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Croatia

Retail_Trading_Status

Allowed-Regulated Unknown
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Analysis ID
#557
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Created
2025-06-26 13:25
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Executive Summary

In Croatia, individual citizens and residents are legally permitted to buy, sell, and hold cryptocurrencies, though they are not considered legal tender. The regulatory environment is evolving, especially with AML/CFT requirements and the implementation of the EU's MiCA regulation, with HANFA overseeing crypto-services and HNB overseeing asset-referenced tokens. Virtual Asset Service Providers (VASPs) must register with HANFA and comply with KYC/AML procedures. Income from cryptocurrency sales is subject to a 12% tax if held for less than two years.

Key Pillars

The primary regulator is the Croatian Financial Services Supervisory Agency (HANFA), which supervises VASPs for AML/CFT compliance and oversees crypto-asset trading under MiCA. Core compliance requirements include Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) regulations, along with Know Your Customer (KYC) and Customer Due Diligence (CDD) procedures. VASPs are required to register with HANFA, and licensing requirements for Crypto-Asset Service Providers (CASPs) are expected under MiCA.

Landmark Laws

  • Anti-Money Laundering and Financing of Terrorism Act (AML Act) (amended 2020): Implemented the EU's 5th AML Directive, bringing VASPs under HANFA's supervision for AML/CFT compliance.
  • Regulation (EU) 2023/1114 (Markets in Crypto-Assets Regulation - MiCA) (Partial Applicability: 2024-12-30, Full Application & Licensing: 2025-01, Transition Period for VASPs: until 2026-07-01): Introduces uniform rules for the issuance of crypto-assets, trading in crypto-assets, and the provision of crypto-asset services throughout the European Union.

Considerations

  • Cryptocurrencies are treated as a form of marketable resource or financial asset but are not considered legal tender.
  • Income from the sale of cryptocurrencies is considered capital gains and is subject to a 12% tax if the assets are held for less than two years; if held longer, capital gains are tax-exempt. Exchanging one cryptocurrency for another is generally not a taxable event until conversion to fiat currency.
  • Authorities like HANFA and the HNB have issued general warnings about the risks of cryptocurrency investments, such as volatility and potential for fraud.
  • Some sources note that Croatian banks can be hesitant to open accounts for companies providing crypto services.

Notes

  • In 2017, the Croatian National Bank (HNB) declared that cryptocurrencies are not legal tender, and the Financial Stability Council issued warnings about the risks associated with virtual currencies.
  • HANFA maintains a register of virtual asset service providers.
  • HANFA confirmed its compliance with ESMA's guidelines on the qualification of crypto-assets as financial instruments, aiming for a clear distinction between MiFID II and MiCA.
  • Entities must notify HANFA of their virtual and fiat currency exchange and/or custodial wallet service provision activities no later than 30 days after company formation; failure to comply results in a fine.

