Croatia has extended the 5% reduced VAT rate on natural gas, district heating, and wood-based fuels for an additional year until 31 March 2027. The measure, gazetted on 27 March 2026, aims to maintain affordable energy prices and protect living standards, continuing tax relief first introduced in 2022 that was set to expire on 31 March 2026.
Croatia has gazetted the Law on the Amendment of the Value Added Tax Act on 27 March 2026.
This law extends the application of the reduced VAT rate of 5% for natural gas, district heating, firewood, pellets, briquettes, and wood chips for an additional year until 31 March 2027.
The application of the reduced rate was first introduced in 2022 and was previously scheduled to end on 31 March 2026. Originally introduced in 2022, the extension prevents the measure from expiring on 31 March 2026.
The measure seeks to safeguard living standards and promote economic stability by keeping energy prices affordable through ongoing tax relief.
Earlier, Croatia’s government 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.
