Croatia has officially confirmed the introduction of mandatory business-to-business (B2B) electronic invoicing beginning 1 January 2026, as part of its sweeping Fiscalization 2.0 reform project. With the Fiscalization Act now passed and published, the initiative is shifting from planning to implementation, bringing significant changes to how domestic transactions are documented, processed, and reported.
This marks a major digital transformation for Croatian tax infrastructure, aiming to reduce fraud, boost transparency, and align the country with wider EU VAT digitisation efforts. But what exactly is changing and what should businesses operating in Croatia expect?
Here’s everything you need to know, including new legislative updates, system requirements, and next steps to stay compliant.
Launched in 2023, Fiscalization 2.0 is Croatia’s second-generation digital tax reform project. The goal? To modernise tax reporting across all business segments B2B, B2G, and B2C through digital-first processes, including mandatory e-invoicing, real-time data sharing, and automated VAT compliance.
At the core of this project is the transition from paper to structured electronic invoices, backed by fiscalisation and connected directly to the Croatian Tax Authority. This shift is designed to improve accuracy, reduce administrative burden, and give the government the tools it needs to combat VAT fraud in real-time.
Following the recent adoption of the new Fiscalization Act, the government has laid out a clear implementation timeline:
Cross-border transactions are exempt from the e-invoicing mandate and may continue using paper or PDF formats.
From January 2026, all VAT-registered Croatian businesses will be required to issue, receive, and fiscalise electronic invoices for domestic B2B transactions using the e-invoicing standard EN 16931-1:2017. Paper invoices will only be permitted in exceptional cases.
Each invoice must be:
To support SMEs and reduce the cost burden, a free application (“FiskApplication”) will be made available for small taxpayers to issue, send, and store e-invoices.
Fiscalisation is a core component of Croatia’s system. It refers to the electronic transmission of invoice data to the Tax Authority in real time. This enables authorities to validate each transaction as it happens and cross-reference records between suppliers and customers.
From 2026, fiscalisation will apply to both B2B and B2G e-invoices and will cover:
Additionally, businesses must report transactions where an e-invoice could not be issued and track invoice collection and rejection statuses. The Tax Authority will use this data to prepopulate VAT returns, reducing filing complexity and increasing reporting accuracy.
Croatia’s updated Fiscalization Act introduces several new obligations and system changes:
All domestic B2B e-invoices must be:
The same applies to B2G invoices, maintaining consistency across the public and private sectors.
Buyers who reject an invoice, due to price mismatches or data errors, must notify the Tax Authority. Issuers and recipients will have access to status tracking tools to manage rejections and confirmations.
Croatia plans to introduce automatically pre-filled VAT returns based on e-invoice data. These returns will reflect:
This move significantly reduces manual data entry, improving compliance and reducing filing errors.
The Croatian government has requested a derogation from the European Commission to adopt a pre-clearance model, similar to Italy’s SDI system. If granted, this would require the Tax Authority to approve invoices before they are delivered to customers.
However, if the derogation is not approved, Croatia will be required to implement a model that complies with ViDA (VAT in the Digital Age) proposals, likely using post-audit or real-time reporting mechanisms.
At this time, the final decision depends on EU approval, but the system design will need to accommodate either scenario.
Mandatory e-invoicing applies only to domestic B2B transactions. For cross-border transactions:
Additionally, the Croatian Tax Authority is expected to issue further guidance on determining whether a foreign business has a permanent establishment in Croatia and is subject to the mandate.
Although e-invoicing is not mandatory for B2C transactions, the fiscalisation obligation is expanding:
Failure to comply with Croatia’s invoicing rules may result in significant financial penalties. Current fines include:
These penalties are expected to be revised and extended to cover new B2B obligations.
With less than six months until the Fiscalization Act takes effect (September 2025) and just over a year until mandatory B2B e-invoicing begins, Croatian businesses and foreign entities trading in Croatia, should begin preparing now.
Immediate next steps:
Croatia’s e-invoicing reform marks a fundamental shift in how domestic transactions are handled, recorded, and reported. With mandatory B2B e-invoicing confirmed and the infrastructure in place, the onus is now on businesses to act.
Those who prepare early will benefit from automated reporting, cleaner audit trails, and more efficient VAT compliance. Those who wait risk disruption, penalties, or missed deadlines.
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