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How to pay tax on EU services? PDV and PDV-S form, VAT ID, access to e-Tax…

You probably ended up on this page because you used the services of companies outside of Croatia and you are required to pay VAT on their services as well as submit PDV and/or PDV-S forms, but you do not know how.

I believe most of you are here because you used platforms like booking.com, Airbnb, Expedia, but this list doesn’t end here. If you have used any services outside of HR, you are required to pay 25% of that amount into the HR budget. This also applies to paid Facebook ads, Google Ads, but also to many other services you potentially use.

 

What do I need?

In this scenario, we will take booking.com and their services as an example, but the process is the same for other services on which you would potentially pay VAT.
First of all, in order to be able to use the services and correctly calculate VAT on such services, we need a VAT ID number.

 

VAT-ID

The VAT identification number or abbreviated VAT ID is used so that Croatian taxpayers can operate on the common market or acquire goods and receive or perform services within the European Union. The VAT ID is assigned by the tax administration and is exchanged with other countries via the VIES system.

It consists of the format HR [YOUR-OIB] eg HR66859988123.
Although this way you know what your VAT ID will be, it is not activated until you apply for it.

The VAT ID number can be requested in the following 3 ways:

  • in person at the tax officer at the competent tax office
  • via the e-Tax system with a security level credential 3
  • by registered mail with an indication on the shipment “For the assignment of VAT ID number”

If you want to go to the tax office in person and apply, you can download the form here, fill it out and submit it to the tax office. The VAT ID application form itself is called the P-PDV form.

 

FINA, E-Citizen and E-Tax

You can submit the PDV and PDV-S form in a couple of ways. The first way is to go to FINA with completed PDV and PDV-S forms (further in the text we explain where to download them and how to fill them out). FINA charges for these services. Here you have their price list, but submitting a PDV and PDV-S form costs you 60.00 + VAT for each month you used these services.
You will often have to fill in the PDV and PDV-S form in FINA yourself, and they will just submit them.

The good news is that you can very easily fill out the forms and submit them yourself via e-tax.

We will assume that you already have e-citizen access. If you don’t have one, e-citizen is a great service that will save you a lot of time, not only in terms of paying taxes but also many other services.

You can apply for access to an e-citizen at FINA.

 

eOI & smart card reader

Once you have access to e-citizen, you also have access to e-tax. Access to and submission of PDV and PDV-S forms requires a minimum 3rd level of security. Your electronic ID card gives you the highest level 4.
When creating an ID card (All ID cards created after June 10, 2013 are Electronic ID cards.) You also received instructions for activating the ID card.

If you have not already done so, find the document you received with your ID card, click on the link, activate your ID card, and download the software to use the certificate. You can download it here.

In order to use a personal certificate, you must also have a smart card reader that you can buy for 100 kn in various Croatian web stores.

Links – Smart card and SIM card reader MANHATTAN

Instar – USB Smart Card Reader

AMD – Smart Card Reader USB Bulk

eID software is available for free download and can be found here. You can find a personal card reader in stores that sell IT equipment (Links, Chipoteka, Elipso, etc …) and the price of the reader is around 100kn.

PDV & PDV-S

Once we have secured access to the E-citizen and E-tax system and obtained a VAT ID number, we can start filling out the PDV and PDV-S form. The first thing we need to do is find the commission we paid to the agency (Booking, Airbnb, etc …) and calculate the VAT we owe. We can find the commission paid to these agencies on the invoices we received from the mentioned agencies. After we prepare all the amounts we will fill in the PDV and PDV-S forms.

 

On it you will see all the bills for your period. Download your bills as much as a button.

 

 

We now have access to the account itself, and the commission amounts for each month. This is the amount on which you are required to pay VAT. VAT is currently 25%. See example below:

 

           

 

25% of 101.43 euros is 25.36 euros. Although the invoices are in euros, since we pay the amounts into the Croatian budget, we have to convert the amount of VAT into kunas, on the date of issuing the invoice at the central exchange rate eur – hrk on that day.

You can access the exchange rate list at this link.

 

 

To find the exchange rate, click on the search, select the date and euro as the currency and you will get the middle exchange rate for that day. In our example, it is 7.552880 on 03.10.2020.

Multiply the amount of 25.36 euros by the exchange rate of 7.552880 and we get the amount of 191.55 kunas. This is the amount we have to pay in our example as VAT.

Click on the search to find the course for a particular day

We do this process separately for each month when we have had turnover from agencies.

When you have finished calculating the tax you need to pay, go to the e-Tax pages and click on the entry, then allow and select the method of registration. In case you have an ID card reader and an activated ID card, select “ID Certificate” or one of the other options that have a security level => 3.

We have to fill in 2 forms (PDV and PDV-S). We will start with the VAT form. When we are logged in, we go to the Forms, then VAT, and fill in the form. Under the header, we put the exact month for which we submit the VAT form.

A separate form is submitted for each month.

We fill in the fields as in this example given to us by the tax office.

The higher amount is the amount of commission, while the smaller amount is VAT, ie 25% of the larger amount. After we have entered the data on the left we click check and then send and we have successfully solved the VAT form.

If you use booking.com, you only need to fill in the field under 2.10. Box 13.10 refers to services you have received outside the EU.

Now we move on to the PDV-S form. We will find it in the menu at the top where we click on the forms, and in the left menu, we select PDV-S. Again under the header, we select the month for which we submit the form.

Under the supplier of the state, we put the state in which the agency is located. We can find this information in the same accounts where the commission is located. Then the VAT identification number (VAT-ID) can also be found on the same invoice.

 

 

 

 

 

 

 

In the value field of received services, add the amount of commission, click on the diskette (Save) and add the same number under the total. Once again we check all the data to see if any error has been underlined and then we send and that’s it.

The PDV-S form as well as the PDV form must be made separately for each month

You can generate payment information by clicking on the profile at the top. Then PKK, so we click on show. Then in the window that popped up, click generate payment information and find: number 1201-value added tax. And when the payment slip pops up, we just enter the amount of tax that we entered in the forms.

At this point, if you are filling out the payment slip yourself, here are the details:

Recipient’s name: Min.financija, Porezna up.
Street and number of recipients: Boškovićeva 5
Postal code and place of recipient: 10000 Zagreb
Purpose of payment: Payment of public benefits
Purpose code: GOVT
IBAN for payment: HR1210010051863000160
Model: HR68
Call number: 1201-YOUR-OIB

This is information that is valid for the year 2020.

Conclusion

We know this is a very long text and it seems complicated at first, but it is very easy to fill out these forms once you have set everything up, and we are at your disposal if you need help. Leave a comment on the article and we will be happy to help you.

To summarize everything,
The first thing you need is to register and issue a VAT ID number. If you don’t have it yet, simply go to the tax office, fill out and submit the P-PDV form.

After this, we address the e-tax approach. If you do not have e-citizen access, jump to FINA and submit a request. With this, you will get access to e-tax.

To submit the form we need a Level 3 approach and a smart card reader.
This is covered by your personal. Register your e-personal on the portal and download the software to use the certificate.

You go to the store and buy a card reader.

You run the software, put in the card, visit the e-tax office and you are ready to submit the forms.

In the meantime, you calculate the commission, VAT on services according to the instructions above, and that’s it.

Once again, I hope everything above is clear, but if you have any questions about the process itself, feel free to contact us or leave comments below so we can answer your questions, but everyone else has access to the answers.

Greeting,
Island of Vir Platform Team 🙂

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