How VAT (PDV) Works in Croatia (2026): 25% Standard, 13% and 5% Reduced Rates Explained
Croatia applies PDV (Porez na dodanu vrijednost -- Value Added Tax) at three rates in 2026: a standard rate of 25%, a reduced rate of 13% covering accommodation, hospitality services, newspapers, electricity and natural gas distribution, and a second reduced rate of 5% covering food essentials, books, medicines, baby food and cinema and concert tickets. A temporary 5% rate on natural gas, district heating and firewood runs through 31 March 2027. Businesses must register for PDV when taxable annual turnover exceeds EUR 60,000. Verify with Porezna uprava -- the Croatian Tax Administration.
The three PDV rates: 25% standard, 13% reduced and 5% second reduced
Croatia applies PDV (Porez na dodanu vrijednost -- Croatian for Value Added Tax) at three rates in 2026: Standard rate (25%): the default rate applying to all supplies of goods and services unless a specific reduced rate or exemption applies. It covers most professional services, consumer electronics, clothing, alcohol, tobacco and other goods not specifically listed under a reduced rate. Reduced rate (13%): applies to a defined list including hotel and tourist accommodation, restaurant and catering services (hospitality), newspapers and periodicals, electricity supply, natural gas distribution and district heating services. Second reduced rate (5%): applies to a narrower list of essentials: bread, milk, books (printed and electronic), medicines (pharmaceutical products), baby food, fresh meat, fresh fish, fresh fruit, fresh vegetables, and tickets for cinema screenings and live concert performances. PDV-exempt supplies also exist -- including most healthcare services, educational services, financial services and residential property rental. Providers of exempt services generally cannot recover input PDV on related costs. Always confirm the applicable PDV rate for any specific supply with Porezna uprava -- the Croatian Tax Administration -- as the classification of some goods and services can be subject to interpretation.
Goods and services at the 13% reduced PDV rate
The 13% reduced PDV rate applies to the following principal categories in Croatia in 2026: Accommodation: hotel rooms, apartments, bed-and-breakfast services, camping sites and other tourist accommodation. Hospitality and restaurants: restaurant meals, catering services, and food and non-alcoholic beverages supplied in hospitality settings. Newspapers and periodicals: printed newspapers and magazines. Confirm whether digital editions fall under this rate with Porezna uprava. Energy: electricity supply to end consumers, natural gas distribution for domestic use, and district heating services. Temporary exception: a government measure reduces the PDV rate on natural gas supply, district heating and firewood to 5% (the second reduced rate) through 31 March 2027. After that date, the rate on these products is expected to revert to 13% unless the measure is extended. Always confirm the current status of this temporary measure with Porezna uprava before applying either rate to energy supplies. For each supply, the applicable rate depends on the precise nature of the good or service and its classification under Croatian PDV law. When in doubt, seek confirmation from Porezna uprava or a qualified PDV adviser before issuing invoices at the 13% rate.
Goods and services at the 5% second reduced PDV rate
The 5% second reduced PDV rate applies in Croatia in 2026 to: Food essentials: bread and bread products, milk (including long-life milk), fresh or chilled meat (beef, pork, poultry and other), fresh or chilled fish, fresh or chilled fruit, fresh or chilled vegetables. Health: medicines and pharmaceutical products approved and distributed through the Croatian healthcare system. Children: baby food and infant formula. Knowledge and culture: printed and electronic books, educational materials, and tickets for cinema screenings and live concert performances. Temporary 5% rate: natural gas supply, district heating and firewood are subject to the temporary 5% rate through 31 March 2027. Unless the measure is extended, the rate on these products reverts to 13% after that date. Verify the current status with Porezna uprava before applying the 5% rate to energy products. The 5% rate list is defined precisely in Croatian PDV law. The boundary between product categories -- for example, processed versus fresh food -- can be complex. Always confirm the rate for a specific product with Porezna uprava or a qualified Croatian PDV adviser before charging the 5% rate on invoices.
PDV registration: the EUR 60,000 threshold, filing and how PDV works in practice
PDV is a multi-stage consumption tax collected at each stage of the supply chain. As a PDV-registered business: Output PDV is the PDV charged on sales. It is not income -- you collect it on behalf of the state and must remit it to Porezna uprava. Input PDV is the PDV paid on business purchases and costs. Subject to conditions, input PDV can be deducted as a credit against output PDV, provided the purchases are used for PDV-taxable business activities and are supported by valid PDV invoices (racuni). Net PDV due = output PDV minus recoverable input PDV for the reporting period. If input PDV exceeds output PDV (common for businesses with large capital investment or significant exports), Porezna uprava may owe a refund. Registration threshold: businesses must register for PDV when annual taxable turnover exceeds EUR 60,000. Below this threshold, businesses may operate as small taxpayers (mali porezni obveznik) without charging PDV. Voluntary registration below EUR 60,000 is permitted and can be beneficial if significant input PDV is paid on purchases or if business customers are themselves PDV-registered. Filing: registered businesses file periodic PDV returns (PDV obrazac) with Porezna uprava -- monthly for larger taxpayers and quarterly for smaller ones. Returns and payments are generally due by the 20th of the month following the reporting period. Confirm current filing deadlines with Porezna uprava. Failure to register when required can result in Porezna uprava assessing PDV on all turnover from the date registration was due, plus penalties and interest. Verify all registration, filing and payment procedures with Porezna uprava -- the Croatian Tax Administration.
FAQ
What is the standard PDV (VAT) rate in Croatia in 2026?
The standard PDV rate is 25%. This applies to all supplies of goods and services unless a specific reduced rate or exemption is listed. The two reduced rates are 13% (for accommodation, restaurants, newspapers, electricity, natural gas and district heating) and 5% (for food essentials, books, medicines, baby food and cinema and concert tickets). A temporary 5% rate on natural gas, heating and firewood runs through 31 March 2027. Verify rates with Porezna uprava -- the Croatian Tax Administration.
Which goods and services qualify for the 5% PDV rate in Croatia?
The 5% second reduced PDV rate applies to: bread, milk, fresh meat, fresh fish, fresh fruit, fresh vegetables, books (printed and electronic), medicines, baby food, and tickets for cinema screenings and live concerts. A temporary 5% rate also covers natural gas supply, district heating and firewood through 31 March 2027, after which those energy products are expected to revert to 13%. Confirm the precise classification of any specific product with Porezna uprava before applying the 5% rate.
When must a business register for PDV in Croatia?
PDV registration is mandatory when annual taxable turnover exceeds EUR 60,000. Below this threshold, businesses may operate as unregistered small taxpayers without charging PDV. Voluntary registration below EUR 60,000 is allowed and can be beneficial if significant input PDV is incurred on purchases or if business customers are PDV-registered. Self-employed persons who exceed EUR 60,000 annual income also lose access to the pausalni flat-rate regime and must register for PDV simultaneously. Verify current rules with Porezna uprava.
What is the temporary PDV rate on natural gas and district heating in Croatia?
A temporary measure reduces the PDV rate on natural gas supply, district heating and firewood to 5% -- the second reduced rate -- through 31 March 2027. These products would otherwise fall under the 13% reduced rate. Unless the temporary measure is extended by legislation, the rate reverts to 13% after 31 March 2027. Always confirm the current status of this measure with Porezna uprava -- the Croatian Tax Administration -- before applying the 5% rate to energy supplies on invoices.
⚠️ Informational estimate, not tax advice. Payroll software may differ in edge cases. Verify with a professional.