The VAT Act contains provisions on VAT chargeability according to which the taxable event and the obligation to calculate VAT incur when the goods have been delivered or the services have been performed. Those provisions relate to all corporate taxpayers which issue an R-1 invoice. However, personal taxpayers may issue an R-2 invoice and their tax liability incurs when the fee for delivered goods or performed services has been charged. This possibility should be abolished as of 1 January 2015 when all entrepreneurs would be obliged to issue R-1 invoices.
This research analysed the possibilities which would allow small entrepreneurs with total annual supply turnover below HRK 3 million to calculate VAT upon charge of fee for supplied goods and services, in accordance with the EU VAT Directive (2006/112/EZ). The proposed measure will have certain effects on the amount and dynamics of collected VAT revenues. For entrepreneurs who currently issue R-1 invoices and would start issuing R-2 invoices as of 1 January 2015, VAT revenues would be put off, according to the time their claims have been charged. Therefore, the research investigated the time shift and financial impact for collecting VAT which would incur in the first months following the proposed amendments.