Croatia introduces new VAT rate and rules

The Croatian VAT authorities have adopted new VAT rules and standard VAT rate under a new VAT law. Key changes include:

• There are new restrictions on the deductibility of input VAT in returns. These include: supply of aircraft; land transportation vessels; cars; buses; and other road vehicles.
• The VAT registration threshold has risen from HRK 80,000 to HRK 230,000.
• The standard VAT rate has risen from 23% to 25%
• The reduced VAT rate, currently 10%, has been extended to include baby food, water supplies and sugar.
• The above changes are effective from 1 March 2012.

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