• If the person selling the land (whether it's construction, agricultural, or any other type of land) is not registered as a VAT obligor, then VAT is not applied to this delivery. Instead, the buyer pays real estate transfer tax.
  • VAT is applied to the delivery of a new building or part of a building that has never been inhabited or used, including the land on which it is located. "New" in this context means that the delivery occurs before more than two years have passed since the first habitation or use.
  • VAT also applies to the delivery of construction land by a person registered as a VAT obligor, at a rate of 25%.

Building Delivery and Reconstruction

  • If a VAT obligor sells a building (either new or used within two years of the first use) and the corresponding land, VAT must be calculated on the invoice.
  • Reconstruction costs that exceed 50% of the sales price of the building (or its part) and the land on which it is located, within two years before delivery, are also subject to VAT.
  • The delivery of an unfinished building (shell and core) is subject to VAT.

Delivery of Agricultural and Forest Land

  • The delivery of agricultural and forest land is exempt from VAT. However, the buyer pays a real estate transfer tax at a rate of 3%.

Reporting Obligation

  • There are reporting obligations for acquirers and suppliers of real estate, depending on whether the transactions are subject to VAT or real estate transfer tax. VAT obligors must submit the appropriate forms, including the Real Estate Transaction Report and, if necessary, the PPO form along with the VAT return.

Understanding these rules helps navigate the tax system when buying, selling, or delivering real estate in Croatia, ensuring proper taxation and avoiding possible penalties for non-compliance with tax regulations.