Briefing Document & Podcast: Croatia’s New Fiscalization Act and Mandatory E-Invoicing

I. Executive Summary

Croatia has enacted a new “Law on Fiscalization” which comprehensively regulates the fiscalization of invoices for final consumption and mandates the issuance and fiscalization of electronic invoices (eInvoices) for various taxpayer operations. This law aims to enhance control over realized turnover and streamline invoicing processes. It replaces the previous “Act on Fiscalization in Cash Transactions” and introduces a robust digital framework, including dedicated IT applications, digital certificates, and a system for real-time data exchange with the Tax Administration. Key elements include the requirement for Unique Account Identifiers (JIR) and Issuer’s Security Codes (ZKI) on invoices, the establishment of the Fiscalization System, and the introduction of mandatory e-invoicing for domestic transactions among specified taxpayers.

II. Core Themes and Key Provisions

A. Fiscalization of Invoices in Final Consumption (Part Two)

This section primarily focuses on ensuring effective control of turnover made to end consumers.

Obligation to Fiscalize: Taxpayers must fiscalize invoices paid by “cash, cards, transaction account and in other ways.” (Article 3)
Exemptions: Specific activities are exempt, including:
- Sale of tickets for communal public transport, air, rail, and certain maritime transport.
- Toll collection.
- Fueling aircraft at air service stations.
- Postal services.
- Banking, insurance, and exchange services.
- Turnover recorded through measuring instruments (e.g., electricity, gas, water).
- Healthcare and certain veterinary activities.
- Sales on aircraft during flights.
- Enforcement of funds based on special regulations. (Article 4)
Invoice Content for Fiscalization: In addition to existing requirements, invoices must include:
- Issuing time (hour and minute).
- Operator’s designation (OIB of the operator).
- Method of payment (banknotes, card, transaction account, other).
- Unique Account Identifier (JIR).
- Security Code of the Issuer (ZKI).
- QR code. (Article 7)
Invoice Traceability: Invoice numbers must be structured in three parts: numerical account number, business premises designation, and invoicing device number. This numbering must be uninterrupted and can reset annually. (Article 9)
Digital Certificates: A “digital certificate” issued by trust service providers is mandatory for “electronic signing of invoice elements” and for exchanging eInvoices. (Article 10)
Fiscalization Procedure (Unique Account Identifier – JIR):Invoices for final consumption must contain a JIR. (Article 12)
Taxpayers must use “electronic devices for issuing invoices.” (Article 13(1))
The process involves electronically signing invoice elements and submitting them to the Fiscalization System. The system verifies submission and digital signature, then returns the JIR. (Article 15)
Business Premises Data: Taxpayers must electronically submit detailed information about all business premises to the Fiscalization System via the “ePorezna system” before issuing invoices. This includes OIB, address, type, activity, working hours, and opening/closure dates. Changes must be submitted immediately. (Article 16)
Self-Service Devices: Sales through self-service devices must also be fiscalized at the time of sale by submitting data to the Fiscalization System. (Article 18)
Inability to Issue JIR: If a JIR cannot be obtained due to technical reasons or internet interruption, the invoice can be issued without it, but the data must be submitted to the Fiscalization System within five working days. (Article 21)
Electronic Device Failure: If an electronic invoicing device completely fails, taxpayers must use a certified “bound book of invoices.” All invoice elements from these manual invoices must be submitted to the Fiscalization System within five working days of the device failure, and the obtained JIR must be added to the invoice copies. (Article 22)
No Data Exchange Connection: In areas where data exchange connection is impossible (certified by the Croatian Regulatory Agency for Network Industries), taxpayers may issue invoices from a bound book of invoices until connection is restored. (Article 23)
Invoice Cancellation: Obligations for issuing invoices apply to cancellation invoices, including partial or full refunds. Negative-signed invoices can be fiscalized for refunds. (Article 24)
Notices: Taxpayers must display notices in business premises regarding the obligation to issue invoices and the buyer’s obligation to take and keep them (Article 25), and separate notices for self-service devices (Article 26).
Buyer Obligation: Buyers are obligated to “hold the invoice on paper or in another form after leaving the business premises.” (Article 27)
Cash Payments between Taxpayers: Limits apply to cash payments between fiscalization payers: up to EUR 700.00 per invoice for products/services (Article 30(3)).
Cash Register Maximum: Taxpayers can retain cash at the end of the day up to a defined “cash register maximum.” (Article 31)

B. Issuance and Fiscalization of eInvoices in Taxpayers’ Operations (Part Three)

This part introduces mandatory e-invoicing for domestic transactions between specified taxpayers.

