The Tax Administration is expected to provide a credible interpretation of the VAT Law under which a rate of 10 percent will also apply to services outside of hospitality establishments, if the caterer generates the majority of their income on-site, as learned from the Ministry of Entrepreneurship and Crafts.
The Ministry requested a credible interpretation to clarify who should pay VAT at a rate of 25 percent and who at a rate of 10 percent, after the VAT rate for caterers was reduced at the beginning of the year.
Namely, the VAT Regulation, which came into effect on January 1, elaborates on the implementation of the reduction of the VAT rate from 25 to 10 percent for food preparation services and catering services in hospitality establishments, as well as the preparation and serving of non-alcoholic beverages, wine, and beer in these establishments in accordance with the Hospitality Activity Act.
However, food delivery from a hospitality establishment or food orders for consumption outside of the hospitality establishment are not considered included in these services, and the VAT rate for delivery and pickup of food remains at 25 percent, recently warned the Croatian Chamber of Trades and Crafts (HOK).
These services pertain to catering establishments, simple service establishments, pastry shops, pizzerias, and other hospitality establishments that offer food that is picked up on-site or delivered to the customer.
