As of this year the VAT in Croatia is 25% (up from 23%). It was previously raised in 2009, from 22% to 23%.
We also have a zero-rate (0%) VAT and a reduced-rate (10%) VAT. The zero-rate VAT applies to bread, milk, medical supplies and a few other life necessities, while the reduced rate of 10% applies to accommodation services (eg. hotel services) and to cafes, restaurants and bars.
The zero-rate is being cancelled on Jan 1, 2013, a few months before Croatia's accession to the EU in 2013 and will be replaced with the minimum allowed EU VAT of 5%. The reduced 10% rate won't change.