Croatia Tax Package Proposes VAT Act Amendments as Part of Wider 2027 Reform

Croatia has presented a new package of tax amendments covering VAT, corporate income tax, personal income tax and other areas. The Government says the changes aim to simplify the tax system, align it with EU law and improve tax fairness, but the 22 September announcement does not yet provide the detailed VAT provisions.

Croatia has presented a new package of tax amendments to Parliament, including proposed changes to the Value Added Tax Act. The package was presented by Finance Minister Tomislav Ćorić and announced by the Croatian Government on 22 September 2026.

According to the Government, the proposals are intended to further simplify the tax system, align Croatian legislation with the EU acquis and strengthen tax fairness. The package covers several tax laws, including legislation on personal income tax, social contributions, corporate income tax and VAT, as well as the introduction of the Croatian Investment Account.

For VAT monitoring, the most important point is that the Government has now formally confirmed that amendments to the VAT Act are part of the legislative package currently being presented to the Croatian Parliament.

However, the Government announcement does not explain the specific VAT provisions in detail. It confirms that the VAT Act is being amended, but it does not specify new VAT rates, exemptions, invoicing rules, fiscalization requirements or reporting obligations. Those details therefore need to be assessed from the actual draft VAT legislation and related parliamentary documentation rather than inferred from the Government news release.

The tax package is broader than VAT and contains several significant changes affecting businesses and individuals.

One of the most important new measures is a proposed tax on excessive profit margins. According to the Finance Minister, this would apply to approximately 1,800 large and medium-sized companies that significantly increased their profit margins during 2026 compared with the previous three-year period, where that increase is considered disproportionate to their activity and market circumstances.

The Government's stated objective is to redistribute part of the additional profits earned by businesses that benefited from exceptional market imbalances.

The Finance Minister explained that the additional tax base would relate to profit before ordinary corporate taxation, while the remaining profit would continue to be taxed under the normal corporate income tax framework.

For retailers and larger businesses, this proposed measure may be particularly relevant where profit margins increased materially in 2026. However, it is a separate corporate tax measure and should not be treated as a VAT change.

Changes for lump-sum taxpayers and tourist accommodation

The package also includes changes for businesses operating under lump-sum taxation arrangements.

The Government stated that around 83% of lump-sum businesses with annual receipts of up to EUR 40,000 would not face an increase in their tax burden.

At the same time, higher tax brackets are expected to become more progressive, with the Government presenting this as a way to reduce differences in tax treatment between lump-sum businesses and employees.

Another proposed change concerns short-term tourist accommodation.

The lower limit of the lump-sum tax applicable to tourist accommodation in the most developed tourist areas would increase. The stated objective is to bring the tax treatment of short-term rentals closer to the taxation of long-term rentals and encourage more long-term accommodation.

What does this mean for VAT and fiscalization?

For VAT and fiscalization monitoring, the 22 September announcement should be treated as an important legislative-development signal, but not yet as a detailed VAT change.

The Government has clearly confirmed that amendments to the VAT Act are moving through Parliament as part of the tax package. However, the announcement itself does not contain enough information to conclude that VAT rates, invoicing obligations, e-invoicing requirements, Fiscalization 2.0 rules or POS requirements are changing.

Retailers, POS providers and tax technology companies should therefore avoid implementing system changes based only on this announcement.

The more relevant next step is to review the actual VAT amendment text and accompanying explanatory documentation once available. That documentation should confirm whether the changes affect:

• VAT rates or exemptions;
• VAT registration or thresholds;
• invoicing requirements;
• e-invoicing;
• VAT reporting;
• Fiscalization 2.0;
• retail receipt requirements; or
• other system or compliance processes.

What should impacted businesses do?

Businesses should monitor the parliamentary process and review the actual VAT Act amendment proposal before making compliance or system changes.

For retailers and POS providers, the current Government announcement alone does not confirm any new POS, fiscal receipt, e-invoicing or VAT-rate requirement. The key action is therefore to track the detailed VAT provisions once published and assess whether they create changes for Fiscalization 2.0, invoicing, reporting or retail-system configuration.

The official Croatian Government announcement confirming that the VAT Act is included in the tax reform package was published on 22 September 2026 and can be accessed here. Source

The Government news page also confirms the publication date and that the package was presented to the Croatian Parliament.

Filip Kalaba, Junior Legal Consultant at Fiscal Solutions