In Croatia, e-invoicing has made significant progress in recent years, particularly following the implementation of the European Union Directive 2014/55/EU on electronic invoicing in public procurement. This directive required EU member states, including Croatia, to adopt e-invoicing standards for B2G (business-to-government) transactions. Here’s an overview of the e-invoicing situation in Croatia:

Key Points of E-Invoicing in Croatia:

1. Mandatory B2G E-Invoicing:

• As of July 1, 2019, e-invoicing became mandatory for all suppliers in Croatia providing goods and services to public sector entities. This move was in compliance with the EU directive to standardize electronic invoicing for public procurement across the European Union.
• All public sector bodies must accept and process electronic invoices in a structured, EU-compliant format, primarily the European standard EN16931. Suppliers must also issue e-invoices in this format to ensure compliance.

1. Platform for B2G E-Invoicing:

• Croatia has implemented a national e-invoicing platform known as Fina e-Račun, managed by the Croatian Financial Agency (Fina). This platform facilitates the exchange of e-invoices between businesses and public authorities.
• Through this platform, businesses can submit invoices electronically, and public sector entities can receive, process, and archive them digitally, ensuring greater efficiency and transparency in public procurement.

1. B2B E-Invoicing:

• Although not mandatory, the use of e-invoicing in B2B (business-to-business) transactions is gradually gaining traction in Croatia, particularly among larger companies looking to streamline their invoicing processes.
• The Croatian government and the financial sector continue to encourage businesses to adopt e-invoicing voluntarily, recognizing the potential benefits of cost savings, improved efficiency, and reduced processing times.

1. E-Invoicing Formats and Standards:

• Croatia supports the use of PEPPOL (Pan-European Public Procurement Online) for cross-border e-invoicing, allowing Croatian companies to trade electronically with other European companies that use the same framework.
• E-invoices are expected to comply with the European standard and be issued in structured formats such as UBL (Universal Business Language) or CII (Cross Industry Invoice) to ensure compatibility across borders.

1. Benefits of E-Invoicing:

• Efficiency: E-invoicing reduces administrative overhead by eliminating manual handling of invoices, speeding up processing times, and reducing errors.
• Cost Savings: Companies and public authorities benefit from reduced paper use, printing, and postage costs.
• Transparency: E-invoicing improves transparency and traceability in both public and private transactions, helping to combat fraud and tax evasion.
• Environmental Impact: The switch from paper-based to digital invoicing supports Croatia’s broader sustainability goals by reducing paper waste.

1. Challenges:

• SME Adoption: Smaller businesses may face challenges in adopting e-invoicing due to a lack of technical infrastructure, awareness, or resources to implement digital invoicing systems.
• Initial Costs: Although e-invoicing leads to long-term cost savings, the initial setup and integration of e-invoicing solutions can be a barrier for some companies, especially those not familiar with the technology.

Future Outlook:

While e-invoicing is already mandatory for B2G transactions, the Croatian government continues to promote its adoption in the B2B sector, aiming for a broader digital transformation of business processes. The move toward e-invoicing aligns with Croatia’s efforts to improve tax compliance, reduce administrative burdens, and increase transparency in financial transactions. Voluntary adoption among businesses, particularly SMEs, is expected to rise over time as awareness of the benefits grows.

In summary, e-invoicing in Croatia is well-established in the public sector, and its expansion into B2B transactions is expected to continue, contributing to greater efficiency and digitization across the economy.