Applicability: Provisions apply to eInvoices arising from “domestic transactions” and for supplies not protected by secrecy levels. (Article 33)
Credibility of eInvoices: eInvoices issued under this Act are considered “authentic documents.” Authenticity, integrity, and legibility must be ensured throughout the retention period. (Article 34)
Storage: Issued and received eInvoices must be kept in their original form for six years from the expiry of the year of issuance, provided they have been fiscalized. (Article 35)
EU Standard Compliance: Every eInvoice must comply with “the EU standard 16931-1:2017, as well as the Technical Specification of the basic use of eInvoices with extensions issued by the Tax Administration.” (Article 36)
Exchange of eInvoices: Primarily conducted through “access points” to ensure secure, standardized, and interoperable data exchange. Other technologies are allowed if authenticity and integrity are maintained. (Article 37)
Obligation to Issue eInvoices: Mandatory for:

- VAT-registered taxpayers (with registered office/residence in Croatia).
- Self-employed income tax payers and corporate income tax payers (with registered office/residence in Croatia, even if not VAT-registered).
- State administration bodies, local/regional self-government units, and budgetary/non-budgetary users registered in the Budgetary/Non-Budgetary Users Register (even if not VAT-registered).

- This applies to domestic transactions to eInvoice recipients, unless specifically exempt. (Article 38(1),(2))
Exemption from e-Invoice Obligation: Transactions paid in cash or by card that have been fiscalized as final consumption invoices (under Article 15) may be exempt from e-invoicing. (Article 39)
Inability to Issue eInvoices: If an eInvoice cannot be issued due to “unavailability of the identifier in the AMS,” a paper invoice may be issued, and data submitted via “eReporting.” (Article 40)
Obligation to Receive eInvoices: The recipient of an e-Invoice “shall be obliged to receive the e-Invoice.” (Article 41)
- Fiscalization of eInvoices:Both eInvoice issuers and recipients are obligated to fiscalize each issued and received eInvoice. (Article 47)
- Specific data points must be submitted to the Fiscalization System, including invoice details, OIBs, tax bases, VAT rates, and bank account numbers. (Article 48(1))
- Issuers must fiscalize issued eInvoices separately from the exchange procedure at the time of issuance (or within five working days for self-issued invoices).
- Recipients must fiscalize received eInvoices within five working days of receipt. (Article 48(3),(4))
- Digital certificates with the OIB of the authorized person are required for fiscalization messages. (Article 48(6))
eReporting System: Provides a mechanism to submit data for deliveries where e-invoices could not be issued (Article 51) and to report eInvoice billing information by the 20th of the month for the previous month (Article 53).
MIKROeRAČUN Application: A free Tax Administration application for issuing, receiving, storing, and fiscalizing eInvoices. It is available to users of the ePorezna system who are not VAT-registered and are not contracting authorities in public procurement. (Articles 54, 55, 56)

C. Common Provisions (Part Four)

Supervision: The Tax Administration and Customs Administration supervise invoice fiscalization. The Tax Administration supervises e-invoicing, with cyber security compliance for information intermediaries handled by a separate competent authority. (Article 65)
Prohibition of Activity: Failure to fiscalize invoices (Article 15, Article 18) can lead to temporary prohibition of activity by sealing until compliance is met (up to eight days). (Article 66)
FiskApplication: The Tax Administration provides access to “FiskApplication,” which enables taxpayers to view fiscalized data, manage eInvoice authorizations, inspect invoice statuses (received/charged/rejected), and view error data. (Article 68)
Penalties (Misdemeanors): Significant fines are imposed for non-compliance, categorized into “most serious,” “serious,” and “minor violations,” with increased fines for repeated offenses. Fines range from EUR 30.00 for buyers failing to retain invoices up to EUR 66,360.00 for legal persons for most serious violations. (Articles 71, 72, 73)

III. Key Definitions

The law provides extensive definitions to clarify its terms:

