Fiscalization in Croatia: A guide to the new system

Starting on 1 January 2026, two separate and parallel fiscalization systems will operate in Croatia:

1. Fiscalization 1.0: Applies to fiscalization of invoices in the B2C (end consumer) segment.
2. Fiscalization 2.0: Applies to issuing and fiscalization of electronic invoices between taxable persons (B2B and B2G transactions).

These are two distinct procedures, differing in both data scope and technical implementation, and therefore require different software solutions. Currently, no single system can handle both processes, making day-to-day business more challenging.

• Until 31 December 2025, fiscalization obligations apply only to transactions with end consumers paid in cash or by card.
• From 1 January 2026 – Fiscalization 1.0: All invoices issued to end consumers (B2C) must be fiscalized regardless of payment method, including bank transfers.
• In exceptional cases, fiscalization 1.0 may still be applied, and no electronic invoice is required.

Fiscalization 1.0 is mandatory both now and after 1 January 2026 for:

• Income taxpayers (self-employed individuals) and
• Corporate taxpayers, except for activities explicitly exempt from fiscalization.

Whether an entity is registered for VAT or not has no effect on the obligation to fiscalize B2C invoices.

• Also from 1 January 2026 – start of fiscalization 2.0: Electronic invoices for domestic business-to-business (B2B) and business-to-government (B2G) transactions must be issued, received, and fiscalized.

Fiscalization 2.0 is mandatory both now and after 1 January 2026 for:

• Taxable persons (corporate or income taxpayers) who have their seat or residence in Croatia and who are VAT payers will be required to issue, receive, and fiscalize electronic invoices from 1 January 2026.
• Taxable persons not registered for VAT will be required to receive electronic invoices from 1 January 2026 but will not need to issue and fiscalize electronic invoices until 1 January 2027.

• Non-profit organisations.
• Associations not subject to corporate income tax and not VAT-registered are likely to be exempt even beyond 2027.
• Tour-rental operators in a flat-rate system not in VAT register remain exempt for now. However, they become liable if they register for VAT.

• Electronic invoices must be issued, sent, received and processed in a structured electronic format.
• A new six-digit classification code (KPD code) for goods/services on electronic invoices is being introduced introduced. Misclassification may lead to heavy fines (up to EUR 26,540 for legal persons). 

Existing fiscalization systems for end consumer transactions largely remain the same for those already compliant before 2026. However, the changes broaden the scope to cover more payment types and recipients.

The increased scope of fiscalization aims to enhance transparency, combat the grey economy and modernise tax reporting. Some administrative simplification is expected, as with electronic invoices and fiscalization, some of the older tax returns, reports and record-keeping obligations may be reduced or abolished.

The changes do not impose any new obligations directly on consumers. The burden is entirely on businesses and entrepreneurs.

Businesses should address the following points promptly:

• Review invoicing and accounting systems to ensure they support both Fiscalization 1.0 and 2.0.
• Determine and define how invoices are issued to end consumers (B2C) or other businesses/government agencies (B2B/B2G).
• Verify the VAT codes for all goods and services in the product range to avoid penalties.
• Seek technical and accounting advice early to ensure compliance and avoid disruptions in 2026.

The Ecovis experts advise that small, non-VAT-registered businesses monitor the introduction of the tax administration’s free “MIKROeRačun” application for issuing and receiving e-invoices.