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Croatia joins the European Union today and implements EU VAT

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Croatia today becomes the 28th member of the European Union today.  Accession to the free trade zone includes the implementation of the EU VAT Directive.

Croatia has spent the past year introducing a series of changes to its VAT regime in preparation for joining the EU.  Its system now largely mirrors the standard VAT regime.

Key facts for Croatian VAT regime

  • Croatian VAT rate 25%
  • Goods or services trade with other EU member states are now treated as intra-community arrivals and dispatches (instead of imports and exports).  These are nil-rated for VAT
  • The place of supply for services is the location of the recipient, and the reverse charge applies if the supplier is from outside of Croatia
  • Non-residents must register for Croatian VAT if providing: domestic supplies; imports; live events; sales to consumers over the internet; receiving reverse charge supplies;
  • There is no VAT registration threshold for non-residents, except for internet retailers (approx €35,000 per annum)
  • Non-resident must appoint a local representative agent
  • VAT returns are monthly, due by the 20th of the following month, unless annual turnover is below HRK 800,000 (€105,000)
  • Annual VAT returns are due at the February of the year following
  • The Intrastat threshold for reporting despatches and arrivals is HRK 1.7billion (€250,000)

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