Facing increasing uncertainty in global energy markets, the Croatian government is preparing amendments to its tax framework that would enable temporary adjustments to value-added tax (VAT) on petroleum products during periods of crisis. The proposal introduces a flexible tax mechanism designed to be activated only under exceptional circumstances.
Authorities state that the initiative aims to provide policymakers with a faster and more targeted response tool when sudden disruptions—such as geopolitical conflicts—drive up energy prices. The move comes amid ongoing volatility linked to tensions in the Middle East, which have placed additional pressure on fuel costs.
According to Finance Minister Tomislav Ćorić, the current legal framework does not offer sufficient flexibility for rapid intervention. The planned amendments would therefore establish a system allowing the government to respond immediately when economic stability is threatened by external shocks.
At present, fuel in Croatia is subject to a 25% VAT rate. Under the proposed changes, authorities would be able to temporarily reduce this rate by up to 10 percentage points, providing relief to households and businesses during periods of sharp price increases.
Officials emphasize that the mechanism would be used only in clearly defined emergency situations and on a temporary basis, with the aim of stabilizing the market without making permanent changes to the overall tax structure.
