Two of the most significant 2018 business updates in Croatia relate to local VAT requirements, and new laws to curb money laundering and terrorism financing.
Here's a short overview of the changes and the next steps for legal entities incorporated in Croatia to be compliant.
Registry of VAT taxpayers
The threshold for entrance into, or exit from, Croatia's VAT taxpayer registry changed on 1 January 2018. It's now 300.000,00 HRK, up from 230,000,000 and a special tax treatment for 'small taxpayers' has been defined. Businesses that reach the VAT threshold are obligated to enter the VAT taxpayer registry.
Possible new VAT deduction
A VAT deduction is now possible for the purchase or lease of personal vehicles and other means of personal transportation; including the purchase of all goods and services in connection with those goods.
A VAT deduction can potentially be applied when importing certain machines and equipment into Croatia, amounting to over HRK 1,000,000.00.
New law on anti-money laundering and terrorism financing
In line with global efforts to increase financial and business transparency, Croatia's financial agency will require entities to disclose information about their ultimate beneficial owners (UBOs). It will establish a UBO register no later than July 2018.
All entities incorporated in Croatia are required to create a risk analysis to recognise, assess, understand and reduce the risks of their operations being linked to money laundering and terrorist financing. If not already clearly visible in the court register, entities must report their UBOs to the financial agency.
Learn how to successfully navigate foreign rules and regulations.
Related reading: UBO register: upcoming local requirements in Europe
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.