On 27 October 2016, the Croatian Ministry of Finance “MinFin” presented a new tax reform amending 15 legislations.
Some of these are new VAT laws due to be implemented from 1 January 2018.
The reform proposes for the reduction of the standard VAT rate and a change of the current reduced VAT rates as follows:
- The standard VAT rate will decrease from 25% to 24%.
- The current reduced VAT rates of 5% and 13% will be removed and a single reduced VAT rate of 12% will be introduced.
In 2013, as Croatia prepared to enter the European Union, MinFin increased Croatia’s standard VAT rate from 23% to 25%.
These new VAT provisions have been published as MinFin seeks to create a long term potential economic growth, have a positive effect on the quality of life in the country and also simplify and stabilise the Croatian tax administration system. These amendments should be effective from 1 January 2018.