Croatian currency kuna to euro: Companies must start the changeover now

Croatia will introduce the euro on 1 January 2023. Companies must already declare both currencies, for example on payslips. The Ecovis experts know what bosses must consider.

The introduction of the euro in Croatia is a significant economic step for the entire community, especially for entrepreneurs who will need to undertake a series of actions during 3 key periods:

• The preparatory period
• The period of dual circulation
• The period after the end of dual circulation

The preparatory period, which lasts for 6 months before the introduction of the euro, has already begun. This is the period when the exchange rate of the local Croatian kuna (HRK) against the euro has been fixed at 1 EUR = 7.5345 HRK. The preparatory period is particularly challenging because it comes with the obligation to dually declare both currencies. Beginning on the first Monday in September 2022, the preparatory period ends 12 months after the date of introduction of the euro (i.e., 5 September 2022 to 31 December 2023). This means, for example, that if the salary for August was paid after 5 September 2022, the employer is obliged to provide the employee with a payslip in both currencies.

Other adjustments are logical: Contracts concluded before 1 January 2023 do not need to be adapted. The same applies to financial and tax reports, depending on the reporting period. Thus, reports for the period before 1 January 2023 will be prepared in kuna and for reporting periods after that date they will be prepared and reported in euro.

We can support you in implementing your business transactions correctly and on time during the key phases.

Dijana Dolušić, Chief Executive Officer and Senior Consultant, ECOVIS Croatia, Zagreb, Croatia

For businesses with a reporting period that is different to the calendar year, it is important to know that if the end of the business year falls after the introduction of the euro, then financial statements must be prepared in euro. Furthermore, financial statements showing comparative years must be presented in euro for both years using the fixed exchange rate conversion

On the day of the introduction of the euro, banks and other payment service providers are obliged to convert the funds in their accounts from kuna to euro at the fixed conversion rate, free of charge. At the same time, the numbers of the transaction accounts where the funds are recorded remain the same.

For further information please contact:

Dijana Dolušić, Chief Executive Officer and Senior Consultant, ECOVIS Croatia, Zagreb, Croatia
Mail: zagreb@ecovis.com