Until recently, the Croatian Tax Authority’s official position was that the customer could exercise its right to deduct input VAT when the supply was made, regardless of whether the supplier applies the standard method or the cash accounting scheme. Only customers who applied the cash accounting scheme themselves had to postpone their right to deduct input VAT until they had paid their suppliers. From 1 December 2022 the Croatian Tax Authority changed its position due to the judgment of the Court of Justice of the European Union (“CJEU”) in case C-9/20 Grundstücksgemeinschaft Kollaustraße 136, which deals with the interpretation of Article 167 of the EU VAT Directive (timing of the right of VAT deduction). It follows from the case that, in a scenario in which a taxable person is supplied by a supplier applying the cash accounting scheme, input VAT deduction is delayed until the VAT becomes chargeable.
Source: cms-lawnow.com
