E-INVOICING IN CROATIA: TO BE OR NOT TO B2B IN 2026
Croatia has confirmed the introduction of its B2B electronic invoicing mandate on 1 January 2026 through the Fiscalization 2.0 project, which is in its final stages of development.
Croatia B2B E-Invoicing Mandate through the Fiscalization 2.0 Project
Croatia has confirmed a new mandate for business-to-business (B2B) electronic invoicing (e-invoicing) beginning in January 2026. This is part of the larger Fiscalization Project 2.0 to further digitalize their tax systems, initially announced in 2023 and now confirmed to be in its final stages of development. The authorities have applied to the European Commission for derogation to introduce a pre-clearance model for the upcoming project and have not yet announced the technical specifications of the mandatory electronic invoice system while they wait for the outcome of this application for derogation.
Here are the key points regarding the e-invoicing requirements:
Current Electronic Invoicing Requirements in Croatia
E-invoicing in Croatia has been mandatory for all business-to-government (B2G) transactions between business entities and public administration since 1 July 2019. Suppliers must issue invoices in electronic form to public entities, using the central platform “servis eRačun za državu”, which is connected to the Peppol network as well.
Upcoming Mandatory B2B Electronic Invoicing
The Ministry of Finance has announced that, starting 1 January 2026, electronic invoicing will become mandatory for business-to-business transactions between resident taxpayers. This is part of the Fiscalization Project 2.0, aimed at modernizing the tax system and enhancing efficiency in domestic transactions. However, for cross-border transactions, paper (physical or digital/pdf) invoices will still be allowed and e-invoicing will be voluntary. The authorities have argued that the shift to electronic invoicing is expected to enhance efficiency, reduce paperwork, and improve transparency in business transactions.
Regulatory Framework
The Croatian Tax Administration and the Financial Agency (FINA) are key players in managing e-invoicing regulations and platforms. FINA acts as a Peppol Access Point, facilitating electronic invoice transmission via the eRačun platform.
Currently, e-invoices are typically in XML format and must be EN16931 compliant. PEPPOL BIS Billing 3.0 is accepted as it complies with both of these requirements. CII syntax is also acceptable but must be compatible with EN16931. Invoices must include detailed information such as unique identification numbers, tax details, and payment terms. The authorities are yet to clarify if this will also apply for the business-to-business requirements or whether there will be a more specific framework applicable.
Future Developments for Mandatory Electronic Invoicing in Croatia
As part of the announcement of the upcoming project, the Croatian government has sought EU approval to amend VAT directives to accommodate its pre-clearance invoicing system, necessary for the mandatory B2B e-invoicing rollout. Accordingly, the e-invoicing model is yet to be determined as much will depend on the granting or not of the derogation. If no derogation is forthcoming, the Croatian authorities will need to implement a model that is compliant with the ViDA directive and does not require pre-clearance.
What specific changes are included in the Fiscalization Project 2.0
The Fiscal Project 2.0 includes several significant changes aimed at modernizing the tax system and enhancing efficiency in business transactions. Here are the specific changes included in this project:
Key Changes in Fiscalization 2.0 Project
- Mandatory e-Invoicing for B2B Transactions:
As set out above, starting 1 January 2026, electronic invoicing will become mandatory for business-to-business transactions, expanding the existing framework beyond just B2C and B2G segments.
- Unified Legal Framework:
The project aims to establish a unified legal framework for the exchange of e-invoices across all business segments (B2B, B2G, and B2C), replacing the existing Act on Fiscalization in Cash Transactions.
- Free e-Invoicing Application for Small Taxpayers:
A free application, “FiskApplication”, will be provided to small taxpayers to facilitate the issuance of e-invoices, addressing the disproportionate costs these entities might face in implementing integrated, full e-invoicing systems and services.
- Digital Reporting and Simplification:
The project simplifies tax reporting by reducing the number of required forms and pre-filling tax returns, leveraging data from e-invoices to enhance accuracy and compliance.
- Cashless Payment Systems:
Implementation of a cashless payment system via e-invoicing in the B2B segment, promoting digital transactions and reducing paperwork.
- E-Archiving and Online Bookkeeping:
The introduction of integrated e-archiving and advanced online bookkeeping in the VAT system to streamline tax obligations and reduce administrative burdens.
- Enhanced Transparency and Fraud Prevention:
Mandatory B2B e-invoicing will increase transparency and help prevent VAT fraud by enabling real-time data transfer to the Tax Administration.
- Environmental and Social Benefits:
The project supports environmental goals by reducing paper usage and promoting digital business practices aligned with ESG (Environmental, Social, and Governance) objectives.
Penalties Relating to E-Invoicing Mandate Compliance
Penalties for non-compliance with the current B2G e-invoicing system in Croatia can vary based on the specific violation. However, the authorities are likely to modify these penalties and/or introduce new penalties for the incoming B2B requirements. Here are some of the current penalties associated with non-compliance:
Failure to Issue or Late Issuance of E-Invoices:
A penalty between EUR 260 and EUR 66,360 may be imposed on suppliers who fail to issue invoices or do not issue them within the prescribed period. Responsible individuals may also face fines ranging from EUR 140 to EUR 6,700.
Incorrect VAT Returns or Non-Compliance with Invoicing Obligations:
Penalties for incorrect VAT returns or failure to comply with invoicing obligations range from EUR 270 to EUR 66,700. Responsible individuals may face fines from EUR 140 to EUR 6,700.
Fiscalization-Related Misdemeanours:
Penalties for fiscalization-related offenses can range from EUR 3,000 to EUR 500,000.
Notification Requirements:
Failure to notify the tax administration about storing invoices outside Croatia can result in penalties between EUR 130 and EUR 26,540, with responsible individuals facing fines from EUR 60 to EUR 5,300.
These penalties highlight the importance of compliance with e-invoicing regulations in Croatia to avoid significant financial consequences.
Conclusion on Croatian B2B E-Invoicing
The incoming B2B e-invoicing mandate for Croatia is scheduled for 2026 and is being introduced to enhance efficiency, reduce paperwork, and improve transparency in business transactions. The technical specifications have not yet been confirmed and we are not sure whether or not the authorities will leverage the current B2G infrastructure. This will mainly depend on the outcome of the Croatian Ministry of Finance application for derogation to implement a pre-clearance model, outside of the vision of the ViDA directive for e-invoicing in the EU. eezi powered by VAT IT, will certainly stay abreast of the progress of the application for derogation as well as the release of technical specifications from the Croatian authorities to ensure that we have a solution up and running ahead of 1 January 2026. Feel free to contact us if you have any queries or wish to discuss any requirements further!
