Tax on luxury yachts repealed

On 20th June 2012 the Croatian government abolished the tax on luxury boats, explaining that the tax threatened the existence of 2 500 people employed in small shipbuilding.Last year this tax harvested approximately 4.5 million kunas. Prime Minister Milanovi? said that the tax on luxury boats has had the fate of all other cheap populist measures.

On 20th June 2012 the Croatian government abolished the tax on luxury boats, explaining that the tax threatened the existence of 2 500 people employed in small shipbuilding industry. Last year this tax harvested approximately 4.5 million kunas. Prime Minister Milanovic said that the tax on luxury boats has had the same fate that all other cheap populist measures had.
Specific tax (excise) on vessels, consistent with the specific tax law on passenger cars, other motor vehicles, crafts
and aircraft (OG 139/97., 105/99., 55/00., 127/00., 107 / 01 and 95/04.) used to be paid in a fixed amount, depending on the length of the craft until 8th August 2009. Then some changes of the law on passenger cars, other motor vehicles, crafts and aircrafts came into force (OG no. 94/09). Since then the criteria for taxation were equalized with taxation of passenger cars and motorcycles and the tax base for all mentioned products was defined depending on their value. That means that specific tax on passenger cars and motor cycles, crafts and aircrafts was paid in fixed amount defined in accordance with wether the items (to be taxed) belong to one particular price section (base): they were extended by the stated law by adding increased values and regulated percentage to the amount of value (price) of the item to be taxed which exceeds the lower limit of the definite price section.
The importance of amendments to the law on supplementary law on specific taxes on passenger cars and other motor vehicles, crafts and aircrafts, which came into force on 15th February 2010, consists of a fixed rate of specific tax on passenger cars and motorcycles. However, a new specific tax rate on crafts and aircrafts was introduced. In view of these changes, specific tax on crafts has been kept depending on the values of vessels, and new price sections have been introduced with different specific tax rates in relation to passenger cars and motorcycles. The aim is to achieve a higher rate of taxation of taxpayers who are economically more well off. That means that buyers of (more) expensive vessels would bear the brunt of higher tax both in relative and absolute amounts.