Croatia – 5th year into fiscalization
Croatia has entered year five of fiscalization. Former Minister of Finance Mr. Slavko Linic, who was a great advocate of the fiscalization process in Croatia, confirmed on TV news last month that fiscalization was one of the most successful projects of the history of Croatian tax administration. Despite the strong resistance from certain groups of taxpayers, the project succeeded. This fiscalization, now known as the “Croatian model”, originally adopted from Latin experience of e-invoicing (NFC-e), has served the tax administrations of Slovenia and the Czech Republic to develop their fiscalization processes.
The lack of Internet opens a small window for those who intend to cheat, as during this offline period receipts are allowed to be signed with certificate file only and may not be uploaded to the Tax Authority at all, or modified, even double tills are discovered by investigators. Strong enforcement mechanisms and well trained personnel are required to combat these frauds.
The basic requirement of the model is to register each invoice. Invoice must be certified by the Tax Administration with Unique invoice ID (JIR) before it is printed and delivered to the customer. The fiscalization process starts for every taxpayer by acquiring a digital certificate from national PKI provider (FINA). Digital certificate is used to identify the subject to fiscalization during electronic data exchange and for electronic signing of invoices.
Some figures related to the previous period are impressive. Over 11 billion fiscal invoices have been issued in Croatia since the start in 2013. Tax Administration servers through which all invoices were signed didn’t fail even once. An average of 6.4 million invoices is issued per day, mostly on Fridays, during the summer, the day before Christmas, and more recently for Valentine’s Day. The number of invoices issued is increasing year by year, so in 2017 more invoices were issued than in 2016.
This year, a digital certificate purchased with a validity period of 5 years, must be replaced with a new one. All taxpayers shall be regularly reminded by FINA that the certificate must be updated in time. Invoices cannot be issued without a digital certificate. Is FINA the only authorized CA to sell digital certificates in EU? That’s the question other certificate authorities are asking, since the first sale of the digital certificates started before Croatia joined EU, are they breaching the open market policies for other EU CAs. The price of a single certificate file is aprox 40 Euro.