Croatia Tax Agency Clarifies Application of Reduced VAT for Natural Gas Supply, Distribution Services

The Croatian Tax Administration May 17 clarified the application of the 5 percent reduced VAT rate for natural gas supply and distribution services. The clarification includes: 1) the reduced 5 percent VAT rate that applies to taxpayers that supply natural gas and charge fees for the transportation and distribution of natural gas; 2) that the reduced rate is effective from April 1, 2022, to March 31, 2023; 3) that the reduced rate applies when parts of a transaction are so closely linked their separation would be artificial for tax purposes; and 4) that taxpayers that don’t supply natural gas, but ...