Croatia Cracks Down on VAT Fraud in E-Commerce with New Law
Croatia has introduced a new law to tackle VAT fraud in international e-commerce. The legislation, known as Law No. 1614, came into force on January 1, 2024, bringing the country in line with EU standards.
The law requires payment service providers in Croatia to keep electronic records of cross-border transactions every quarter. This applies if a provider processes more than 25 payments to the same recipient within three months. Authorities will use these records to monitor and prevent VAT fraud more effectively.
Additionally, the law updates rules for calculating payment amounts linked to Croatia's adoption of the euro. It also sets clear guidelines for determining where payers and payees are located, ensuring better oversight of transactions. Before this law, no other EU member state had implemented such specific measures for e-commerce payments. Croatia is now the first to enforce these stricter recordkeeping and administrative controls.
The new regulations give Croatian authorities stronger tools to fight VAT fraud in digital trade. Payment providers must now comply with quarterly reporting, while businesses face clearer rules on transaction thresholds. The law marks a significant step in aligning Croatia's financial oversight with broader EU efforts.
