Croatia Proposes Extension of Reduced VAT on Energy Products

Croatia’s Ministry of Finance presented a proposal Monday to extend the reduced value-added tax on energy products until March 31, 2027.

The ministry estimated maintaining a 5% VAT rate on deliveries of natural gas, heating, and solid fuels, such as firewood and wood chips, for another year would cost €47 million ($55.5 million) in annual tax revenue.

But an extension would ensure stable prices and prevent a negative impact on the economy and citizens, the ministry said in a press release.

• Without the extension, the VAT rate would increase to 13% from April 1, 2026.
• The proposal, which ...