Croatia joins the European Union today and implements EU VAT

Croatia today becomes the 28^th member of the European Union today.  Accession to the free trade zone includes the implementation of the EU VAT Directive.

Croatia has spent the past year introducing a series of changes to its VAT regime in preparation for joining the EU.  Its system now largely mirrors the standard VAT regime.

• Croatian VAT rate 25%
• Goods or services trade with other EU member states are now treated as intra-community arrivals and dispatches (instead of imports and exports).  These are nil-rated for VAT
• The place of supply for services is the location of the recipient, and the reverse charge applies if the supplier is from outside of Croatia
• Non-residents must register for Croatian VAT if providing: domestic supplies; imports; live events; sales to consumers over the internet; receiving reverse charge supplies;
• There is no VAT registration threshold for non-residents, except for internet retailers (approx €35,000 per annum)
• Non-resident must appoint a local representative agent
• VAT returns are monthly, due by the 20^th of the following month, unless annual turnover is below HRK 800,000 (€105,000)
• Annual VAT returns are due at the February of the year following
• The Intrastat threshold for reporting despatches and arrivals is HRK 1.7billion (€250,000)