Croatia VAT regime prepares for European Union membership

Thu 23rd May 2013

Croatia is set to become the 28 member of the European Union on 1 July 2013.  The VAT regime is starting to change in preparation for its accession.

Croatian VAT changes include:

  • Imports and exports between Croatia and other EU member states will be re-categorised at acquisitions and dispatches, respectively.  The EU VAT rate on such movements will be zero rated, as an intra-community supplies.
  • EU companies selling goods over the internet to Croatian consumers will need to register in Croatia as a non-resident trader if their sales exceed the e-commerce EU VAT threshold of HRK 270,000 (approx. €35,000 per annum).  Non-EU companies will have to register immediately.
  • In a significant concession, goods imported into Croatia from outside of the EU and then sent onto other EU member states will be exempt from Croatian import VAT
  • VAT on services to non-Croatian companies will shift to the location of the customer, therefore reducing any Croatian VAT charge.
  • VAT returns must be submitted on the 20th of the month following the month end, along with an annual VAT return at the end of February following the year end.
  • The Croatian VAT refund system for EU companies will be improved to follow the EU rules.

More changes will be coming in the forthcoming months as the VAT Law is finalised.

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