Detailed Explanation

Individual citizens and residents in Croatia are legally permitted to buy, sell, and hold cryptocurrencies. Cryptocurrencies are not considered legal tender and cannot be used for official payments, but are treated as a form of marketable resource or financial asset. The regulatory landscape has been evolving, particularly with the implementation of Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) requirements and the upcoming full applicability of the EU's Markets in Crypto-Assets Regulation (MiCA). The Croatian National Bank (HNB) declared in 2017 that cryptocurrencies are not legal tender, and the Financial Stability Council issued warnings about the risks. However, the buying, selling, and holding of cryptocurrencies by individuals were not prohibited. In 2020, amendments to Croatia's Anti-Money Laundering and Financing of Terrorism Act (AML Act), implementing the EU's 5th AML Directive, brought virtual asset service providers (VASPs) under the supervisory purview of the Croatian Financial Services Supervisory Agency (HANFA) for AML/CFT compliance. These entities are required to register with HANFA and implement KYC/AML procedures, including customer due diligence and reporting suspicious transactions. As of early 2025, HANFA maintains a register of virtual asset service providers. Income from the sale of cryptocurrencies is considered capital gains and is subject to a 12% tax if the assets are held for less than two years. If held for more than two years, capital gains are tax-exempt. Exchanging one cryptocurrency for another is generally not a taxable event until conversion to a fiat currency. The regulatory framework is further evolving with the EU's MiCA regulation, parts of which became applicable in Croatia on December 30, 2024. Full application and licensing requirements for crypto-asset service providers (CASPs) are expected by January 2025, with a transition period for existing VASPs until July 1, 2026. HANFA is the primary regulator for supervising entities providing crypto-services and crypto-asset trading under MiCA, while the Croatian National Bank (HNB) is responsible for overseeing asset-referenced tokens (ARTs) and electronic money tokens (EMTs). HANFA has also confirmed its compliance with ESMA's guidelines on the qualification of crypto-assets as financial instruments, aiming for a clear distinction between MiFID II and MiCA. Despite the evolving regulatory framework, some sources note that Croatian banks can be hesitant to open accounts for companies providing crypto services. General warnings about the risks of cryptocurrency investments, such as volatility and potential for fraud, have been issued by authorities like HANFA and the HNB. Coinfomania reported on June 23, 2025 that cryptocurrencies are permitted in Croatia but cannot be used for official payments and that crypto businesses must register with HANFA and comply with strict AML regulations. AInvest noted on June 23, 2025 that key milestones include the HNB declaring crypto not legal tender in 2017, implementing AML/CFT regulations for virtual asset providers in 2021, introducing a 12% capital gains tax in 2023, and mandating HANFA registration in 2025. CMS Law stated that entities providing virtual asset services must carry out KYC proceedings and apply other provisions of the Croatian AML Act and register with HANFA. Manimama Law Firm indicated that HANFA does not issue licenses but entities must notify HANFA of their activities no later than 30 days after company formation, or face a fine.

Summary Points

Retail Trading of Cryptocurrencies in Croatia: Regulatory Status (June 2025)

1. General Status:

  • Allowed-Regulated: Individual citizens and residents are legally permitted to buy, sell, and hold cryptocurrencies.
  • Not Legal Tender: Cryptocurrencies are not considered legal tender and cannot be used for official payments.
  • Treated as Financial Assets: Cryptocurrencies are treated as a form of marketable resource or financial asset.

2. Key Regulatory Bodies & Roles:

  • Croatian Financial Services Supervisory Agency (HANFA):
    • Supervises Virtual Asset Service Providers (VASPs) for AML/CFT compliance.
    • Maintains a register of VASPs.
    • Primary regulator for supervising crypto-services and crypto-asset trading under MiCA.
    • Requires prior approval for companies wishing to provide crypto-services.
  • Croatian National Bank (HNB):
    • Declared cryptocurrencies are not legal tender (2017).
    • Issued warnings about the risks associated with virtual currencies.
    • Responsible for overseeing asset-referenced tokens (ARTs) and electronic money tokens (EMTs) under MiCA.
  • Financial Stability Council:
    • Issued warnings about the risks associated with virtual currencies.

3. Key Legislation & Regulations:

  • Anti-Money Laundering and Financing of Terrorism Act (AML Act):
    • Amended in 2020 to implement the EU's 5th AML Directive.
    • Brings VASPs under HANFA's supervisory purview for AML/CFT compliance.
  • Markets in Crypto-Assets Regulation (MiCA):
    • EU regulation with phased implementation in Croatia.
    • Parts became applicable at the end of 2024.
    • Full application and licensing requirements for Crypto-Asset Service Providers (CASPs) expected by January 2025.
    • Transition period for existing VASPs until July 1, 2026.
  • Personal Income Tax Act:
    • Defines cryptocurrencies as capital income and classifies them as income from other financial assets.

