Regulatory updates - Croatia

On March 27, 2026, Law No. 377 on Amendments to the Value Added Tax Law was published in the Croatian Official Gazette.

The law extends the application of the reduced 5% VAT rate for natural gas, district heating, firewood, pellets, briquettes, and wood chips.

Earlier in 2018, the Croatian government sent a bill on electronic invoices in public procurement to the parliament and the decision 94/2018 was published on 17th October 2018.

The timelines of the mandate will be as follows:

• From 1st December 2018: all contracting authorities are obliged to be able to receive e-invoices
• From 1st July 2019: all suppliers to contracting authorities are obliged to issue only e-invoices

The Financial Agency (FINA) is a central information intermediary that performs the service of receiving and sending e-invoices and accompanying documents between suppliers and public contracting authorities, in accordance with the European standard (EN). FINA is a Peppol access point and will be accepting e-invoices that comply with EN 16931-1, i.e. UBL 2.1 or CII.

The central platform is now ready to accept e-invoices, however not all authorities are connected to FINA, which means that the process of connecting public authorities to the platform will continue into 2019. This shall apply to public and sectoral contracting entities as public purchasers, issuers of electronic accounts in public procurement procedures and to information intermediaries providing e-invoice exchange and accompanying documents in public procurement procedures.

FINA is also capable of sending and receiving B2B e-invoices, as FINA owns two platforms – one for businesses and one for public authorities. In the B2B segment they can only accept UBL 2.1 format according to PEPPOL BIS 3.0. There is no current proposal from the Ministry of Economy, Entrepreneurship and Crafts of making B2B e-invoicing mandatory.

“We see a growing trend of countries adopting Peppol, in order to meet the requirements of the eProcurement Directive deadline in April 2019. Croatia is one of the few countries that have an infrastructure in place and ready prior to the deadline”, says Trent Targa, Compliance Manager at Pagero. “Pagero is following the development closely, ready to help businesses meet the requirements and to help send e-invoices to Croatian authorities. Early adopters will not only add value to their operations, but also remain ahead of competitors.“

Taxpayers must prepare for the upcoming changes affecting not only B2B transactions but also B2G and B2C transactions, all of which are within the scope of the newly approved law.

B2B & B2G transactions

One of the most significant developments in the new law is that both B2B and B2G transactions – whether the taxpayer is the issuer or the recipient – will now fall within the scope of mandatory reporting to the Croatian fiscalization system, i.e., using a decentralized CTC exchange model. Furthermore, only e-invoices will be permitted for these transactions.

Transactions with Croatian public entities (B2G) are already being conducted through e-invoices. However, under the new law, taxpayers will soon be required to start reporting these transactions to the fiscalization system.

Lastly, issuers of e-invoices will be required to report such payments through a dedicated service called"¯“e-Reporting.”"¯This service will also allow buyers to"¯reject received e-invoices.

B2C transactions 

Since 2013, businesses have been required to report transactions to the fiscalization system when cash, credit card, or check payments are made. However, under the new law, online payments, such as bank transfers, Google Pay, PayPal, and similar methods, will also fall within the scope of mandatory reporting, all through the same pre-clearance model as before.

Timelines

• September 1, 2025 – it will be possible to start testing the e-invoicing environment for B2B & B2G transactions;

• January 1, 2026 – online payments for B2C transactions will now be in the scope of reporting to the fiscalization system. This means that all B2C transactions will be in the scope of reporting, regardless of the payment method;

• January 1, 2026 – All VAT taxpayers must issue and receive e-invoices for B2B & B2G transactions. Issuers and recipients must report such transactions to the fiscalization system;

• January 1, 2026 – Businesses not registered in the VAT system – including income and profit taxpayers, as well as budgetary and non-budgetary users – must have capabilities to receive e-invoices and report them;

• January 1, 2027 – Businesses not registered in the VAT system – including income and profit taxpayers, as well as budgetary and non-budgetary users – must issue only e-invoices and report them.