VAT update COVID-19

Croatia has made some interventions in the national tax system to ease the negative consequences on the economy due to the outbreak of the virus COVID-19. These measures were implemented through additions in the Regulation on implementing the General tax act (hereinafter Regulation) that has been in effect since March 24th 2020.

Regarding the regulation of the VAT in this time of healthcare crisis, the Regulation enables some businesses to apply for a VAT payment deferral.

Here are the conditions that need to be met:

  • Natural or legal persons who conduct business can apply
  • The applicant mustn’t be in debt towards the Tax administration in the amount higher than 200 HRK, on the day of application
  • A proof that the applicant probably won’t be able to pay his tax liabilities has to be submitted
  • Turnover must be less than 7.500.000,00 HRK in the year 2019 (without the VAT)
  • The applicant must be previously registered with the Tax administration for paying the VAT on invoices issued (not invoices paid)
  • The applicant must also give proof that the issued invoices haven’t been paid.

The proof that the applicant won’t be able to pay his tax liabilities has to be proven by comparing the revenue from last year with the expected revenue from this year for the same period (example: compare revenue for March, April and May). For the measures to apply on an applicant, the applicants expected revenue must be 20% lower than the revenue for the same period in the year 2019.

The request should be sent through the Tax Administration’s online platform ePorezna or directly to the local Tax administration office.

Contribution by A Tax International (ATI)

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