Fiscalization 2.0: Key changes and the obligation to introduce e-invoices in business

The Government of the Republic of Croatia has adopted the Proposal for the Fiscalization Act, which introduces significant changes to the fiscalization system and is currently in the parliamentary procedure.

The Act enters into force on 1 September 2025 in the part relating to the fiscalization of invoices in final consumption, while the provisions related to the issuance and fiscalization of e-Invoices will apply from 1 January 2026. Furthermore, from 1 January 2027, the obligation to issue e-Invoices will also be extended to taxpayers outside the VAT system, including taxpayers of income tax, corporate tax, and budgetary and extra-budgetary users.

From 1 September 2025, all parties obliged to exchange eInvoices and information intermediaries will have the opportunity to test the capability of their own systems for the exchange of eInvoices, fiscalization of eInvoices and eReporting in order to be ready for the application of this Act from 1 January 2026. At the same time, the obligation to submit data on business premises via the application form for the fiscalization system is abolished, as is the possibility of specifying a check as a payment method and fiscalization of accompanying documents.

From 1 January 2026, fiscalization will be extended to all entities subject to fiscalization in final consumption, regardless of the method of payment. Also, the obligation of fiscalization will be introduced in activities in which the majority of turnover is related to the retail sale of daily newspapers, tobacco and postal securities.

In the part related to eInvoices, from 1 January 2026, the obligation to issue and receive eInvoices for taxpayers in the VAT system is introduced. The obligation to receive eInvoices is also introduced for companies, craftsmen, freelancers, state administration bodies, local and regional self-government units, as well as budgetary and extra-budgetary users of the state budget and local and regional self-government units that are registered in the Register of budgetary and extra-budgetary users, who are not in the VAT system. The free use of the MICROeINVOICE (cro. MIKROeRAČUN) application will be provided for entrepreneurs outside the VAT system. From 1 January 2027, the obligation to issue eInvoices is also extended to these taxpayers.

Those obliged to issue eInvoices and those obliged to receive eInvoices are also obliged to fiscalize eInvoices. The fiscalization of eInvoices is carried out via a software solution that enables the automatic downloading of the necessary data from eInvoices exchanged in the process of issuing and receiving.

In order to further simplify and digitize the process of fiscalization and reporting, the Tax Administration is planning to introduce an application called FiskApplication (cro. FiskAplikacija). This application will provide taxpayers with centralized management of fiscalization and eReporting. eReporting is a new digital procedure by which data on deliveries, as well as information on the rejection and collection of eInvoices, are submitted to the Fiscalization System. This process allows the Tax Administration to monitor the status of the invoices in real time.

The introduction of the eInvoice fiscalization and eReporting system will enable significant administrative relief. It is planned to abolish or amend a number of existing tax returns and forms, including the report on food donations, the book of outgoing invoices, the record of sales in passenger traffic, reports on the transfer of tax liability, the record of received invoices, the OPZ-STAT form, the PD IPO form for transactions with related parties, as well as statistical forms for small and medium-sized enterprises. Furthermore, it is planned to simplify or abolish the Recapitulative statement (ZP) and VAT-S returns after harmonizing the domestic legislation with the EU Council Directive on VAT rules for the digital age.

In order to implement the above changes, adjustments to several tax regulations have been announced, including the VAT Act, the VAT Ordinance, the Profit Tax Act, the General Tax Act and the corresponding implementing ordinances.

It is particularly important to note that the Tax Administration has called on all taxpayers to align their internal list of goods and services with the Classification of Products by Activities of the Republic of Croatia (KPD) 2025 by the end of 2025.

In order to enable the technical implementation of the Act, the Tax Administration published the technical specifications of eInvoices and eReporting on 25 April 2025. The aforementioned documents form the basis for the development and adaptation of the IT systems of all participants in the exchange of eInvoices.

Given the extensive changes and the impact they will have on all taxpayers, we recommend a timely adaptation of systems, IT procedures and ensuring compliance with the technical and substantive requirements of the new regulations.

For any additional questions or advice on preparing and adapting to upcoming obligations, please feel free to contact us.