|Standard VAT Rate||Digital Reporting Requirements||VAT on Cross-Border Electronically Supplied Services||Tax Authority Website|
|25%||Yes||Yes||Ministry of Finance - Tax Administration (Porezna Uprava Ministarstvo Financija)|
VAT Rates in Croatia
The standard VAT rate (”Porez na dodanu vrijednost” (PDV)) in Croatia is 25%, with some services exempt from Croatian VAT, such as postal service, hospital services, health care services, and financial services.
|VAT Rates||Rate Type||Description|
|25%||Standard Rate||Applies to all taxable supplies, with certain exceptions|
|13%||Reduced Rate||Fresh meat products, restaurants, and catering services, amongst others, are subject to a reduced VAT rate in Croatia|
|5%||Reduced Rate||All types of bread and milk, medical products, and cinema tickets, amongst others, are subject to a reduced VAT rate in Croatia|
|0%||Zero Rate||Intra-Community supplies of goods, exports of goods to non-EU countries|
VAT Registration Thresholds in Croatia
- VAT registration threshold for domestic established sellers: EUR 39,816.84 in annual turnover
- VAT registration threshold for non-established sellers: no VAT registration threshold for non-established sellers
- VAT registration threshold for intra-EU distance selling of goods and B2C telecommunications, broadcasting & electronic services (TBE): EUR 10,000 (net) per calendar year
- VAT registration threshold for non-resident, non-EU based suppliers of Electronically Supplied Services (ESS): No registration threshold
Croatian VAT Number Format
The Tax Administration of the Ministry of Finance assigns Personal Identification Numbers (OIB) as unique identifiers for both individuals and businesses. OIB is assigned to the following persons:
- Croatian citizens by birth or by the acquisition of Croatian citizenship;
- Legal entities established in Croatia;
- Foreign natural persons and legal entities when there is a basis for their surveillance in the Republic of Croatia (registration in public records and acquisition of the taxpayer's status).
- For individuals, the Personal Identification Number (OIB) consists of 11 digits.
- For businesses, the Personal Identification Number (OIB) consists of 11 digits.
- For individualsFormat: HR99999999999
- For businessesFormat: HR99999999999
VAT on Electronically Supplied Services (ESS) in Croatia
Digital services in the European Union (EU) are often referred to as Electronically Supplied Services (ESS). Croatia applies the harmonized EU VAT rules for ESS.
- For B2B supplies of such services, the general place of supply rule for services has to be taken into consideration.
- For B2C supplies, the EU ESS rules should apply to foreign companies selling to Croatian consumers (B2C).
Under the EU’s B2C ESS rules, until the sales value reaches EUR 10,000 (including distance sales of goods), the seller can charge VAT where it is resident. Once the sales exceed the threshold, the seller should register for VAT in Croatia, or it can choose to account for the VAT under the EU’s One Stop Shop (OSS) regime.
VAT Rate: 25% VAT is typically applied to the sale of affected Electronically Supplied Services
|Examples of taxable ESS in Croatia|
|Website supply, web-hosting, distance maintenance of programs and equipment|
|Supply of software and updating thereof|
|Supply of images, text, and information and making available databases|
|Supply of music, films, and games, including games of chance and gambling games, and of political, cultural, artistic, sporting, scientific, and entertainment broadcasts and events|
|Supply of distance teaching|
Will your business need to pay VAT on digital services in Croatia in 2023?
Marketplace & Platform Operator Rules in Croatia:
Croatia applies the harmonized European Union’s (EU) VAT rules for marketplace & platform operators.
Supply of goods
A marketplace is deemed to have received and supplied the goods themselves. This transaction is split into two supplies:
- A supply from the underlying supplier to the marketplace (deemed B2B supply)
- A supply from the marketplace to the final customer (deemed B2C supply).
This rule covers the following:
- Distance sales of goods imported to the EU with a value not exceeding EUR 150
- Supplies of goods to customers in the EU, irrespective of their value, when the underlying supplier is not established in the EU (both domestic supplies and distance sales within the EU are covered).
Supply of services
When Electronically Supplied Services are sold through an intermediary, e.g. a marketplace for applications, the intermediary is deemed to have received and supplied the services themselves. Therefore, the VAT liability shifts to the intermediary from the underlying supplier.
