In the last month of 2019, Croatia published amendments on its VAT system which generally apply as of 1 January 2020. The most important changes introduced included implementation of the 2018/1910 EU Directive (harmonization and simplification for cross-border trading) in relate to call-off stock arrangements and chain transactions; a reduced 13% rate applicable to the preparing and serving meals inside/outside a catering location; as well as a change in the threshold of the cash accounting scheme (7.5 million HRK, up from 3 million HRK). Additionally, VAT liability is to be corrected when the tax base is amended in case of taxpayers not having a registered office or is not registered in Croatia.
During the last few months, in the face of the crisis, further measures were introduced. Notably, entrepreneurs are allowed to file a request for deferral of VAT under the condition that their revenues, net of VAT, do not exceed 7.5 million HRK in 2019 as well as if they show at least a 20% revenue decrease and their tax liability is related to unpaid invoices. Those taxable persons that were granted VAT deferral for amounts originally due by 31 May 2020, will have to settle them until 31 July 2020.
VAT exemptions have been introduced for donations related to the COVID-19 situation; exemptions are applicable for customs duties as well as VAT on imports (assuming goods were donated or imported before 20 June 2020).
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