The Croatian Ministry of Finance proposed changes to Croatian VAT rules to partially implement the EU’s ViDA Directive. If adopted, the changes would generally take effect on January 1, 2027, although some measures would take effect later.

Key Proposed Changes to VAT Law

One of the main proposed changes refers to the introduction of technical improvements to Croatia’s existing OSS and IOSS VAT rules, making it easier for businesses to report and pay VAT on cross-border B2C services and distance sales within the EU.

The legislation would prepare Croatia's system for the new OSS reporting mechanism for transfers of a business’s own goods between EU countries, which is scheduled to replace the current reporting through the recapitulative statement from July 1, 2028. It would also clarify when online platforms are treated as the supplier for goods sold by non-EU sellers to customers who are not liable for VAT on intra-EU acquisitions.

Additionally, the proposed changes will impact VAT refunds for businesses using OSS and IOSS. Also, with new rules in place, Croatia seeks to precisely define the EUR 10,000 threshold for intra-EU distance sales, specifying that the threshold covers only distance sales made from the EU country where the taxable person is established.

Furthermore, the OSS regime would be expanded to cover all B2C services supplied in the EU by non-EU service providers. At the same time, businesses applying the special VAT scheme for small businesses would be prevented from using the IOSS.

Conclusion

The public consultation on the proposed VAT amendments will remain open until August 30, 2026. During this period, businesses and other interested stakeholders can submit comments and provide feedback on the proposed measures before the legislation is finalized. Croatia is one of the latest countries to have released proposed changes to the national VAT law to transpose the ViDA rules and requirements.