4. Requirements for Compliance:

  • For Virtual Asset Service Providers (VASPs):
    • Registration with HANFA.
    • Implementation of KYC/AML procedures, including customer due diligence.
    • Reporting suspicious transactions.
    • Compliance with MiCA regulations (licensing, etc.) by applicable deadlines.
    • Notification to HANFA of virtual and fiat currency exchange and/or custodial wallet service provision activities no later than 30 days after the date of company formation.
  • For Individuals:
    • Compliance with tax regulations on capital gains from cryptocurrency sales.

5. Notable Restrictions or Limitations:

  • Not Legal Tender: Cryptocurrencies cannot be used for official payments.
  • Bank Hesitancy: Croatian banks can be hesitant to open accounts for companies providing crypto services.
  • General Warnings: Authorities like HANFA and the HNB have issued general warnings about the risks of cryptocurrency investments (volatility, fraud).

6. Taxation:

  • Capital Gains Tax: Income from the sale of cryptocurrencies is considered capital gains.
    • Subject to a 12% tax if assets are held for less than two years.
    • Tax-exempt if held for more than two years.
  • Crypto-to-Crypto Trading: Exchanging one cryptocurrency for another is generally not a taxable event until conversion to a fiat currency.

7. Recent Developments & Changes:

  • MiCA Implementation: Phased implementation of the EU's MiCA regulation is underway.
  • HANFA Compliance with ESMA Guidelines: HANFA has confirmed its compliance with ESMA's guidelines on the qualification of crypto-assets as financial instruments.
  • HANFA Crypto-Registry: HANFA has established a special crypto-registry.

Full Analysis Report

Report on the Current Status of Retail Trading in Croatia

Date: 2025-06-26

Topic: Retail_Trading_Status

Description: Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

1. Identified Status

Allowed-Regulated

2. Detailed Narrative Explanation

Individual citizens and residents in Croatia are legally permitted to buy, sell, and hold cryptocurrencies. While cryptocurrencies are not considered legal tender and cannot be used for official payments, they are treated as a form of marketable resource or financial asset. The regulatory landscape has been evolving, particularly with the implementation of Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) requirements and the upcoming full applicability of the EU's Markets in Crypto-Assets Regulation (MiCA).

Historically, the Croatian National Bank (HNB) declared in 2017 that cryptocurrencies are not legal tender. The Financial Stability Council also issued warnings about the risks associated with virtual currencies. However, the buying, selling, and holding of cryptocurrencies by individuals were not prohibited.

A significant step towards regulation occurred in 2020 with amendments to Croatia's Anti-Money Laundering and Financing of Terrorism Act (AML Act), implementing the EU's 5th AML Directive. This brought virtual asset service providers (VASPs), such as exchanges and custodian wallet providers, under the supervisory purview of the Croatian Financial Services Supervisory Agency (HANFA) for AML/CFT compliance. These entities are required to register with HANFA and implement KYC/AML procedures, including customer due diligence and reporting suspicious transactions. As of early 2025, HANFA maintains a register of virtual asset service providers.

Taxation of cryptocurrency transactions is also in place. Income from the sale of cryptocurrencies is considered capital gains and is subject to a 12% tax if the assets are held for less than two years. If held for more than two years, capital gains are tax-exempt. Exchanging one cryptocurrency for another is generally not a taxable event until conversion to a fiat currency.

The regulatory framework is further evolving with the EU's MiCA regulation, parts of which became applicable in Croatia at the end of 2024, with full application and licensing requirements for crypto-asset service providers (CASPs) expected by January 2025 and a transition period for existing VASPs until July 1, 2026. HANFA is the primary regulator for supervising entities providing crypto-services and crypto-asset trading under MiCA, while the Croatian National Bank (HNB) is responsible for overseeing asset-referenced tokens (ARTs) and electronic money tokens (EMTs). HANFA has also confirmed its compliance with ESMA's guidelines on the qualification of crypto-assets as financial instruments, aiming for a clear distinction between MiFID II and MiCA.

Despite the evolving regulatory framework, some sources note that Croatian banks can be hesitant to open accounts for companies providing crypto services. General warnings about the risks of cryptocurrency investments, such as volatility and potential for fraud, have been issued by authorities like HANFA and the HNB.