Invoice Requirements in Croatia
According to the Croatian VAT Act, invoices should contain the following data:
- Document & general transaction information
- Issuance date
- Invoice number
- Delivery date or the date of receipt of an advance payment if this date is prior to the invoice issue date
- Supplier information
- Name, address, OIB or VAT ID number
- Customer information
- Name, address, OIB or VAT ID number
- Financial transaction information
- Quantity and description or type of the goods delivered or services performed
- Net unit price
- Discounts or rebates if they are not included in the unit price
- VAT rate and VAT amount
- Total gross amount
- Additional information that may be required:
- Reference to VAT exemption
- Reference to Margin scheme — Travel agents
- Reference to Margin scheme — Works of art or Margin scheme — Collector’s items and antiques
- Reference to self-billing
- Reference to reverse charge mechanism
- Tax representative data: name, address, OIB or VAT ID number
Simplified Invoice Requirements
The taxpayer may issue a simplified invoice if the total amount of the invoice does not exceed EUR 100. Such an invoice should contain the following information:
- Invoice number and issuance date;
- Supplier data: name, address, OIB or VAT ID number;
- Customer data: name, address, OIB or VAT ID number;
- Quantity and description or type of the goods delivered or services performed;
- Total gross amount;
- VAT rate and VAT amount.
E-Invoicing & Digital Reporting for Croatia
Croatia was one of the first EU countries where business-to-government (B2G) e-invoicing was introduced. Since December 1, 2018, all contracting public authorities have been obliged to receive electronic invoices. Since July 1, 2019, all suppliers have been obliged to issue only electronic invoices to contracting authorities - the governmental bodies purchasing goods and/or services.
Fiscalization became mandatory in Croatia in July 2019 for all point of sales B2B, B2C, and B2G transactions. Fiscalization is mandatory for self-employed natural persons subject to income tax, and for legal and natural persons subject to profit tax and covers cash transactions. Cash transactions should mean the payment for delivered goods or services using banknotes or coins which are considered to be legal tender, cards, cheques or other similar means of payment, except payments via transaction accounts.
Governmental Body Responsible for E-invoicing and Digital Reporting in Croatia
Ministry of Economy and Sustainable Development (Ministarstvo Gospodarstva I Održivog Razvoja) is the governmental body responsible for e-invoicing in Croatia.
The governmental body responsible for tax matters is the Tax Administration of the Ministry of Finance (Ministrative Financija - Porezna Uprava (PU)).
Financial Agency (FINA) is the leading Croatian provider of financial and electronic services. FINA operates a central national platform for exchanging e-invoices, Servis eRačun za državu.
VAT Payments and Returns in Croatia
Full VAT Returns
|VAT Return Name||VAT Form|
|Filing Frequency||Quarterly filing frequency applies to taxpayers whose annual turnover is below EUR 106,178.25 should file their VAT returns quarterly. However, it is possible to opt for monthly filing. Monthly filing frequency applies to: a) Taxpayers whose annual turnover exceeds EUR 106,178.25; b) Taxpayers who perform Intra-Community transactions, c) Taxpayers, who do not have a registered office, permanent business unit, residence, or habitual residence in Croatia, and are registered for VAT purposes in Croatia (VAT-registered entities)|
|Online filing||mandatory to file tax returns electronically|
|Filing deadline||by the 20th day following the taxation period|
|Payment deadline||the last day of the month following the tax period|
|Local VAT acronym||“Porez na dodanu vrijednost” (PDV)|
|Other requirements||Taxpayers should make all adjustments and corrections for the given calendar year in the VAT return submitted for the last taxation period of the calendar year.|
Croatia does not provide simplified VAT returns for VAT-registered non-resident taxpayers supplying Electronically Supplied Services. Instead, they can avoid VAT registration in Croatia and use the EU One-Stop Shop (OSS) return.
Penalties in case of late filings or misdeclarations
In the case of the late filing of VAT returns and payments in Croatia, the Tax Authority enforces the following penalties:
A penalty between EUR 260 and EUR 66,360 might be imposed if a taxpayer fails to submit in time or does not submit a VAT return at all, pays the VAT late, or does not pay it at all.