VAT compliance and reporting rules in Croatia 2024
Below is summary of the major rules provided under Croatian VAT rules (Croatian VAT Act of 2013 (ZPDV) and VAT bylaws), plus adoption of EU VAT Directive provisions. Check our country VAT guides for other jurisdictions.
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Croatia VAT country guide
| Highlights | Local term | Porez na dodanu vrijednost (PDV) |
| VAT Rates - standard | 25% | |
| VAT Rates - reduced | 13%; 5; 0% | |
| Rates news | Heating VAT cut extended to 2024 | |
| VAT number format | HR 12345678901 | |
| Registration threshold | €40,000. Nil for non-residents; €10,000 for pan-EU digital services and goods OSS return. Intra-community acquisitions €10,000. | |
| VAT Group | Not permitted | |
| VAT recovery foreign businesses | Permitted. Non-EU businesses must have reciprocity agreement to support claim | |
| Fiscal Representative | Required for non-EU established businesses where not reciprocity agreement in place | |
| Currency | Euro - replaced Kuna HRK Jan 2023 | |
| Administration | Introduction | Croatia introduced VAT in 1998. It joined the European Union in 2013. |
| VAT laws | Croatian VAT Act of 2013 (ZPDV). And VAT bylaws; Also EU VAT Directive which takes supremacy as part of EU membership | |
| Tax Authorities | Porezna uprava. Part of the Ministry of Finance. Zagreb office manages non-resident businesses | |
| VAT Rates | Standard rate | 25% |
| Rates news | Heating VAT cut extended to 2024 | |
| Reduced rates | 13%: overnight accommodation; foodstuffs; catering and restaurants; children car seating; drinking water; certain agricultural supplies; domestic electricity; advertising journals; concert entrance. 5%: basic foodstuffs; books and newspapers; medicines and medical equipment; and cinema entrance. | |
| Zero-rated | Intra-community passenger travel by air and sea; Exports and intra-community supplies of goods; gold to central banks; services related to vessels and aircraft | |
| Exempt | Education; financial services; health, hospital, and social welfare; public postal; letting immovable property; betting and gambling; welfare services; international passenger transport; certain copyrights; private use of motor vehicles where no input VAT claimed | |
| Scope of VAT | Scope of VAT | Provision of domestic taxable goods and services; EU imports; intra-community acquisitions; Distance selling of goods B2C (OSS or IOSS); receipt of services or goods via the reverse charge |
| Time of supply | Goods & Services (general rule) | Goods at time of delivery; services at time of performance. Where no invoice, the latest, the last of the month of supply. Prepayments create VAT tax point except for intra-community supplies. |
| Reverse Charge | General rule applies | |
| Continuous Services | Tax point at the end of each VAT reporting period (monthly for non-residents) when contract over twelve months | |
| Imports | Postponed VAT on imports | |
| Goods on approval and return | General rule applies | |
| Registration | VAT registration threshold | €40,000. Nil for non-residents; €10,000 for pan-EU digital services and goods OSS return. Intra-community acquisitions €10,000. |
| Voluntary VAT registration | Permitted for resident businesses | |
| VAT number format | HR 12345678901 | |
| VAT Group | Not permitted | |
| Non-residents | Permitted, but requires Fiscal Representative for non-EU businesses. | |
| Fiscal Representative | Required for non-EU established businesses where not reciprocity agreement in place or registration for digital services. The Fiscal Representative must be resident in Croatia and becomes jointly and severally liable for their clients' VAT | |
| Digital Services | The Croatia participates in the EU single One Stop Shop (OSS) VAT return for digital, telecoms and broadcast services. This was formerly the MOSS regime until 30 June 2021 | |
| Pre VAT registration costs | Permitted for costs directly related to the development of the taxable supply | |
| VAT Invoices | Issuance | No time limits subject to tax point (see separate). Intra-community supplies should be invoiced by 15th of the following month at the latest. Not required on financial services. |
| Content | Date; unique sequential invoice number; name and address of supplier and customer; Customer VAT number for intra-community supplies or reverse charge; date of supply or advance payment if different from invoice date; Description, quantity or units etc of supply of goods or services; price per unit; taxable amount; VAT charged; rate (broken out if supplies at different rates); total; explanation if zero-rated supply. | |
| E-invoices | E-invoicing proposals | |
| Simplified invoices | Permitted for transactions not exceeding HRK 700. For retail where online VAT cash register used (see separate), permitted if transaction does not exceed €1,000 (€1,600 if non-cash e.g. credit card). Not permitted for intra-community supplies. | |
| Self-billing | Permitted by mutual written agreement between the supplier and customer. | |
| Retention of invoices | Ten years. Accounting Law separately requires resident businesses to retain support documents for eleven years. Records may be digitised with specific controls over creation, retention and access for tax office. They must be kept for 11 years after the end of the accounting year of any transactions under audit. May store records in other EU member statement with notification to the tax office. | |
| FX rules | Euro. Other currencies may be used, but must show taxable amount and VAT due in Euro. Should use ECB or Croat Central Bank rate at tax point date. | |
