Croatia Confirms Mandatory B2B Electronic Invoice Launch for 2026: Fiscalization Project 2.0

Electronic Invoice Mandate in Croatia

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 draft proposal of the Fiscalization Act ("Nacrt prijedloga zakona o fiskalizaciji") establishes the mandatory use of electronic invoicing (eInvoice) and electronic transaction reporting (eReporting) starting from January 1, 2026. From this date, paper invoices will gradually be replaced by electronic invoices, with full implementation scheduled for January 1, 2027.

The draft outlines the obligation to issue and receive electronic invoices (eInvoices) for VAT-registered taxpayers. This requirement will apply to domestic transactions between taxpayers, while paper invoices will still be allowed for cross-border transactions.

Starting January 1, 2026, all VAT-registered taxpayers will be required to issue and receive electronic invoices (eInvoices). Additionally, the obligation to receive eInvoices will apply to:

• Business entities
• Sole traders
• Liberal professions
• The state budget
• Local and regional self-government units
• Budgetary and extra-budgetary users of the state budget and local/regional self-government units, provided they are registered in the Register of Budgetary and Extra-Budgetary Users and are not subject to VAT.

From January 1, 2027, the obligation to issue eInvoices will also extend to the entities mentioned above, even if they are not subject to VAT.

Starting from September 1, 2025, all entities required to exchange electronic invoices will have the opportunity to test their system capabilities to ensure readiness for the implementation of this law on January 1, 2026.

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

It is worth noting that electronic invoicing with the public administration has been mandatory in Croatia since 2019. The FINA agency is responsible for managing the transmission of B2G 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.

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.