Croatia prepares for B2B electronic invoicing: Fiscalization Project 2.0

The Fiscalization Project 2.0 marks the beginning of tax modernization in Croatia. The objective is to plan the transition towards electronic invoicing between companies, electronic archiving, and accounting.

The Croatian government foresees that mandatory B2B electronic invoicing and electronic accounting will come into force in January 2026. The obligation will cover national transactions between resident taxpayers. It will be possible to issue paper invoices for cross-border transactions.

To achieve this, Croatia has requested the European Union to derogate Articles 218 and 232 of the 2006 VAT Directive.

The FINA agency is responsible for managing the transmission of electronic invoices in the country through the national platform eRačun. Direct connection to the platform is made through Peppol. FINA is a Peppol Access Point capable of communicating with any other Peppol access point, such as EDICOM's.

Currently, B2B electronic invoicing can be used voluntarily through this platform. It is worth noting that electronic invoicing with the public administration has been mandatory in Croatia since 2019.

Fiscalization Project 2.0

In January 2023, the Croatian Ministry of Finance published the Fiscal Project 2.0 with three objectives:

• Establish a framework for mandatory B2B electronic invoicing.
• Create a system for digital account auditing.
• Implement an advanced system of electronic accounting.

The project is expected to conclude in December 2024. Companies in Croatia will have to adapt their current invoicing and reporting processes to comply with the new requirements.

Fiscal Project 2.0 aims to implement a cashless payment system through e-Invoicing with an integrated electronic file and an active, unique, and advanced online accounting system within the VAT system in order to ensure a range of benefits for all stakeholders and business entities:

• Simplified tax declarations
• Reduction in the number of required forms (tax accounting), accuracy of tax obligations, and largely prior compliance with data from the eRačun platform
• Transparent business and the ability to know payment conditions and compliance with them
• Understanding of the current operations of an individual taxpayer
• Current credit checks
• Contribution to environmental protection using a digital accounting file instead of paper.
• Reducing the number of invoice copies and archiving them through intermediaries.
• The ability to attach files to the invoice and alleviate paperwork burden
• Improving interoperability among parties involved in the invoicing process
• The ability to track and link accounts and prevent VAT refund-related tax fraud
• Business entities receive support for more efficient and competitive operations in the national and global context.