| Invoice corrections | Credit notes with reduced disclosures may be used. Must refer to original invoice number and reason for adjustment. Must receive confirmation from customer that their input VAT has also been changed. | |
| Compliance | Right to deduct | Excluded: 50% passenger vehicles and other craft and related expenditure; business entertainment and gifts |
| Call-off stock | Following the EU's 2020 Quick Fix harmonisation reforms, stock may be transferred from an EU state to an customer location/warehouse in Croatia without triggering a VAT registration and supply for a non-Croat supplier. Title has not passed until the customer takes the goods for production and sale. At which time a zero-rated transaction may be effected. This must happen within 12 months of the original movement | |
| Reverse Charge - B2B | In addition to reverse charge on B2B cross-border services, RC applied: all supplies of goods and services by non-resident. However, if non-resident Croat VAT registered, then RC not applied. Natural gas and electricity supply. Domestic reverse charge: scrap materials; construction; immovable property; CO2 emission certificates | |
| Cash discounts | Discounts taken-up after time of invoice payment, adjusting written confirmation should be used. | |
| Bad debt relief | Permitted via credit note and written confirmation from customer they have adjusted their input deduction. | |
| Import VAT deferment | Postponed VAT accounting now permitted via the next VAT return, declaring the import VAT via the reverse charge.. Exemption is allowed in the case of an import and immediate (30 days) intra-community supply. | |
| VAT warehouse | Authorised for specific locations where goods may be modified, re-sold etc VAT exempt. Goods applicable as per VAT Directive Annex V. Bonded warehouses also operated for custom duties and VAT-free trading prior to clearance into Croatia. | |
| Supply & install | If a non-resident supplies an instal service with goods to a VAT registered resident or non-resident business, the reverse charge applies. The customer is responsible for reporting the VAT | |
| Use and enjoyment services | Croatian VAT applies on the following: rental of movable property to consumers (transport exempted). | |
| Capital goods adjustment period | Movable property: five years. Immovable property: ten years | |
| Non-residents VAT recovery | EU businesses may apply for Croat VAT reclaims through the electronic portal of the tax authorities of their company of residency (8th Directive). Quarterly claims above €400 permitted, with final claim above €50 by 30 Sept of following year. Non-EU businesses must submit a paper-reclaim with supporting invoices via the Croatian authorities directly (13th Directive). For non-EU businesses, Croatia does require a reciprocal agreement with the country of residence of the claimant (currently Switzerland, Serbia, Norway and the UK (pending)). Non-EU businesses do not have to appoint an Croatian resident Fiscal Representative for the reclaim process | |
| VAT on Digital Services | Croatia follows the EU VAT on digital services regime, introduced in 2015. This includes participation in the One-Stop-Shop (OSS) single EU VAT return (formerly MOSS until 30 June 2021) | |
| Live events | ||
| Distance selling threshold for goods | Nil. Following the EU ecommerce VAT package reforms from 1 July 2021, local Croat VAT must be charged on all sales by non-Croatian EU e-commerce sellers shipping from within the EU. Imported distance sales not exceeding €150 liable to Croat sales VAT with IOSS return option | |
| Cash accounting scheme | Permitted for residents with annual sales not exceeding €2 million per annum | |
| VAT registered cash tills | ||
| Statute of limitations | Three years | |
| Other | N/a | |
| VAT Returns | Frequency | Monthly. If annual turnover does not exceed HRK800k then quarterly filings for resident businesses only - except businesses undertaking intra-community supplies which most remain monthly filers. |
| Filing method | Electronic via e-Porezna portal | |
| Deadlines (inc payments) | 20th of the month following the reporting period for monthly or quarterly filers for VAT returns. Payments of any VAT due must be made by the last day of the month following the reporting period. | |
| VAT credits | Either rolled over to next VAT return or refund may be requested | |
| Corrections | Corrective return required, with covering letter to tax office to detail changes. It is possible to include minor changes in final December return. | |
| Non-residents | Permitted following similar rules to residents. Fiscal representative required for non-EU businesses | |
| Other filings | Monthly European Sales Listing for goods and services supplies without any threshold by 20th of month following. ESL's may be filed quarterly if reported values do not exceed €50,000 in prior four quarters. Intrastat monthly by the 15th of the following month for supply of goods above threshold: dispatches: €450,000; arrivals: €300,000. This lists sales and purchases line-by-line for VAT. Non-residents are obliged to complete quarterly listings (Form PPO) of supplies they make where the reverse charge was applied to the customer and for any supplier making domestic reverse charge supplies under the reverse charge. All VAT registered business must file EC Acquisitions List detailing goods and services received from other EU states. Filing due by 20th of following month. | |
| SAF-T | N/a | |
| Penalties & interest | Missed returns incur penalties ranging from €265 to €66,400. Also personal fines. Late VAT interest is charged at 5.89% | |
| B2C Distance Selling returns | The Croatian Republic participates in the One-Stop-Shop OSS pan-EU VAT return for distance selling, introduced in July 2021. |
