Postponement of VAT payment

14.4.2020.

Please see below news regarding tax incentives, amongst others, assessment and postponement of VAT liability payment during the COVID-19 epidemic:

Postponement of VAT liability due for payment

  • Taxpayers who pay VAT based on the “issued invoices” principle and satisfy conditions for payment postponement of taxes and contributions (i.e. taxpayers who are closed or have fall in turnover) can postpone their payment deadline of VAT liability (irrespective of the turnover realised in previous year).
  • The difference in amount of  VAT liability calculated based on the “issued invoices” principle and the VAT liability that would be calculated based on the “collected receivables” principle can be postponed. 
  • Payment postponement of VAT liability is applicable for March 2020 (due in April 2020) and April 2020 (due in May 2020).
  • Tax Authorities will not charge penalty interest during this postponement period.
  • Taxpayers who have already filed a request for payment postponement of taxes and contributions do not have to file a new request. They can automatically postpone payment of VAT liability.
  • Taxpayers who do not fulfil prescribed criteria for payment postponement of VAT  liability or do not wish to assess the VAT liability based on the “collected receivables” principle, can continue to assess their VAT lability as per standard practice, i.e. based on the issued invoices principle.

Import VAT

  • All imported goods required to fight COVID-19 disease (e.g. protection equipment, medical equipment and similar) are exempt from customs duties and VAT until June 20, 2020.
  • The VAT on import of such goods will be reported based on the reverse-charge mechanism, i.e. input/output VAT will be included and netted off in the same VAT return.

VAT on donations

  • Also exempt from VAT until June 20, 2020 are free of charge supplies of goods and services, i.e. donations given to fight COVID-19 disease.

Payment postponement of taxes and contributions for 24 months

  • Those taxpayers who do not qualify for payment postponement of taxes and contributions have an option to sign an Administrative contract with the Tax Authorities and postpone payments of their tax and contribution liabilities due for payment.
  • The payments can be postponed for a period of 24 months maximum.  During this period interest will be calculated at the lower interest rate of 3.11% p.a.

Crowe Croatia services to our clients remain ongoing, and we will continue to inform regarding further developments.