2. srpnja, 2019

CROATIA: Country tax newsletter – June 2019


Export deliveries are basically transactions of goods from the Republic of Croatia to a third country, where a basic document and proof of the customs clearance is the Unique Customs Declaration (Croatian JCD)  or an electronic message IE599 generated by the ECS system.

Export deliveries are exempt from the Value Added Tax pursuant to the Article 45. of the Croatian Value Added Tax Law. In this case, the status of the exporter is linked to the end supplier or buyer and to a third party which is transporting goods on their behalf from the Republic of Croatia to a third country outside the EU.

At the end of April, the Croatian Tax Authority has published its formal explanation on possible application of VAT exemption to the sales of exported goods from the Croatian supplier to the taxpayer without headseat in Croatia, where goods are transported directly from the Croatian supplier to the end buyer in a third country outside the EU.

According to their interpretation, in cases where the first buyer with a headseat outside the Republic of Croatia is indicated in a customs declaration as exporter and goods are being transported to the end buyer in a third country, the Croatian supplier may issue invoice for goods with VAT exemption prescribed by the Article 45. of the Croatian Value Added Tax Law, if the first buyer provides them with the customs declaration showing the first buyer indicated as exporter.

The first buyer of the goods from a Croatian supplier on the territory of the Republic of Croatia must take into account that he firstly needs to register in the Republic of Croatia for purposes of the Value Added Tax, because of acquiring the goods on the Croatian territory and acting in the status of an exporter. Taxpayers with head offices outside the EU must appoint a tax representative in Croatia.


The Law on Electronic Invoices in Public Procurement was adopted in the end of 2018 year, but its Article 7, which prescribes the issuance of electronic invoices in accordance with the European norms, comes into force on 01st of July 2019 year. The transition period was left to the taxpayers in order to prepare and adapt more easily and successfully to the needs of electronic invoicing.

The supply of goods, services and works, where the contracting authority is a state or public administration body or a trading company performing one of the sectoral activities, is regulated by the Public Procurement Act. Such procurement shall be subject to the Law on Electronic Invoices in Public Procurement that is binding on both public contractors and suppliers of goods. The contracting authorities are obliged to receive and execute payments through public procurement contracts only on the basis of electronic invoices, in accordance with the European standard, regardless of the value of the procurement. It is expected that the use of electronic invoices in the public procurement system will significantly reduce administrative costs, postal and archiving costs, as well as reduce the time required for the process and the possibility of errors.

The European norm for electronic invoices is implemented across the EU with a view to reducing the obstacles to cross-border procurement and facilitating participation in public procurement procedures for entities from another EU countries.


According to the Croatian General Tax Law and the Regulations on the Implementation of the General Tax Law, the Ministry of Finance, the Tax Authority of the Republic of Croatia may issue binding opinions on the specific issues of the applicant concerning tax treatment of future and intended transactions in its business.

According to the Tax Authority’s instruction, an application for issuance of a binding opinion may be submitted by a taxpayer who is a resident or a non-resident or its tax advisor, a physical person or legal entity not yet registered as taxpayer or not yet registered as trading entity.

The application must be in writing and may contain a number of issues that relate to one area of ​​application and is submitted electronically via the official electronic website of the Tax Authority or to theTax Authority’s local subsidiary or the Office for Large Taxpayers.

An essential part of the application is a description of intended business transactions and their business and financial consequences. The applicant is also obliged to prepare a response proposal with reference to the relevant legal provisions, citing the facts and providing legal analysis of the presented transaction.

Not later than 30 days after receipt of the application, the Tax Authority may invite the applicant or its tax advisor to hold the final interview before the issuance of a binding opinion.

Within 90 days of the receipt of complete application, the Tax Authority issues a binding opinion. Issuance expenses are charged to a taxpayer and amount between  5,000.00 HRK and 30,000.00 HRK, depending on the applicant’s annual revenue.

Tax Authority does not issue a binding opinion if:

  • the claim does not relate to future and intended business transactions;
  • the application relates to the subject of the initiated tax audit or the subject of a court proceeding or legal remedy involving the applicant as one of the parties;
  • the application relates to a general or hypothetical question;
  • from the content of the application it follows that the applicant has no real intention to undertake the business activities mentioned in the application;
  • the applicant defaults to settle costs or to submit written consent for the payment of additional costs.


At the very start of the 2020 year, in force will be the new Law on Tourist Union Membership Fees.

One part of listed business activities subject to calculation, reporting and payment of Tourist Union Membership Fee will be exempt from it starting with 2020 year:

  • 69.2 Bookkeping, accountancy and audit services; tax advising;
  • 62 Computer programming, consultancy and related activities;
  • 63 Information service activities;
  • 74.1. Photographic activities;
  • 74.3 Translation and interpretation services;
  • 96.02 Hairdressing salons and beauty salons;
  • Some other activities.

The rates for calculating and paying the Tourist Union Membership Fee will be determined only by groups of activities:

  • First group – 0.16150;
  • Second group – 0.12920;
  • Third Group – 0.09690;
  • Fourth Group – 0.03230;
  • Fifth Group – 0.01938.

Business entities registered in municipalities and cities within the specially supported areas (I – IV group of regions) will pay the Tourist Union Membership Fee reduced by 20%.

Physical persons providing hospitality services in the household or in an OPG (Family agricultural economy) pay a lump-sum annual Tourist Union Membership Fee to the tourist boards according to the number of beds, accommodation units and the capacity of the facility for robinson accommodation. The annual lump sums of Tourist Union Membership Fees will be prescribed separately by the special regulations.


Should you need more information on the subjects mentioned above, please feel free to contact us.

Biljana Stanković, Certified Tax Advisor



Venkomir Horvatić, Country Manager