VAT (Croatia)

With adaptation to the guidelines of the European Union, the Croatian VAT Act is amended with effect from 01 January 2015. Below you will find an overview of the major changes and additions.

1. The place of taxation in the field of telecommunication, radio and television broadcasting services and electronic supplied services provided to the consumer (non-taxable person) is the country where they are registered, have their permanent address or usually live.
2. The annual VAT return (PDV-K form) will be abolished. The data that were previously reported in the annual VAT return from 01 January 2015 will be included with the December VAT return. For the year 2014, the annual VAT return must still be submitted until 28 February 2015.
3. Under certain conditions the procedure of VAT taxation basis on received payments is allowed. One of these conditions is that the value of the goods and services in the previous calendar year may not exceed 3,000,000.00 HRK without VAT. The application for the VAT taxation basis on received payments must be submitted no later than January 20, 2015 to the competent tax authority.
4. The mini One Stop Shop (MOSS) comes into force on 1 January 2015 and will allow taxable persons supplying telecommunication services, television and radio broadcasting services and electronically supplied services to non-taxable persons in Member States in which they do not have an establishment to account for the VAT due on those supplies via a web-portal in the Member State in which they are identified. This scheme is optional, and is a simplification measure following the change to the VAT place of supply rules, in that the supply takes place in the Member State of the customer, and not the Member State of the supplier. This scheme allows these taxable persons to avoid registering in each Member State of consumption. The mini One Stop Shop mirrors the scheme in place until 2015 for supplies of electronically supplied services to non-taxable persons by suppliers not established in the European Union.
5. The reasons for the denial of the allocation of VAT ID number by the tax authority or the suspension of already allocated VAT ID number will be expanded further. VAT ID number can be suspended in case of the suspected tax fraud particularly at international level.
6. Ordinance on amendments to the Rules of Procedure of achieving liberation from payment of VAT and excise duties for diplomatic and consular offices, institutions and bodies European Union and international organizations will be provided for cases in which diplomats exercised directly exemption from payment of VAT, and which will be implemented through the VAT refunds.
7. As of 01 January 2015, there is a change in the VAT Act in relation to land, building plots and real estate.
   • VAT is taxed on
   • delivery of building land
   • delivery of real estate before the first residence including the sale of these within two years
   • the real estate transfer tax is taxed on:
   – Land, except building land
   – delivery of real estate or their parts and land on which the same are built except for delivery which is taxed with VAT