The VAT taxation system is complex. However, each investor or entrepreneur should be familiar with the tax system of the country in which they do business. Here are some basic info about VAT for LLC Companies in Croatia.
Once an LLC company is established, the company receives its own Croatian VAT Number called OIB. The VAT (Value Added Tax) number is public and listed in the Croatian Company Register, just as a Name of the Company, Registered Company Seat or owners. The VAT number has to be entered in all issued invoices. It is advisable to insert it in the memorandum and stamp which are still required in some business communication in Croatia.
In the case where the annual turnover exceeds 39.816,84 EUR in the previous or current year, a Croatian company must enter the VAT system. A company is free to enter the VAT system at any point, but with the mentioned amount it is obligatory.
The company has the right to ask for a refund, which must be processed and paid for within 30 days of the day the request was made. The deadline for filing monthly VAT returns is by the 20th day of the following month. VAT can also be submitted quarterly in some cases.
When conducting a business with another EU member state, VIES needs to be requested. VIES is a system which enables traders to check the validity of VAT numbers quoted to them. The VIES system applies to intra-EU trade only.
Croatia has four different VAT rates; the general VAT rate in Croatia is 25%, intermediary rate equals to 13% and the reduced ones are 5% and 0% rate.
Intermediary rate of 13% is applicable on Charters, any sort of Accommodation Services, Newspapers and selected foods, water supply (excluding bottled water), Electric Energy Supply, Natural Gas Supply and more.
A reduced rate of 5% is applicable on selected foods, Fertilizers, Medical Equipment and Books.
A reduced rate of 0% is applicable on supply and installation of Solar Panels on private and public buildings (used for activities of public interest).
There are standard rules and regulations for all EU state members, but each country is free to make their own standard VAT rate. The only requirement by EU Law is that the standard rate is above 15% and the reduced rate is above 5%.