Directory of metadata services (AMS): An address book managed by the Tax Administration containing identifiers and metadata services for taxpayers, enabling data on eInvoice recipient addresses.
FiskApplication: Tax Administration application for taxpayers to view fiscalized data, manage eInvoice authorizations, inspect invoice statuses, and view VAT returns.
digital certificate: Used for signing fiscalization messages and eInvoice exchange.
MICROeINVOICE: Free Tax Administration application for issuing, receiving, and fiscalizing eInvoices for certain groups.
eInvoice: An invoice issued, sent, and received in a “structured electronic form, which enables its automatic and electronic processing.”
The EU standard: EU standard 16931-1:2017 and Tax Administration extensions.
fiscalization of eInvoices: Submitting prescribed eInvoice data to the Fiscalization System.
Fiscalization of invoices in final consumption: Submitting invoice data to the Fiscalization System to enable control of turnover.
Information intermediary: A legal or natural person providing services for issuing, receiving, and fiscalizing eInvoices and related services.
Unique account identifier (JIR): An alphanumeric record generated by the Tax Administration for fiscalized invoices.
List of Taxpayer Identifiers: Publicly accessible list on the Tax Administration’s Public Portal.
Metadata service (MPS): Network component of an information intermediary for publishing taxpayer identifiers in AMS.
Portal for Testing the Conformity of Solutions for the Exchange and Fiscalization of eInvoices: Portal for testing compliance of access points.
Access point: A taxpayer or information intermediary meeting technical requirements for eInvoice exchange and/or fiscalization.
Turnover in final consumption: Issuance of invoices to citizens or consumers.
Business premises: Any enclosed/open space, self-service device, or mobile place used for business activity.
Security code of the issuer (ZKI): Alphanumeric record confirming the connection between the taxpayer and the issued invoice.
domestic transaction: A supply by an eInvoice issuer to an eInvoice recipient subject to Croatian VAT, where both are located in Croatia.

IV. Implementation Timeline and Transitional Provisions

General Entry into Force: September 1, 2025 (Article 80)
- Staggered Entry into Force (January 1, 2026):Fiscalization of invoices paid by transaction account.
- Exemptions for inland water level crossings, exchange operations, and certain enforcement of funds.
- Submission of working hours/days data (Article 16(8)).
- Tips (Article 20(4)).
- Certification of bound book of invoices (Article 22(2)).
- All provisions related to eInvoices (Parts 3, 4, and related definitions/penalties).
- Staggered Entry into Force (January 1, 2027):Obligation to issue eInvoices for self-employed income tax payers and corporate income tax payers (Article 38(1) points 2 and 3).
- MIKROeRAČUN application for issuing eInvoices (Articles 54 to 56, in part related to issuance).
By-Laws: The Minister of Finance must enact detailed ordinances within 90 days of the relevant articles’ entry into force (Article 77).
Existing Practices: Taxpayers who have adopted internal acts, registered business premises and self-service devices, or possess certificates under the previous “Act on Fiscalization in Cash Transactions” are generally not required to re-register or re-certify unless data has changed. (Article 75)
Termination of Previous Law: The “Act on Fiscalization in Cash Transactions” is repealed upon the entry into force of this new law. (Article 79)

V. Impact and Implications

This new Law on Fiscalization marks a significant move towards digitalization of invoicing in Croatia. It will impact a wide range of businesses and individuals, requiring them to adapt to new technical and procedural requirements for both cash-based and electronic transactions.

Increased Transparency and Control: The real-time data submission, JIR, and ZKI aim to provide the Tax Administration with greater oversight of financial transactions, reducing tax evasion.
Digital Transformation: Mandatory e-invoicing for B2B and B2G transactions, coupled with the “Fiscalization System” and “FiskApplication,” will necessitate significant IT infrastructure and software adjustments for many businesses.
Administrative Burden: While aiming for efficiency, the initial implementation may impose an administrative and financial burden on businesses to update systems, train staff, and ensure compliance.
Free Solutions for Small Businesses: The “MIKROeRAČUN” application offers a free solution for smaller, non-VAT-registered taxpayers to manage their e-invoicing obligations, potentially easing the transition for them.
Penalties for Non-Compliance: The high fines for violations underscore the importance of strict adherence to the new regulations. Taxpayers must ensure their software solutions prevent avoidance of fiscalization.
Interoperability: The emphasis on EU standard compliance (EN 16931-1:2017) and the requirement for “access points” suggest an aim for interoperability within the broader European digital single market.

This law represents a crucial step in modernizing Croatia’s tax administration and payment infrastructure.