Croatia VAT |
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Croatia implemented changes to their VAT legislation on 1 January 2010 in order to align themselves further with EU Community VAT law in anticipation of Croatia's accession to the EU. CROatian VAT LawCroatian VAT law is administered by the Croatian Tax Administration (Porezna Uprava) under the Ministry of Finance.
CROATIAN VAT Registration and tAX REPRESENTATIONUnder Croatian VAT legislation, an enterprise carrying out deliveries of goods or services in Croatia, without having a registered office, business unit, permanent residence or habitual abode in Croatia, will be treated as a Croatian VAT payer, unless the Croatian service recipient is liable to self-assess and pay VAT ( i.e. if the reverse charge mechanism applies). The rule also applies where a foreign enterprise acquires goods in Croatia and makes further deliveries in Croatia. The foreign enterprise is required to register for VAT purposes and appoint a tax representative (who is a Croatian taxpayer) authorized to carry out functions related to the calculation of tax and payment on behalf of the nonresident. The tax representative must then submit an application for tax representation to the tax authorities and request that the foreign enterprise be included in the register of VAT payers. The tax representative is liable for the payment of tax, penalty interest and any other penalties relating to transactions carried out in Croatia, and is jointly liable for the calculation and payment of foreign enterprise VAT. The obligatory VAT registration threshold in Croatia is HRK 85,000 (Approx. EUR 11,600) for all traders. Once this threshold is crossed in particular fiscal year, the company is obliged to submit an application for registration by 15 of January on the following year. An enterprise may, if they wish, apply voluntarily on the basis of the expected turnover.
Croatian VAT ComplianceThere are detailed rules controlling the recording and processing of Croatian VAT. These include guidelines on:
Croatian VAT RatesThe standard VAT rate in Croatia is 25%. Click here to read about the 2% VAT increase in March 2012. There is a reduced VAT rate of 10% for: 1. Accommodation services; 2. Daily and periodic newspapers and magazines printed on paper. VAT at a rate of 0% is applicable on a range of goods. There are many variations to the rates above, including exempt and zero-rated taxable supplies. Please contact us to learn more:
CROATIAN VAT ReturnsCompanies with a Croatian VAT number must submit periodic returns detailing all supplies (sales) and inputs (purchases). VAT returns in Croatia are submitted on a monthly or quarterly basis depending on turnover - if annual sales are less than HRK 300,000, appr. EUR 41,000. The deadline for submission of periodic returns is the end of the month following the VAT period end.
Croatian VAT RefundsNon-resident persons that have no legal seat, fixed establishment or place of residence in Croatia, are entitled to a refund of Croatian VAT, provided that they have not made taxable supplies for which they are liable to account for VAT in Croatia, and that there is a reciprocity agreement for Croatian business. For more details, click here to read about our VAT Recovery service.
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