Croatia VAT Guide 2026: Rates 25/13/5%, 60,000 EUR Threshold

What is VAT in Croatia?

Value Added Tax, known in Croatia as PDV (Porez na dodanu vrijednost), is an indirect consumption tax applied to nearly all goods and services. The end consumer bears the tax, while businesses collect it and remit it to the state.

Croatia uses the standard EU VAT mechanism. If you have done business in any EU member state, the principles will feel familiar. The key difference lies in Croatia's specific rates, thresholds, and filing procedures.

VAT works on a deduction principle:

• Output VAT is the tax you charge on your sales
• Input VAT is the tax you pay on your business purchases
• You remit the difference (output minus input) to the Croatian Tax Administration
• If input exceeds output, you are entitled to a refund

VAT Rates

Standard rate: 25%

This applies to most goods and services, including:

• IT services, consulting, marketing
• Electronics, clothing, furniture
• Construction work
• Professional services

Reduced rate: 13%

This applies to:

• Restaurant and catering services (food and beverages served on premises)
• Hotel and short-term accommodation
• Newspapers and periodicals
• Edible oils and fats
• Child car seats
• Utilities (water supply, waste disposal)

Super-reduced rate: 5%

This applies to:

• Books (including e-books)
• Prescription medicines
• Orthopedic aids
• Medical devices

Zero rate (0%)

This applies to:

• Exports of goods to non-EU countries
• Intra-EU supplies of goods (when the buyer provides a valid VAT ID)

Exemptions without input VAT deduction

Certain activities are exempt from VAT, but the provider cannot deduct input VAT on related purchases:

• Financial services (banking, insurance)
• Healthcare services
• Educational services
• Postal services

Registration Threshold

Mandatory registration: 60,000 EUR in annual revenue.

When a business exceeds this threshold, it must:

1. Register for VAT within 8 days of determining that the threshold has been exceeded
2. Begin charging VAT from the first day of the month following registration
3. Maintain records of all incoming and outgoing invoices

Voluntary registration is possible even below the threshold. This can be advantageous if:

• Most of your customers are VAT-registered businesses (they can deduct your VAT)
• You have significant input costs that include VAT (giving you the right to deduct)
• You do business with companies abroad

Note that once you voluntarily register, you must remain in the VAT system for at least five years before you can deregister.

Input VAT (Right to Deduct)

Full deduction

VAT can be deducted on:

• Materials and raw materials used in your business activity
• Equipment and tools for business operations
• Business premises rent
• Professional services (accounting, legal assistance)
• Business communications (phone, internet)

Partial deduction

• Entertainment and hospitality: only 50% of VAT is deductible
• Passenger cars: no VAT deduction on purchase (unless the vehicle is a core business asset, such as for a car rental company)
• Mixed use: proportional deduction based on the ratio of business vs. personal use

No deduction

• Personal expenses of the business owner
• Costs unrelated to the business activity
• Purchases from businesses not registered for VAT

VAT Filing

Monthly filing

Who: Businesses whose total supplies (including VAT) exceeded 106,178.25 EUR in the previous year.

Deadline: By the last day of the month for the preceding month.

Format: Electronic PDV form submitted through ePorezna (the Croatian Tax Administration's online portal).

Quarterly filing

Who: Businesses whose total supplies are below 106,178.25 EUR per year.

Deadline: By the last day of the month following the end of the quarter.

Format: Same electronic PDV form through ePorezna.

Annual filing

All VAT-registered businesses that file quarterly must also submit an annual VAT return by the end of February for the preceding year. Monthly filers do not submit a separate annual return because their monthly submissions serve as the final calculation.

VAT and EU Trade

As an EU member state since 2013, Croatia follows standard EU VAT rules for cross-border trade. Understanding these rules is essential for any business operating across EU borders.

Purchasing goods from EU suppliers

When you buy goods from a business in another EU country:

• The supplier does not charge their country's VAT
• You self-assess Croatian VAT on the purchase (self-charge mechanism)
• The self-assessed VAT is both output and input VAT simultaneously, making it neutral

Selling goods to EU businesses

When you sell goods to businesses in other EU countries:

• You issue an invoice without VAT (transfer of tax liability)
• The buyer self-assesses VAT in their own country
• You must have the buyer's VAT ID and report the transaction in the ZP form (recapitulative statement)

Services within the EU

For B2B services, the reverse charge mechanism applies:

• The service is taxed in the recipient's country
• You issue an invoice without VAT, including a note about the reverse charge
• The recipient self-assesses their local VAT

This is particularly relevant for IT freelancers and consultants who serve clients across the EU.

VAT and Fiscalization 2.0

Starting January 1, 2026, VAT-registered businesses in Croatia must:

• Issue e-invoices in UBL format
• Use a registered information intermediary (a certified service provider)
• Send invoices through prescribed channels
• The Tax Administration automatically receives a copy of every e-invoice

This means that VAT returns may become partially automated in the future, as the Tax Administration already has data on all issued and received e-invoices.

Frequently Asked Questions

Who is required to register for VAT in Croatia?

Businesses with annual revenues above 60,000 EUR must register. Voluntary registration is possible below this threshold if it makes financial sense for your business.

What are the VAT rates in Croatia for 2026?

The standard rate is 25%. Reduced rates are 13% (tourism, food services, utilities) and 5% (books, medicines, orthopedic aids). Exports and intra-EU supplies to VAT-registered buyers are subject to 0%.

When is the VAT return due?

Monthly filers must submit by the last day of the month for the preceding month. Quarterly filers must submit by the last day of the month following the end of the quarter.

How is VAT calculated?

Output VAT (charged on sales) minus input VAT (paid on purchases) equals the amount owed to the state. If input exceeds output, you are entitled to a refund.

Can I deduct VAT on all purchases?

No. VAT cannot be deducted on personal expenses, entertainment (limited to 50%), passenger car purchases, and other items excluded by law.

What is reverse charge?

Reverse charge is the transfer of the VAT obligation to the recipient of the service. It applies when receiving services from EU businesses and for construction work within Croatia.

This guide is for informational purposes only and does not constitute legal or tax advice. Tax rules change frequently. Consult a qualified Croatian accountant or tax advisor for your specific situation. Last verified against official sources on the date shown above.