Key VAT changes for Croatia effective from January 1, 2026

Here are the key VAT changes for Croatia effective from January 1, 2026, or later:

Croatia will implement Fiscalization 2.0, mandating electronic invoicing (e-invoicing) for all VAT-registered businesses for domestic B2B, B2G, and B2C transactions starting January 1, 2026. E-invoices must be issued and reported in real time, using standardized digital formats via platforms such as the Peppol network. Non-VAT registered entities and public bodies will have until January 1, 2027, to comply.
The Fiscalization Act reforms expand the scope of fiscalization to include all invoices related to final consumption, including invoices issued to consumers and employees regardless of payment method. Businesses will be required to use a revised fiscalization service incorporating advanced compliance controls, optional buyer identification (OIB) reporting, and functionalities like correcting receipt data and managing business hours.
Several amendments to the VAT Act are under consultation, proposing extended deadlines for VAT declaration submissions, elimination of special invoice record-keeping requirements, waiving invoice rules for certain exchanges within Croatia, and removing the need for recipient consent for mandatory electronic invoices. These changes aim to reduce administrative burdens, with an effective date of January 1, 2026.
Other key tax changes include differentiated VAT rates at 16%, 10%, and 5% for specific goods and services, introduction of voluntary, mandatory, and conditional VAT registration categories, and new rules for deregistration and suspension of electronic invoice issuance starting 2026.

Overall, Croatia is moving towards comprehensive digital VAT compliance aligned with EU standards, focusing on e-invoicing, real-time tax reporting, and administrative simplification starting January 1, 2026.

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