Croatia Tax news 2025
January 2023It appears that Croatia has implemented some notable tax law amendments effective as of January 1, 2025.
Here's a summary of the key changes based on available information:
Individual Income Tax:
- Income Tax Rates: Amendments to income tax rates may have been introduced.
It's crucial to check the specific new rates with the tax authorities. - Personal Allowance: The personal allowance has increased from €560 to €600.
- Short-Term Rentals: New lump-sum tax ranges apply to short-term rentals, varying based on the tourist development index of the area.
- Returnees Incentive: A five-year 100% tax relief on employment income is introduced for returnees (Croatian emigrants and their descendants) who meet specific conditions.
Social Security Contributions:
- Health Insurance Contribution Exemption: The health insurance contribution exemption for employees under 30 hired after December 31, 2024, has been repealed.
- First-Time Employment: A one-year health insurance contribution exemption is available for first-time permanent employment.
Value Added Tax (VAT):
- VAT Threshold: The VAT system entry threshold has increased from €40,000 to €60,000.
- Input VAT Deductions: Provisions for input VAT deductions will be based on resolutions from the Croatian tax authorities.
- VAT Exemptions: VAT exemptions may apply to EU member states and SMEs under specified conditions.
- VAT Refunds: Non-EU taxpayers without reciprocity conditions are now eligible for VAT refunds.
- Virtual Events: The taxation of virtual event services is based on the recipient's location, not the event location.
General Tax Law:
- Tax Audit Scope: The scope of tax audits has been expanded, and the statute of limitations for cross-border transactions has been extended.
- Shareholder Liability: Shareholder liability for unfiled tax returns has been extended.
- Electronic Filing: Expanded obligation for tax return submission via ePorezna.
- Electronic Delivery: Explicit consent is required for electronic delivery of tax documents.
- Statute of Limitations: The statute of limitations for tax collection may be waived if the Croatian tax authorities cannot initiate the process.
- Administrative Agreements: Procedures for administrative agreements between taxpayers and the Croatian tax authorities have been simplified.
Other Potential Changes:
- Property Tax: There might be changes to property tax regulations.
- Fiscalization 2.0: Croatia is expected to introduce Fiscalization 2.0, which will bring major updates to the VAT reporting system, including mandatory e-invoicing for B2B transactions.
Croatia Cyprus Tax Agreement
November 2023Croatia and Cyprus signed on October 17, 2023 a double tax agreement, DTA, replacing the previous 1985 DTA with former Yugoslavia.
According to the DTA the tax withholding rate for payments of dividends is 5%.
The withholding rates for payments of interest are 0% /5%.
For royalties the rate is 5%.
Croatia Taxes 2020
January 2020Starting January 1, 2020 companies with annual income of less than HRK 7.5 million, about EUR 1 million, will pay a 12% corporate income tax.
For individuals the monthly personal allowance is increased from previous HRK 3,800 to HRK 4,000.
There is a new reduced 13% reduced V.A.T. rate relating to food serving services and certain phonographic rights.
Croatia U.K. Tax Treaty
February 2015Croatia and the U.K. signed on January 15, 2015 a new double tax treaty replacing the previous 1981 double tax treaty, DTA, between the U.K. and the former Yugoslavia.
According to the tax treaty the withholding rate for dividends will be 0%/5%/10%/15% The withholding rate for interest will be 0%/5% and 5% for royalties
Croatia Tax rates 2012
April 2012In 2012 the personal income tax rates in Croatia are progressive varying from 12% to 40%.
The corporate income tax rate is 20%.
The standard V.A.T. rate is 23%.
There is also a reduced V.A.T. rate of 10%.
Croatia Tax News 2009
October 2009From 1.8.2009 the standard V.A.T. rate in Croatia is 23%, replacing the previous V.A.T. rate of 22%.
From 1.8.2009 there is a new crisis tax imposed on individuals, in addtion to the income tax.
The rate of the crisis tax is 2% for monthly income of HRK 3,000 to HRK 6,000
For mothly income exceeding HRK 6,000 the crisis tax rate is 4%.
The crisis tas is imposed in the period starting 1.8.2009 to 31.12.2010.
Note: The information in this site is for general guidance only. Users of this site are advised to take professional advice before taking practical tax decisions.
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