Accommodation services and property letting

If you are an individual or a company providing accommodation services to tourists in Croatia, you will likely need to register for VAT, file monthly VAT returns, and issue invoices. You can also deduct input VAT on supplier invoices related to your accommodation business.

You can avoid VAT registration if you only provide B2B services, as this is reverse-charged to the buyer. For example, if you rent your premises to a tourist agency, the agency handles the VAT. In this case, you can reclaim eligible input VAT (e.g., apartment renovation) through the cross-border VAT refund system, which can be a lengthy process (several months to a year) and scrutinized by the tax administration, especially if you are a non-EU resident.

Most owners must register for income tax purposes regardless of VAT rules. Many choose to register for VAT as well, making it easier to switch to providing accommodation directly to individuals and reclaim VAT by offsetting it with VAT liability in the same month.

The rules are generally the same for individuals or companies letting premises in Croatia. Additionally, you can avoid VAT registration if you let apartments for residential purposes (long-term living)