Tax Administration Confirms 25% Tax on Parcels from Third Countries in 2021

Lauren Simmonds

The tax administration isn’t exactly the most popular institution in Croatia, and it will likely become even less popular for those who are fans of ordering cheap goods from China, as a 25 percent tax is about to be slapped on each parcel entering the Republic of Croatia.

As Poslovni Dnevnik writes on the 29th of August, 2020, as of next summer, more precisely from the 1st of July 2021, every single shipment ordered from third countries – including the production giant China, will have have a 25 percent value added tax paid on it.

As things currently stand here in Croatia, small shipments worth less than 22 euros are exempt from the payment of any VAT, but in less than a year such shipments will require the payment of both VAT and customs duties, so will small, ie cheaper packages ordered from the likes of China, marking an increase in price by 25 percent.

The increase in the price of shipments from third countries has been talked about for some time now, and yesterday the Ministry of Finance and the Tax Administration officially confirmed this to the journalists of Bug who sent them an inquiry on the matter.

Among other things, the reply from the Tax Administration states: Alignment with these directives will take effect from the 1st of July 2021, with the aim of simplifying certain rules regarding the supply of services and the distance selling of goods and ensuring a level playing field for European Union taxpayers in relation to taxpayers from third countries, given the fact that the VAT exemption for small consignments imported into the European Union with a value of less than 22 euros is abolished.

From next summer onward, we will pay 25 percent VAT on packages sent from China and third countries worth less than 22 euros (160 kuna), which will be charged directly to the seller of the imported goods.

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