Construction and Other Services Related to Immovable Property
Any service centering around future or existing buildings or other immovable property in Croatia is likely taxed in Croatia. Obvious examples include construction works, however, in practice there is a range of other services connected with immovable property which may trigger Croatian VAT registration obligations.
If you perform construction work and charge services to individuals, you must register for VAT, file monthly VAT returns, and issue invoices under Croatian rules. You can deduct input VAT on supplier invoices related to the project in Croatia.
If you perform only B2B construction and the buyer is registered for VAT purposes in Croatia, you don't need to register for VAT purposes. In this case, you can reclaim eligible input VAT (e.g., subcontractor invoices) through the cross-border VAT refund system, which can be lengthy (several months to a year) and scrutinized by the Tax Authority, especially if you are a non-EU resident. Also, construction firms must register for VAT purposes if they have intra-EU purchases in Croatia.
The same rules may apply (assessed case-by-case) to various construction services and non-construction services related to immovable property, such as consulting, site supervision, staff secondments, property valuations, equipment installation (e.g., elevators), and legal and intermediation services related to property sales.
