Croatia Introduces Amendments to the VAT Law

1. VAT Refunds for Non-EU Taxpayers

Taxpayers without a registered office, permanent establishment, or usual residence in the EU are eligible for a VAT refund for 2024 under Article 67 of the Value Added Tax Act. This change facilitates VAT recovery for non-EU businesses.

2. VAT Registration Threshold

The threshold for mandatory VAT registration has been increased to EUR 60,000 for taxpayers whose total supplies of goods or services exceed this amount in 2024. This adjustment aims to reduce the regulatory burden on small businesses.

Businesses that do not exceed this threshold may request deletion from the VAT register by January 15, 2025, unless they voluntarily registered during 2024.

3. Implications for Small Businesses

The increase in the VAT registration threshold is part of a broader effort to support small enterprises by easing compliance requirements. This change is expected to relieve approximately 7,500 businesses from mandatory VAT registration. 

The amendments also include provisions for the deduction of extra VAT charged by tax authorities and align with new EU regulations that allow small businesses in other EU countries to exempt certain supplies from VAT if their turnover is below specified limits.

These changes reflect Croatia's commitment to modernizing its VAT system and enhancing the business environment, particularly for small and medium-sized enterprises (SMEs). By simplifying registration and refund processes, the government aims to foster economic growth and improve compliance among businesses operating within its jurisdiction.