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Croatia Proposes Amendments To VAT Rates

by Ulrika Lomas, Tax-News.com, Brussels

12 December 2013


A draft law, drawn up by the Croatian Government in November, proposes multiple amendments to the Croatian Value Added Tax Act to considerably change provisions concerning the nation's concessionary VAT rates.

The draft law would raise the 10 percent reduced rate to 13 percent. Cultural services rendered by libraries, theatres, orchestras and museums will become newly subject to this rate, as will sports and pleasure vessels on certain conditions.

Earlier, immediately before the nation joined the EU, a concessionary rate of 5 percent had been introduced for vessels that were registered and relocated to Croatia before May 31, 2013. The perk was offered in recognition that Croatia's 25 percent VAT rate would have encouraged boat owners to relocate their craft to other member states with lower VAT rates – to incur a lower tax bill to bring them into free circulation in the EU – or to relocate them outside the EU and Croatia altogether.

A final amendment to rates in the draft law impacts newspapers and magazines that contain more than 25,000 words which are published on a daily basis. These media will newly benefit from a 5 percent reduced rate provided that their content does not consist mainly of advertising. Sales of periodicals not published daily are subject to VAT at the higher reduced rate, set to rise to 13 percent.

TAGS: VAT rates | tax | value added tax (VAT) | law | food | Croatia | services | Europe | Tax

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