VAT Number Format In Croatia

All EU member states have a fixed format for their VAT numbers. In Croatia, it includes 11 digits and the prefix HR (e.g., HR12345678901).

VAT Rates In Croatia

The standard VAT rate in Croatia is 25%, with reduced rates of 13% and 5% on certain goods and services.

• 25% (Standard) – Applies to all taxable supplies, with certain exceptions
• 13% (Reduced) – Some foodstuffs (fresh or chilled meat and fish), accommodation, concert tickets, a supply of live animals, and some agricultural supplies
• 5% (Reduced) – Some foodstuffs (e.g., bread, dairy products, meats, baby food), certain medicines and medical equipment and accessories, daily newspapers, and cinema tickets.
• 0% (Zero) – Exportations

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VAT Payments And Returns In Croatia

All businesses with Croatian VAT number must submit periodic VAT reports and payments.

VAT Returns Frequency In Croatia

For all companies that operate in Croatia, VAT returns must be submitted monthly or quarterly, depending on the annual revenue of the business entity.

• Monthly – by the 20th of the following month if the annual revenue is higher than HRK 800,000 (EUR 106,000).
• Quarterly – by the 20th of the following month if the annual revenue is less than HRK 800,000 (EUR 106,000).

Penalties in case of late filings or misdeclarations

In the case of the late filing of VAT returns and payments, the Croatian government prescribed the penalties as follows:

Non-registration and/or late registration

A penalty in the amount between HRK 1,000 and HRK 200,000 (EUR 130 – EUR 27,000) for the business entity, and HRK 500 – HRK 40,000 (EUR 75 – EUR 5,300) for the responsible person.

Non-payment or late payment of the VAT may lead to the following penalties:

• For failure to pay VAT, the penalty is between HRK 2,000 and HRK 500,000 (EUR 260 and EUR 67,000) for the business entity, and from HRK 1,000 to HRK 50,000 (EUR 130 – EUR 6,700) for the responsible person.
• Late payment of VAT:

• an interest-penalty at the annual rate of 12% may be imposed to the taxpayer (applicable until 1 August)
• from 1 August to 31 December, the applicable penalty interest is 8,14%
• from 1 January to 30 June, the applicable penalty interest is 8,05%
• from 1 July to 31 December, the applicable penalty interest is 7,88%

Submission of incomplete or incorrect VAT returns, non-submission or late submission of VAT returns is subject to fines from HRK 2,000 to HRK 500,000 (EUR 260 to EUR 67,000) for the business entity and between HRK 1,000 and HRK 50,000 (EUR 130 and EUR 6,700) for the taxpayer’s responsible person.

According to Art. 79 (12) of the Croatian VAT Act, invoices must contain at least the following information:

• place and date of issuance
• a unique, sequential number of the invoice
• supplier data (company name, address, VAT number)
• customer data (address and other data if available, VAT number)
• name of the operator who created the invoice
• full description of goods and services provided
• quantity of goods and services provided
• net price per unit
• shipping date
• the net, the taxable value of the invoice
• rate and amount of VAT applicable for the category of goods and services provided
• the invoice total, the gross amount

Penalties for non-compliance with invoicing and accounting obligations

Non-compliance with invoicing and accounting obligations will be penalized from HRK 2,000 to HRK 500,000 for the business entity and from HRK 1,000 to HRK 500,000 for the taxpayer’s responsible person.

From 2018, all invoices in public procurement must be issued electronically. B2B and B2C electronic invoicing is permitted but currently not mandatory.

Real-time reporting to the Croatian Tax Authorities (Porezna Uprava) is mandatory for all transactions paid in cash or using cash-substitutes (credit and debit cards).

This process of real-time reporting is called ‘fiskalizacija‘ (eng. Fiscalization) and works as described below:

1. The entrepreneur sends an electronically signed XML data message about the transaction to The Croatian Tax Authority (Porezna uprava). This XML data message must include also automatically generated issuer’s security number (ZKI – zaštitni kod izdavatelja)
2. Croatian Tax Authority (Porezna uprava) checks the XML message, adds a unique invoice identity code (JIR – jedinstveni identifikator računa), and sends back confirmation to the entrepreneur.
3. Entrepreneur issues a receipt (including the JIR number, ZKI number, and the QR code) and provides it to the customer.
4. The customer receives the receipt.
5. Registration of the sale can be verified through the web application of the Tax Authority by entering JIR or by scanning the QR code. The customer can verify the authenticity of the received invoice.