Changes to the value added Tax Act, which will come into force as of July 1st 2021

As we wrote in previous editions of our tax news, new provisions related to the delivery of services and distance sales of goods to individuals from other EU Member States will come into force this year, with effect from 1 July 2021.

Below are the adjustments with the EU Council Directives with regard to provisions in respect of distance sale of goods and the abolishment of the VAT exemption for imports of small value parcels:

  • ‘Mini One Stop Shop’ – MOSS
    – extending the application of the special taxation procedure for telecommunications services, radio and television broadcasting services and electronically performed services to all services provided to persons which are not taxpayers. With effect from 1 July 2021, entrepreneurs providing services to persons that are not taxpayers are not obliged to register for VAT purposes in each Member State in which the place of taxation of those services is situated (i.e. VAT on these services will be reported and collected in the Member State of reporting).
    – The application of MOSS system is extended to the distance sale of goods within the EU to persons which are not taxpayers, and the obligation to issue invoices for these deliveries is abolished.
    – by applying a special procedure when selling goods electronically, and in case when goods are imported from third territories or third countries in parcels with intrinsic value of less than HRK 1,135.00 (EUR 150), the supplier will charge Croatian VAT at the rate applicable for those goods. In the event that the above procedure does not apply, the Croatian Post and other courier services may apply a special taxation procedure for registration and payment of VAT on imports.
  • The distance sales thresholds are replaced with annual threshold of HRK 77,000.00 (EUR 10,000) – VAT on the supplier’s Member State is calculated up to the threshold
  • The VAT exemption on import from third countries into the EU for small parcels with a value of less than HRK 160.00 (EUR 22) is abolished

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