In Croatia, the legal framework for electronic invoicing is based on a combination of EU regulations and national legislation. Croatia has implemented the relevant EU directives into its national law and introduced specific provisions for electronic invoicing. The key legal foundations for electronic invoicing in Croatia are:
1. EU VAT Directive (2006/112/EC)
The EU VAT Directive (2006/112/EC) provides the basic legal framework for electronic invoicing in Croatia, as in all other EU member states. The directive allows electronic invoices to be recognized as legally valid, provided certain conditions are met:
- Authenticity of origin: The sender’s identity must be verified.
- Integrity of content: The invoice content must remain unchanged after issuance.
These requirements can be met through electronic signatures, EDI systems (Electronic Data Interchange), or other suitable technologies that ensure authenticity and integrity.
2. Croatian VAT Act (Zakon o porezu na dodanu vrijednost)
The Croatian VAT Act (Zakon o porezu na dodanu vrijednost) regulates electronic invoicing and the conditions electronic invoices must meet to be recognized for tax purposes. This law aligns with EU requirements and allows electronic invoicing under the following conditions:
- Electronic invoices are legally recognized if they meet the same authenticity and integrity standards as paper invoices.
- Electronic invoices must contain the same basic information as paper invoices, including the invoice amount, VAT, invoice number, issuer and recipient details, and a description of the goods or services.
- Section 79 of the Croatian VAT Act stipulates that electronic invoices must be validated through appropriate methods to ensure authenticity and integrity, such as electronic signatures or EDI systems.
3. Regulation on Electronic Invoicing in the Public Sector (Pravilnik o elektroničkom izdavanju računa)
A specific regulation for electronic invoicing in the public sector is the Regulation on Electronic Invoicing (Pravilnik o elektroničkom izdavanju računa), introduced in 2014. This regulation mandates that all companies issuing invoices to the public sector must use electronic invoices.
- The regulation requires companies to send invoices in a structured format (mostly XML or UBL format) to the public sector.
- Peppol (Pan-European Public Procurement Online) is the standard used for exchanging electronic invoices with public institutions. Companies must send their invoices through the PEPPOL network to meet the requirements.
- This regulation aims to improve efficiency and transparency in invoicing to public administration while reducing administrative costs.
4. Peppol and Croatia’s eInvoicing Platform
Croatia has adopted the Peppol infrastructure, which is an EU-wide standard for exchanging electronic invoices between businesses and public administrations:
- Peppol is a network that facilitates the secure and standardized exchange of business documents, including electronic invoices, between businesses and public institutions.
- Croatia’s eInvoicing platform enables the receipt of electronic invoices from companies supplying the public sector. Businesses sending invoices to public institutions in Croatia must use Peppol-compliant electronic invoices.
- This platform automates the validation and archiving of invoices, ensuring compliance with legal requirements.
5. Electronic Signatures and Validation
In Croatia, electronic invoices can be validated through various methods to ensure they meet the requirements for authenticity and integrity. Commonly used methods include:
- Electronic Signatures: Qualified Electronic Signatures (QES) and Advanced Electronic Signatures (AES) can be used to confirm the sender’s identity and ensure the invoice’s integrity. These signatures are legally binding under the EU eIDAS Regulation.
- EDI Systems: Businesses can use EDI systems to automate the exchange of invoices and other business documents, ensuring authenticity and integrity.
6. Archiving Obligations
As in other EU member states, electronic invoices in Croatia must be retained for at least 6 years. This archiving must ensure that the integrity of invoices is preserved throughout the retention period:
- Electronic invoices must be stored in a way that ensures they remain readable and that their authenticity and integrity are not compromised.
- Invoices must be stored unchanged and completely, and the data must be accessible in the event of a tax audit.
7. Other Relevant Regulations
In addition to specific provisions for electronic invoicing in the public sector, there are general regulations concerning the use of electronic invoices in Croatia, which include:
- The Croatian Electronic Communications Act (Zakon o elektroničkim komunikacijama): This law governs the legal framework for electronic communication and electronic signatures.
- The Croatian tax authorities have implemented an online system for verifying electronic invoices to ensure that businesses comply with tax requirements.
Summary of Legal Foundations:
- EU VAT Directive (2006/112/EC): Establishes the basis for recognizing electronic invoices, provided authenticity and integrity are ensured.
- Croatian VAT Act (Zakon o porezu na dodanu vrijednost): Requires electronic invoices to meet the same tax standards as paper invoices.
- Regulation on Electronic Invoicing in the Public Sector: Mandates electronic invoicing in a structured format for transactions with the public sector.
- Peppol Standard: Used for electronic invoicing to the public sector.
- Electronic Signatures: Can be used to ensure authenticity and integrity.
- Archiving Obligation: Electronic invoices must be retained for at least 6 years.
Conclusion:
In Croatia, electronic invoicing is well-established and regulated by both national and European legislation. For businesses working with public administrations, electronic invoicing has been mandatory since 2014. Such invoices must be sent via the Peppol platform in a standardized format, such as XML or UBL. Companies must ensure their electronic invoices comply with requirements for authenticity, integrity, and proper archiving to maintain legal validity.
