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Croatia: Extension of reduced VAT rate on fuels; amendments to corporate income tax procedural rules

Recent tax developments in Croatia

June 15, 2026

The government in March 2026 extended the application of the reduced 5% VAT rate for natural gas, district heating, firewood, pellets, briquettes, and wood chips for an additional year, from April 1, 2026, to March 31, 2027.

The government in April 2026 also released for public consultation draft amendments of the VAT Act for public consultation that would grant the government under a new provision (article 38a) the authority to adjust, through a government decree, the applicable VAT rate for excisable energy products.

In addition, the government in April 2026 passed amendments to the Corporate Income Tax Ordinance to refine implementation rules, including reporting, documentation, and procedural requirements for corporate taxpayers. The changes remain subject to stakeholder comments before final adoption.


For more information, contact a KPMG tax professional in Croatia:

Bojan Đukić | bdukic@kpmg.com

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