The long awaited Maritime Property Law could bring relief and security for investors, but alas it was taken out of parliamentary procedure
Issues troubling domestic entrepreneurs in nautical tourism is the highest VAT rate, but also the Maritime Property Law, due to be adopted in autumn of last year, says Roko Vuletić, President of Croatian Employers Union’s Nautical Sector Union, writes Vecernji.hr on June 11, 2016.
“The Maritime Property Law has been overdue for the last ten years, which shows the absurdity of our system and proves the absolute inefficiency of the state. During the mandate of the last government, the Croatian Employers Union’s Nautical Sector Union actively participated in the preparation of the new Maritime Property and Sea Ports Law, a crucial condition for the creation of legal framework for safety of future investments in maritime property. We generated quite a few comments, some of which were adopted. A good example is the protection of investment through refunds for unused investment after a loss of concession and abolishment of the variable fee fraction,” says Vuletić.
He recalls a high degree of harmony in coordinating bodies of social partners, but also the past government and past opposition, the current government.
“The Maritime Property Law was sent to parliamentary procedure and was due to be adopted last October, but as parliamentary elections came the adoption was halted. The most logical solution, being the proposal was previously agreed upon and its meaning for the business community, is to place it first in line in the new parliament. However, it is absurd that it was taken out of procedure, with only cosmetic changes being made,” Vuletić adds, moving on to the issue of VAT.
“At this moment, all segments of nautical tourism are burdened with a full 25% VAT. The only exception is charter with a lower, tourism 13%, still the highest among Mediterranean nations… I see no reason why marina berths shouldn’t be taxed less, as they are a special form of accommodation. Besides, high taxes divert investors as the ultimate users of tourism services are mostly private persons that cannot deduct VAT as prepayment. They are only concerned by the final price in a hotel, sailboat rental or marina berth, which means the tax is basically a cost of business to the service provider. We must keep in mind that the return on investment in tourism is generally low. When the tax was raised from 10 to 14%, after only a year of implementation, the government argued that it’s only 3 percent increase, while my humble knowledge of mathematics says it is a tax increase of a significant 30 percent,” Vuletić says.
