From 2023, a major adjustment in the financial sector is imminent, marking the arrival of the euro on the Croatian market. In August, the euro law will regulate the obligation to show prices twice, what is one of the ways to alleviate inflationary pressures. The final decision of the Council of the European Union on Croatia's accession to the euro zone is expected in June and Croatia should replace the kuna with the euro at the beginning of next year, but this summer, prices in shops and restaurants and online stores should be highlighted and written in euros. The government has set January 1, 2023, as the date when Croatia should be ready to join the eurozone, and the announcement of a formal decision is expected in the middle of this year.

A law should be issued soon and it will change 46 laws and more than 70 sub-laws before the introduction of the euro. Following the introduction of the euro, dual circulation will last for two weeks. Dual circulation is the circulation in which the euro and the kuna are used simultaneously as a legal tender during cash transactions, ie during that period the euro and the kuna will be in circulation at the same time.

How can businesses prepare to join the eurozone?

Assessing the expected consequences of currency swaps in business and timely preparation will make it easier to face the challenges that inevitably arise from the process of exchanging the kuna for the euro. The changeover to the euro opens up new opportunities for economic activities, and thus for business ventures.

The first step in preparation is to assess the impact of currency swaps on business, after which it is necessary to develop a plan of activities to be carried out with a pre-structured time frame. With regard to the preparation of financial plans for the year in which the euro will be introduced, businesses need to make all their plans directly in euros.

The costs of adjustment related to the process of exchanging the Croatian kuna for the euro must be borne by the business entity independently, guided by the principles of efficiency and economy defined by the Act on the Introduction of the Euro as the Official Currency in the Republic of Croatia. Regular monitoring of a predefined business plan of the business entity is crucial for detecting possible problems and risks at an early stage of adjustment, which would enable timely changes and solutions.

New European financial period

All forms related to tax and other liabilities of the business entity to the state, i.e. claims of the business entity from the state, submitted in the year in which the euro was introduced, and relating to previous years, will be filled in kuna. Regarding the data sent for fiscalization, the XML scheme will not change and the data for the period ending on 31 December 2022 will be submitted in kuna, and from 1 January 2023 in euro. During the period of dual circulation, i.e. from 1 January to 14 January 2023, the issued invoice will have to be fiscalized in euros.

All accounting data recorded in the business books (including fixed assets, small inventory, inventory of materials, goods, products and real estate) intended for sale by 31 December 2022 must be presented in kuna, and from 1 January 2023 in euro. After the date of introduction of the euro, i.e. conversion, on 1 January 2023, other currencies will be converted according to the middle exchange rate of the Croatian National Bank.

Croatia is facing a new European financial period, and for business and economic entities, this is a period for new opportunities and activities.