Navigating Croatian evolving e-invoicing and tax regulations can be challenging. This guide provides an overview of the latest requirements to help you stay compliant and avoid potential penalties.
In the guide, we will cover:
Regulations Timeline
Croatian E-invoicing Requirements (2024 Updated)
Tax Regulations
Digital Reporting
Penalties
Achieving Global Invoicing and Tax Compliance with Space Invoices
Regulations Timeline
A quick overview of all current and upcoming regulations that Germany mandates regarding e-invoicing and digital reporting. For more details, check out the sections below.
Regulations in Effect:
Mandatory e-invoicing for all B2G transactions,
Voluntary e-invoicing for B2B and B2C transactions.
Upcoming Changes to Croatian E-invoicing:
1st January 2026: Mandatory e-invoicing for B2B transactions in Croatia.
Croatian E-invoicing Requirements (2024 Updated)
In Croatia, current regulations mandate e-invoicing for all B2G transactions. While B2B and B2C e-invoicing is voluntary for now, B2B companies will be mandated to issue e-invoices, starting in January 2026.
To support this transition, Croatia has implemented:
The PEPPOL network
Directive 2014/55/EU
A centralized platform known as e-RAČUN.
Governmental Body Responsible for E-invoicing
The Croatian Tax Administration's online portal is responsible for e-invoicing regulations in Croatia.
Click here to visit their official website.
E-invoicing Formats
In Croatia, e-invoices are typically exchanged using the XML format, usually in either HR e-Invoice or PEPPOL BIS Billing 3.0. Businesses connect to e-RAČUN; facilitating the exchange of electronic invoices between B2B and supports the Croatian government’s commitment to streamlined digital invoicing.
E-invoice Requirements
Invoices must be issued at the time of the supply and for taxable customers, they have to be issued by the 15th of the month following the supply. They can be issued in either electronic or paper form and must include the following components:
Unique Identification Number;
Date of issuance;
Seller’s and Buyer’s Information: full name, address and VAT identification number;
Description of Goods/Services: description, quantity, unit price;
VAT Information: total amount excluding VAT, applicable VAT rate, total VAT amount;
Total amount Including VAT;
Currency;
Payment terms: details of the payment terms, including due date and payment method;
Tax Point Date: If different from the invoice date, the date on which the taxable supply was made or completed;
Reference number;
Electronic signature or other means of ensuring authenticity and integrity.
For businesses with repeating customers, setting up recurring invoices can streamline the billing process by automating regular, automatic payments.
Certain transactions may require additional information:
B2C Transactions:
Simplified Invoices Include:
E-invoice Archiving
E-invoices must be archived for a minimum of ten years.
Tax Regulations
Value Added Tax (VAT)
In Croatia, the standard VAT rate is 25% and applies to most goods and services.
However, Croatia also enforces reduced VAT rates:
13% rate: Applies to various items, including restaurant and catering services;
5% rate: Applies to medical products, cinema tickets and others.
Corporate Tax
The standard corporate tax rate in Croatia is 18%. A reduced tax rate of 10% applies to companies with an annual income of €1 million (HRK 7.5 million) or less.
VAT on Digital Services in Croatia
Digital services in Croatia are generally subject to an 18% VAT. However, foreign companies selling digital services to Croatian consumers have some extra regulations:
EU- based businesses are required to register for VAT in Croatia or opt for the EU's One-Stop Shop (OSS) scheme, if their annual turnover from these services exceeds €10,000.
Non-EU businesses have no minimum threshold; VAT must be charged on all sales to Croatian consumers.
B2C Transactions: The VAT must be collected at the time of sale, it must be charged on the customer's location.
Digital services that are subject to VAT include e-books, software downloads, music, movies, games, and other electronically supplied services.
Digital Reporting
Ukraine has already introduced several digital reporting requirements, with more to come:
B2G e-invoicing is required for all companies;
B2B e-invoicing will be mandatory in 2026;
B2C e-invoicing is voluntary;
Encouraged use of electronic system (ePorezna) for the filing of VAT Returns and for making payments.
VAT Registration and Thresholds
VAT registration threshold for domestically established businesses is HRK 300,000 (approximately €40,000).
For EU-based businesses engaged in distance selling of goods or services to Croatian consumers, the threshold is €10,000.
Non-EU businesses selling into Croatia have no VAT registration threshold; they are required to register for VAT immediately upon beginning sales of goods or services to Croatian consumers.
VAT Returns and Payments
The reporting frequencies are as follows:
Monthly: Reports must be submitted by the 20th day of the month following the reporting period. This is mandatory for businesses with a turnover exceeding HRK 800,000 (approximately €106,000) in the previous year.
Quarterly: Reports must be submitted by the 20th day of the month following the reporting period. This option is available for businesses with a turnover of less than HRK 800,000.
Penalties
If a taxpayer fails to issue an invoice or issues it outside the specified timeframe, they may face penalties ranging from €260 to €66,360.
Failing to inform the Croatian tax administration about storing invoices and related documents outside of Croatia can lead to penalties ranging from €130 to €26,540. Responsible individuals could also face fines ranging from €60 to €5,300 for such violations.
For businesses in Croatia failing to register or are late in registering, fines are ranging from €140 to €26,700. Additionally, responsible individuals within the organization can be fined from €70 to €5,300.
Incorrect VAT returns or failure to comply with invoicing and accounting obligations can result in penalties ranging from €270 to €66,700. Responsible individuals may also face fines ranging from €140 to €6,700.
For late payment of VAT, fines range from €265 to €66,400. Additionally, the interest penalty for late payment of VAT has varied, but was recently noted as being around 12% per annum, emphasizing the importance of making VAT payments promptly to avoid significant financial penalties.
If your business fails to comply with mandatory real-time reporting of transactions, it can face penalties ranging from €3,000 to €500,000, depending on the severity and nature of the non-compliance.
Achieving Global Invoicing and Tax Compliance with Space Invoices
One way to comply with (e-)invoicing, tax, and reporting regulations in Croatia is to use a provider like Space Invoices.
You will be able to:
Use one API for current and future global tax and invoicing compliance, including Croatia
Save time and money with integration that takes less than a week
Support and upsell your clients worldwide, including Croatia
Ensure all documents are archived and successfully reported to responsible institutions
Become a one-stop shop for current and future clients
Streamline processes and eliminate manual errors, saving time and money
Do you have questions about achieving compliance in Croatia?
We are ready to help.
The information in this guide is strictly informative, as regulations and timelines change frequently. While we make every effort to monitor updates and maintain the accuracy of our content, we recommend consulting with a tax professional or e-invoicing specialist for the most reliable and personalized advice. This guide was last updated on November 17, 2024.
Looking to automate real-time reporting and tax compliance for Croatia? Let's talk