Croatia Pursues EU Derogation for Mandatory B2B E-Invoicing
Croatia submitted a request for derogation from EU VAT Directive and introducing a mandate on B2B e-invoicing.
The Croatian Tax Administration has launched the "Fiscalization 2.0" project. This project seeks to modernize the national landscape by implementing e-invoicing, e-archiving, and advanced online bookkeeping in Croatia. An important step towards this goal is Croatia's formal request to the European Commission for a derogation from Articles 218 and 232 of the 2006 VAT Directive.
If approved, this derogation would enable Croatia to make B2B e-invoicing mandatory across the country, known as "eAccount," and introduce digital reporting for domestic transactions. This move underlines Croatia's commitment to embracing digitalization for more efficient financial processes.
Learn more about what is electronic invoicing and how it works.
The Derogation Request and Scope
Council Directive 2006/112/EC, also known as the VAT Directive, stipulates that the use of electronic invoices depends on the acceptance by the recipient. However, it also grants the Council the authority to authorize member states to introduce special measures that deviate from the provisions of the Directive.
In this context, Croatia has formally submitted a request to the European Commission, seeking approval to mandate the issuance of e-invoices for domestic supplies between taxpayers that are established, resident, or with permanent establishment in Croatia.
The plan is to implement mandatory B2B e-invoicing from January 1, 2026. This timeline provides ample time for businesses to adjust their invoicing procedures and comply with the new rules.
Balancing Costs and Benefits
The Croatian tax authorities explain that this move does not impact the principles of the single market because for transactions performed between Croatian businesses and foreign companies, paper invoices will still be allowed.
Additionally, many Croatian businesses already use e-invoices for public procurement, making the transition smoother. Also, to ensure accessibility of small taxpayers, there is a plan going on to provide a free application, enabling them to receive e-invoices.
In summary, Croatia's pursuit of a derogation for mandatory B2B e-invoicing enhances its commitment to "Fiscalization 2.0" project and a shift towards a more digitalized financial landscape. Find the official announcement here.