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Croatia To Delay VAT Rate Cut Until 2020

Friday, August 17, 2018

The Croatian Government has announced that it will delay a planned one-percent value-added tax cut until 2020 but will cut VAT on some basic commodities from the beginning of next year.

The 25 percent VAT rate, which was proposed to be reduced to 24 percent from January 1, 2019, will instead be cut by one percent from January 1, 2020. The 13 percent reduced rate will newly apply to fresh meat, fish, fruit, diapers, and vegetables.

Croatia applies three rates of VAT: 25 percent, the second-highest in the EU after Hungary, a 13 percent reduced rate, and a five percent rate. The 13 percent rate applies to certain printed media, admission to certain cultural shows and events, agricultural inputs, hotel accommodation, some funeral services, electricity supplies, certain waste management services, edible oils and fats, baby food, processed cereal-based foods for infants and children, and food for animals.