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Croatia cuts heating VAT till March 2023

Spiralling inflation prompts cuts on basic foodstuffs, gas and heating

Croatia is the latest country cutting VAT on heating and food as its main inflation rate hits record levels. Its headline inflation rate has hit 12.3%, with heating and other basics being many times higher.

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VAT cuts to fuel until 31 March 2023

The changes, costing Kn 2.1 billion (approx €289m) will be as follows:

  • Heating cut from 25% standard rate to 5% reduced rate
  • Gas temporarily cut to 5%, and then return to 13%

EU grants more VAT rate freedoms for economic crisis

In December 2021, EU finance minister agreed new reduced EU VAT rate setting freedoms which should come into place before April 2022. The European Commission is though open to earlier derogations from the existing VAT Directive restrictions on reduced rates during this temporary energy inflation spike. It has already provided permission to Spain.

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