The government proposes extending the 5% VAT rate on energy products until 31 March 2027 to protect households and businesses from price increases that would otherwise take effect in April 2026.
Croatia’s government has presented an amendment to the Value Added Tax (VAT) Act on 27 February 2026, extending the 5% reduced VAT rate on key energy products beyond 31 March 2026. Without this extension, energy prices would rise from 1 April 2026, negatively impacting households and businesses.
The reduced 5% rate applies to natural gas, thermal heating station services (including related fees), and solid fuels such as firewood, pellets, briquettes, and wood chips. The extension will now run until 31 March 2027.
This measure aims to protect citizens’ living standards and support economic stability by maintaining affordable energy prices through continued tax relief.
