Croatian Government Proposes VAT Reduction on Energy
Zagreb – The Croatian government submitted a proposal to the parliament on Monday seeking temporary amendments to the Value Added Tax (VAT) Act. The proposed changes aim to reduce the current VAT rate on energy products and services. Currently, Croatia levies a 25 percent VAT on energy.
According to government officials, this reduction is intended to align with prevailing rates within the European Union, which currently range from 15 to 25 percent. The government asserts that lowering the VAT to at least 15 percent would provide a significant benefit to consumers and businesses. Prime Minister Andrej Plenković stated at a cabinet meeting on Monday that this adjustment is a necessary response to the ongoing energy crisis and the associated uncertainty.
He emphasized the need for greater flexibility within the Croatian tax system. The proposed amendments are designed to mitigate potential economic impacts stemming from further global market volatility and escalating conflicts. The government anticipates a potential reduction of up to ten percentage points in the VAT rate on energy.
The Croatian government’s proposal focuses on adapting the VAT system to address current challenges. The move comes as a key measure to support households and businesses impacted by rising energy costs. Further details regarding the anticipated financial impact of the VAT changes are still being finalized.
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