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.
Fiscalization 2.0: What’s Driving the Change?
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.
Mandatory B2B E-Invoicing Timeline: What’s Confirmed
Following the recent adoption of the new Fiscalization Act, the government has laid out a clear implementation timeline:
- 1 January 2026 – Mandatory e-invoicing begins for all VAT-registered businesses in Croatia for domestic B2B transactions.
- 1 January 2027 – The obligation extends to non-VAT registered entities and public sector bodies, who must begin issuing electronic invoices for domestic transactions.
- B2C transactions will remain outside the scope of mandatory e-invoicing, but must be fiscalised starting in 2026, regardless of payment method.
Cross-border transactions are exempt from the e-invoicing mandate and may continue using paper or PDF formats.
What Does This Mean for Domestic B2B Transactions?
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:
- Structured in XML format and aligned with European standards (PEPPOL BIS Billing 3.0 is accepted).
- Transmitted in real time to the Croatian Tax Authority for fiscalisation.
- Archived electronically in a compliant format.
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.
How Does Fiscalisation Work?
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:
- Standard invoice data (e.g. tax base, VAT rates, payment terms)
- Supplier and buyer details
- Bank account numbers
- A six-digit product classification code for each good or service (per Croatia’s official CPA)
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.
New Legal and Operational Requirements
Croatia’s updated Fiscalization Act introduces several new obligations and system changes:
1. Mandatory e-Invoicing and Real-Time Reporting
All domestic B2B e-invoices must be:
- Structured electronically (EN 16931-compliant XML)
- Transmitted to the Tax Authority at the time of issuance
- Logged, verified, and timestamped through fiscalisation
The same applies to B2G invoices, maintaining consistency across the public and private sectors.
2. Invoice Rejections and Data Synchronisation
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.
3. Prepopulated VAT Returns
Croatia plans to introduce automatically pre-filled VAT returns based on e-invoice data. These returns will reflect:
- Whether the invoice has been paid
- Any rejected or corrected invoices
- Updated financial totals and VAT obligations
This move significantly reduces manual data entry, improving compliance and reducing filing errors.
4. Free vs. Commercial Solutions
- Small taxpayers may use the free government portal for basic e-invoicing and archiving.
- Larger businesses or those with complex ERP systems will need to procure e-invoicing solutions from licensed providers (known as information intermediaries).
Will Croatia Use a Pre-Clearance Model?
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.
Cross-Border Transactions and Foreign Entities
Mandatory e-invoicing applies only to domestic B2B transactions. For cross-border transactions:
- E-invoicing will remain voluntary
- Paper or PDF formats are still accepted
- Foreign suppliers without a fixed establishment in Croatia are not required to comply, unless they’re registered as Croatian VAT payers
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.
B2C: Paper Invoices Still Allowed, But Fiscalisation Required
Although e-invoicing is not mandatory for B2C transactions, the fiscalisation obligation is expanding:
- From 1 January 2026, all B2C invoices, regardless of whether paid by cash, card, or bank transfer, must be fiscalised.
- This closes the current gap where only cash and card payments were included.
Penalties for Non-Compliance
Failure to comply with Croatia’s invoicing rules may result in significant financial penalties. Current fines include:
- EUR 260 to EUR 66,360 for failure to issue or late issuance of invoices
- EUR 270 to EUR 66,700 for incorrect VAT reporting
- Up to EUR 500,000 for fiscalisation-related offences
- Fines for non-notification of foreign invoice storage or other administrative errors
These penalties are expected to be revised and extended to cover new B2B obligations.
What Businesses Should Do Now
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:
- Review internal invoicing systems for EN 16931 compliance
- Consult with your software provider to enable fiscalisation and real-time reporting
- Test integration with the eRačun platform, or plan to adopt the state-provided FiskApplication if you qualify
- Understand your buyer/supplier classification codes for product-level invoice data
- Monitor regulatory updates, especially concerning the EU derogation and pre-clearance model
Final Thoughts
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.
