You are a foreign entrepreneur – what are your tax obligations when delivering goods and services in the Republic of Croatia according to VAT regulations?
If, as a foreign taxpayer from the EU or third countries, you sell goods or services in Croatia to other domestic or foreign taxpayers, your tax status depends on whether you are registered for VAT in Croatia. If you are registered and have a Croatian VAT identification number, according to the VAT regulations you are considered a Croatian taxpayer and accordingly you are obliged to follow the provisions of the VAT Act. This means that you must issue invoices and calculate Croatian VAT just like any other Croatian/domestic taxpayer.
On the other hand, if you are a foreign taxpayer who is not registered for VAT in Croatia, and you deliver goods in the country, then the responsibility for calculating VAT passes to Croatian taxpayers, including small taxpayers. In such cases, domestic taxpayers must assume the obligation to calculate and apply the provisions of Article 75, Paragraph 2 of the VAT Act. Regarding the provision of services, the tax position depends on the place of taxation of the service, which will also affect the content of the invoice that you will issue as a foreign taxpayer.
Obligation to register for VAT purposes of foreign taxpayers in the Republic of Croatia
If you are a foreign taxpayer, you must register for VAT purposes in Croatia in several specific situations. First, the obligation to register arises when you make deliveries of goods and services for which the place of taxation is in Croatia, and the tax liability cannot be transferred to the recipient of those deliveries.
Also, you are obliged to register when importing goods, in cases where procedures 42 and 63 are applied, provided you do not have a tax representative in Croatia. These procedures refer to specific circumstances such as the import of goods that are exempt from VAT when acquired in the EU, but do not include standard imports.
For certain services, defined in Articles 18 to 23 of the VAT Act, which relate to real estate or movable property within Croatia, as a foreign taxpayer you also have an obligation to register if the tax obligation cannot be transferred to the recipient of the services.
In addition, as a foreign taxpayer, you need to register for VAT in the case of exporting goods from Croatia, acquiring goods within the EU or moving goods from other member states to Croatia. The obligation also applies to long-distance deliveries of goods and services when the foreign taxpayer is not registered for a special taxation procedure through the OSS (One Stop Shop) system.
Finally, deliveries of goods from Croatia to other EU member states may also create an obligation to register, depending on the nature of the transaction and the regulations that apply to those deliveries.
Author, Admin – FINACRO doo
Sources:
Value Added Tax Act (Nov. Order No. 73/13 – 35/24)
Value Added Tax Ordinance (Nov. Order No. 79/13 – 39/24)
Council Directive 2006/112/EC of November 28, 2006 on the common value added tax system
RRIF