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VAT Law change for 2015 season: Non –Resident Landlords in Croatia

Non-residents in Croatia who rent rooms, beds, apartments and holiday homes to foreign and domestic tourists are now required to register for VAT purposes and to apply for registration of VAT payers and apply for a VAT identification number prior to renting out any accommodation in Croatia.

Non-resident Landlords are liable to the submission of monthly VAT returns within Croatia, regardless of whether in a particular month rental service was performed or not. Monthly VAT returns shall be filed by the 20th of each month for the previous month and the annual VAT returns (VAT-K form) by the end of February for the previous calendar year.

The summary declaration (form ZP) and the application for the acquisition of goods and services received from other Member States of the European Union (PDV-S) shall be submitted by the 20th of each month for the previous month, provided that the taxpayer supplies goods and services within the European Union or acquisition of goods within the European Union. These applications must be submitted electronically through the e-Tax. To be able to do this, the Non-resident Landlord is advised to give special authorization to an accountant, so the accountant can send all reports. (NB Non-residents must have an OIB number.)

At the moment (May 2015) it seems that EU citizens don't have to use a Tax Agent and that only citizens from non EU countries have to appoint someone. (A Tax agent is a person who is responsible, before the Law, for his Client, in a way that guarantees the payment of taxes. Usually, this is not an accountant.)

Non-resident Landlords cannot apply for lump sum taxation as they are enrolled in the register of VAT payers. Their further obligation in regards to tax payments (Income tax in particular) depends on each decision made for each Non-resident Landlord as decided by the tax office in Zagreb. Of course the first facts that the Zagreb tax office will have to determine are every landlord's residency status (based on a form that will require completing called Declaration on the Status of Non-resident Landlords.) All factual information completed remains the responsibility of the landlord.

Services provided by the accountant:

1) Help filling out the paperwork to register for VAT payments
2) Help filling out the paperwork to prove your residential status
3) Producing all the necessary monthly VAT reports for your rental season and submitting them to the tax office.

The cost for parts one and two is a one off 30 euros but the accountant reserves the right to increase this in complicated circumstances. The cost for the ongoing accountancy service for your summer season will depend on the work involved.


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