In summary, retail trading of cryptocurrencies in Croatia is permitted and is subject to an increasing level of regulation, primarily concerning AML/CFT, taxation, and the phased implementation of the comprehensive MiCA framework.

3. Specific, Relevant Text Excerpts

  • Coinfomania (2025-06-23): "Yes, cryptocurrencies are permitted to possess and trade properties in Croatia, but cannot be construed as legal tender because they cannot be used for official payments."
  • Coinfomania (2025-06-23): "The crypto businesses like exchanges must register with HANFA (Croatia's financial watchdog) and comply with strict anti-money laundering regulations. Thus, legitimizing the workings of crypto trading while netting out fraud and corruption."
  • Coinfomania (2025-06-23): "Taxation-wise, Croatia says it's a straight 12% tax on your profit when you sell crypto for euros or any other currency. Cryptocurrencies could be traded tax-free against other cryptocurrencies until fiat is not involved."
  • AInvest (2025-06-23): "Key milestones include the Croatian National Bank (HNB) declaring crypto not legal tender in 2017, implementing AML/CFT regulations for virtual asset providers in 2021, introducing a 12% capital gains tax on crypto-to-fiat conversions in 2023, and mandating HANFA registration for exchanges by 2025."
  • CMS Law (undated, accessed 2025-06-26): "Crypto is currently regulated under the umbrella of AML regulation. Under AML regulation, entities providing certain services in relation to virtual assets are required to carry out KYC proceedings and apply other relevant provisions of the Croatian AML Act. Every company seated in Croatia that intends to perform respective crypto services is obliged to register with the Croatian Financial Services Supervisory Agency (HANFA), which supervises the implementation of AML obligations."
  • Manimama Law Firm (undated, accessed 2025-06-26): "Currently, HANFA does not issue licenses to cryptocurrency service providers, however, entities must notify HANFA as the supervisory authority of their virtual and fiat currency exchange and/or custodial wallet service provision activities no later than 30 days after the date of company formation. Failure to comply will result in a fine. HANFA has established a special crypto-registry."
  • HANFA (2025-01-02): "On 30 December 2024, Regulation (EU) 2023/1114, better known as the Markets in Crypto-Assets Regulation (also known as MiCA), became applicable in the Republic of Croatia. For the first time, the Regulation introduces uniform rules for business as well as supervision of the issuance of crypto-assets, trading in crypto-assets and the provision of crypto-asset services throughout the European Union."
  • HANFA (2025-01-02): "A Croatian company wishing to provide crypto-services must obtain prior approval from Hanfa. Such companies are listed in Hanfa's registers... Some Croatian companies already provide crypto-services to clients and are currently supervised by Hanfa only with respect to the prevention of money laundering and terrorist financing. They will also need to obtain Hanfa's authorisation in order to continue providing such services. They must do so until 1 July 2026 at the latest."
  • Confida (undated, accessed 2025-06-26): "The stand of the Republic of Croatia on cryptocurrencies, according to the Personal Income Tax Act, is such that cryptocurrencies are defined as capital income and are classified as income from other financial assets. Therefore, the possession of cryptocurrencies as financial assets is not taxed, but the earnings from the alienation of those assets will be taxed."
  • Confida (2024-03-05): "Long-term investors benefit from a notable tax exemption under the Croatian Income Tax Act: they avoid capital gains tax if they hold cryptocurrency for more than two years (Article 67, Paragraph 8)."

4. Direct, Accessible URL Links

Web Sources (11)

Sources discovered via web search grounding

Search queries used (6)
  • status of retail cryptocurrency trading in Croatia 2025
  • Croatia cryptocurrency regulation
  • Croatian National Bank cryptocurrency stance
  • HANFA cryptocurrency guidelines
  • AML/KYC requirements for crypto exchanges in Croatia
  • Are individuals in Croatia allowed to buy and sell cryptocurrencies?
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