Key takeaways
- Croatia VAT rates: The standard VAT rate is 25%, with reduced rates of 13% and 5%, plus a 0% rate for certain international transport services.
- Registration threshold: Resident businesses must register once turnover exceeds €40,000, while non-EU sellers must appoint a fiscal representative.
- Filing & penalties: VAT returns are filed monthly or quarterly, and late filings or payments can lead to fines up to €66,400 and 5.89% interest on unpaid VAT.
Croatia, a vibrant country with a growing economy and a strategic position along the Adriatic Sea, is an increasingly attractive destination for businesses looking to expand into new markets. To make a success of any expansion, though, it's essential to have an understanding of the local VAT (Value Added Tax) regulations.
What is the Croatian VAT rate?
VAT is known as Porez na dodanu vrijednost (PDV) in Croatia. The standard Croatian VAT rate is 25%, with two reduced rates of 13% and 5% for specific categories of goods and services. Croatia also has a 0% VAT rate.
Registering for VAT in Croatia
Businesses based in Croatia with an annual turnover exceeding €40,000 must register for VAT and begin charging and remitting VAT on taxable supplies. For non-resident businesses, there is no threshold that must be reached before they are required to register for VAT.
The distance selling threshold for businesses in the EU is set at €10,000. If your annual cross-border sales to Croatia exceed this amount, or if you store products in the country or participate in a fulfillment program like Fulfilled-by-Amazon (FBA) involving Croatia, VAT registration is necessary.
Applications for VAT registration can be made at the Croatian Tax Administration. They should be submitted by post and include all relevant documents requested by the tax authorities. Once the application has been received, it usually takes no more than two weeks to receive a Croatia VAT number.
Fiscal representative in Croatia
Non-EU businesses selling in Croatia must appoint a fiscal representative. This representative is jointly responsible for the company’s Croatian VAT compliance.
Croatian VAT return filing and penalties
In most cases, monthly filings are required in Croatia. Businesses with an annual turnover below €105,000 and no intra-community acquisitions can file quarterly returns. Filings must be made electronically via the e-Porezna portal.
Croatia VAT returns are due by the 20th of the month following the reporting period, with VAT payments due on the last day of the month of the same reporting period.
Penalties include fines of between €265 and €66,400 for late VAT returns, while late payment incurs interest of 5.89%.
Croatian Intrastat declarations
Businesses exceeding specific sales thresholds need to submit Intrastat returns in Croatia. The threshold is €400,000 for arrivals and €200,000 for dispatches. Intrastat declarations should be filed by the 15th of the month following the reporting period. Non-compliance can result in fines.
Reverse charge in Croatia
The reverse charge mechanism in Croatia transfers VAT responsibility from the supplier to the recipient for certain goods and services. This mechanism is widely used for intra-community acquisitions as well some domestic supplies, with VAT accounted for in the recipient’s VAT return.
Frequently asked questions
What is the VAT rate in Croatia?
The standard Croatian VAT rate is 25%, with reduced rates of 13% (for food, accommodation, and utilities) and 5% (for books, medicines, and daily newspapers). A 0% rate applies to intra-EU and international passenger transport (excluding rail and road).
When do I need to register for VAT in Croatia?
Resident businesses must register once turnover exceeds €40,000, while non-resident businesses must register immediately upon conducting taxable activities. The EU-wide €10,000 threshold applies for distance selling.
How do I register for VAT in Croatia?
Businesses must apply to the Croatian Tax Administration by post, submitting all required documentation. Once processed, a Croatian VAT number is typically issued within two weeks.
Do foreign businesses need a fiscal representative in Croatia?
Yes. Non-EU businesses are required to appoint a fiscal representative, who shares joint responsibility for VAT compliance and reporting.
How often must VAT returns be filed in Croatia?
VAT returns are generally filed monthly, though businesses with turnover under €105,000 and no intra-EU acquisitions may file quarterly. Returns are due by the 20th of the following month, and VAT payments by the end of that month.
Are Intrastat declarations required in Croatia?
Yes. Businesses must file Intrastat returns if annual trade exceeds €400,000 for arrivals or €200,000 for dispatches. Declarations are due by the 15th of the following month.
