Croatia's Ministry of Finance has released draft legislation to align the country's VAT framework with Council Directive (EU) 2025/516, modernising cross-border digital commerce rules. Key changes include phasing out call-off stock arrangements and expanding the One-Stop Shop system. Implementation is scheduled for 1 January 2027.
The Croatian Ministry of Finance has issued draft legislation proposing amendments to the VAT Act to partially implement Council Directive (EU) 2025/516, known as VAT in the Digital Age (ViDA), and align Croatia’s VAT framework with EU requirements. The proposal seeks to modernise VAT rules to reflect the needs of the digital economy.
The draft legislation is open for public consultation until 30 August 2026.
The key proposed changes are:
Implementation of the ViDA Directive (EU) 2025/516
The draft legislation directly proposes to align Croatian VAT law with Council Directive (EU) 2025/516 (issued 11 March 2025), which introduces the VAT in the Digital Age (ViDA) rules. The main focus of these amendments is to modernise and expand the existing One-Stop Shop (OSS) and Import One-Stop Shop (IOSS) systems. The proposed changes are slated to enter into force on 1 January 2027.
Transition to OSS for transfers of own goods (Replacing call-off stock)
The draft bill proposes phasing out the current call-off stock regime and replacing it with a simplified OSS mechanism for transfers of businesses’ own goods across EU Member States. No new call-off stock arrangements could begin after 30 June 2028, while existing arrangements would remain under the current rules until 30 June 2029. From 1 July 2028, new cross-border transfers of own goods would instead be reported through an adapted OSS registration, replacing the current Collective Declaration system.
OSS expansion for non-EU providers and small business IOSS restrictions
The draft bill expands the scope of the OSS to all B2C services supplied within the EU by non-EU service providers. Small businesses operating under the special VAT-exempt scheme will be explicitly prohibited from using the IOSS (Import One-Stop Shop).
Electricity, heating, and cooling supplies
As per the draft bill, the supply of gas through natural gas systems, as well as the supply of electricity, heating, or cooling via distribution networks to non-taxable persons (or entities whose acquisitions are not subject to VAT) by a non-established supplier, is treated as an intra-EU distance sale of goods for OSS purposes. This treatment is temporary and will remain in effect until 30 June 2028.
VAT refund adjustments and the EUR 10,000 threshold
- VAT refunds: The proposal clarifies VAT refund procedures for OSS and IOSS users. Non-EU taxable persons using the OSS scheme must claim input VAT refunds under the 13th Council Directive rather than through Croatia’s standard domestic procedure. It also sets out refund rules for OSS-registered businesses using Croatia as their Member State of identification.
- EUR 10,000 threshold: The draft clarifies that the EUR 10,000 threshold for cross-border B2C distance sales and certain electronic and telecommunications services applies only to supplies originating from the business’s Member State of establishment.
- Deemed opt-out: Businesses can choose whether to apply the EUR 10,000 threshold. However, registering for the OSS scheme automatically constitutes an opt-out, requiring VAT to be charged in the Member State of consumption from the outset.
