The value added tax, or VAT, is a consumption tax assessed on the value added to goods and services. VAT is applicable to all goods and services bought and sold in the European Union. As a member of the EU, Croatian VAT compliance – registrations, returns, ESLs, Intrastat - follow the European Union VAT Directives. The General Tax Code provides the legal framework for the implementation of VAT in Croatia. Our specialists in company registration in Croatia can give you further details on the matter.
According to the EU VAT rules, a Croatian company has to register for VAT in a number of trading situations. These include the following:
• Importing goods into Croatia – if the customers of these goods are not Croatian companies already registered for VAT purposes;
• Buying and selling goods in Croatia, if the customers are not Croatian companies with a local VAT registration;
• Holding goods on consignment warehouses in Croatia for a period longer than three months;
• Selling goods to Croatian customers via internet or catalogues (distance selling);
• Holding events, training in Croatia or live exhibitions with paid admission;
• When self supplying a Croatian company with goods.
In 2010, the Croatian authorities have implemented the VAT package changes which allow companies to apply for a reverse charge process if they are providing services to local Croatian companies. All companies that provide electronic, telecoms or broadcast services to local Croatian companies have to register for VAT in one EU state, under the MOSS scheme. This allows the filing of a single return covering all 28 member states. Our company registration experts in Croatia can tell you if you need to register for VAT and what thresholds apply to this registration.
The standard VAT rate in Croatia is 25%. This rate can be reduced up to 13% or 5%. All accommodation services and certain newspapers are subject to a 10% VAT rate. No VAT is imposed to bread, milk, medical supplies and certain educational services. Insurance and financial services, medical services, welfare, and education services are VAT exempt in Croatia. Croatian companies with an annual turnover which exceeds HRK 230,000 are subject to VAT registration. All exports in Croatia are exempt from VAT.
For more details about the VAT registration procedure, you may contact our specialists in company formation in Croatia.