.
Another CA member, Peter Ibbotson, said he paid €250 to an agent in Zadar and obtained the free circulation status in 24 hours.
Not all bad news?
As well as the T2L document Mr Ibbotson was asked to produce his marina contract, vignette (pre-accession permit to cruise in Croatian waters), bill of sale, a copy of his passport, registration papers or SSR certificate, inventory list, last entry into Croatia, Power of Attorney authorising the agent to act on his behalf and photos showing the hull number, engine number and the boat.
‘My understanding is that new arrivals in Croatia require only the T2L to prove EU origin, plus evidence of VAT-paid status. My guess is that any impounded yachts have been in Croatia for more than 18 months, and either been unable to prove their VAT status, and/or failed to obtain Free Circulation within the required timeframe.’ If it is not possible to prove the boat is of EU origin, import duty may be payable.
CA Past President Stuart Bradley has kept his Cromarty 36 in Croatia for the past five years. He said: ‘There is confusion about the guidance issued by the Ministry of Finance, and their latest circular doesn’t mention agents at all.
‘A Croatian friend telephoned the customs in Split and Zagreb on my behalf and got different versions of what needed to be done. This situation affects thousands of boat owners from all EU countries so there is potential for a lot of money to be made.
‘It’s a great pity that a country that offers such glorious cruising opportunities continues to earn an unfortunate reputation for overbearing bureaucracy.’
While the CA is raising awareness of agents over-charging, the RYA says another key concern is reports that Croatian marinas are requiring owners to produce a T2L before they will allow them to use marina services such as lifting and storage.
The T2L is a form which, if properly completed and validated by HMRC, provides evidence that the boat it relates to is of EU origin. A T2L is linked to customs duty and not to VAT. It does not remove the need to prove the VAT status of a boat. Documentation proving the VAT status of a vessel, such as a VAT invoice, remains important.
RYA helping UK boat owners
The RYA has helped more than 100 boat owners to apply for a T2L by providing the form and a set of instructions detailing how it should be completed. The T2L is not normally issued to boats sold new within the EU as it is designed to establish the community status of a boat which has been imported.
HRMC originally refused to validate T2Ls for the purposes of obtain community status in Croatia. However, in February 2014, after extensive lobbying by the RYA to the EU Commission and directly with HMRC, they were persuaded to do so.
Carol Paddison, RYA Cruising Advisor said: ‘We have not been informed of any cases where boats have been immediately impounded for not producing a T2L.
‘It is clear however from the members we have been in contact with that the fees being charged by the agents processing the paperwork for vessels which were lying in Croatia at the time of its accession to the EU on 1 July 2013 have been quite varied; in the region of 250 euros to 600 euros.
‘The key concern at the present which the RYA is working to address is reports that Croatian marinas are requiring owners to produce a T2L before they will allow them to use marina services such as lifting and storage.
‘The requirement to be EU VAT paid has extended to Croatia since it acceded to the EU on 1 July 2013.
‘In addition to requiring evidence of the VAT status of the boat, however, the Croatian authorities are also requiring separate evidence of the boat’s status for customs purposes before accepting that the boat has community status.
‘A notice to vessel owners issued by Croatian Customs acknowledges that documents other than a T2L are acceptable to prove community status (e.g. a VAT invoice), but Croatian Customs is not ensuring that people inspecting paperwork (presumably on its behalf) understand this.
‘The RYA considers the situation pleasure craft owners find themselves in to be unacceptable. They are being penalised for not having a document which they have not and should not ever have been given.
‘We are therefore currently lobbying the EU Commission and HMRC in an effort to encourage them to persuade the Croatian authorities to take a more pragmatic approach.
‘HMRC has indicated to the RYA that it will be taking the matter up on behalf of UK boaters and the RYA understands that HMRC will be contacting both Croatian Customs and the EU Commission.