The supply of services by a non-resident is subject to VAT in Croatia.
When a non-resident has an establishment in Croatia, the establishment must register for and pay VAT when the registration threshold is met.
When a non-resident has no establishment in Croatia but supplies certain services therein, he is required to register for VAT regardless of meeting the standard registration threshold, unless the supplies are subject to reverse charge.
If the supplier is resident in another EU country, they may register directly or appoint a tax representative. If the supplier is resident in a non-EU country, they must appoint a tax representative that has an establishment or permanent address in Croatia.
In general, if the customer is a taxable person, they are required to withhold the VAT payable on the supply and make payment on behalf of the supplier. Individual consumers are generally not considered taxable persons. Certain services are not subject to reverse charge when supplied to a taxable person, including:
- Transport Services
- Restaurant and catering services
- Cultural, artistic, scientific, educational, sporting, entertainment or similar services
- Short-term rentals of vehicles
Effective 1 January 2019, non-resident taxpayers that are registered for VAT in Croatia are not eligible to apply the reverse charge mechanism to their local supplies and are required to charge VAT. Hence, the reverse charge mechanism applied only to non-residents, not registered for VAT purposes in Croatia.