Nautical tourism is an important pillar of the Croatian economy. Business in this sector, however, has often been carried out very discreetly, often behind the walls of marinas on the Adriatic coast, and for good reason. Often boats arrive that are not declared in the country whose flag they carry, therefore the owners avoiding hefty tax charges.
This, however, will soon come to an end with Croatia joining the European Union. Croatia has now decided to enforce new laws which mean owners are now required to submit the customs declaration and pay customs duty and VAT on their vessels. Many boat owners so far have used the opportunity to pay VAT in Croatia, but as Deutsche Welle reports, many have escaped to countries not inside the EU, such as Turkey and Montenegro.