Croatia Income Tax Rates 2018
Last partial update March 2018
Individual Income Tax:
Croatia's individual income tax rates for 2018 are progressive, 24% and 36%.
| Income (HRK) | % |
|---|---|
| 1-210,000 | 24 |
| over 210,000 | 36 |
Corporate Tax: Croatia's corporate tax rate for 2018 is 18%.
Certain small companies pay a lower corporate tax rate of 12%.
Croatia Capital Gains
Capital Gains: Capital gains of companies are added to the regular income and are taxable at 18% rate.Individuals: Pay 12%/36% for their capital gains.
Croatia Residence
A foreign company is resident if incorporated in Croatia or have its actual management in Croatia.An individual is resident when having a permanent residence in Croatia or when having a place of abode for more than 183 days in a tax year.
Residents pay tax on their worldwide income. Non residents pay tax only on Croatia source income.
Croatia Tax Deductions
- Losses are carried forward for 5 years. There is no carry back of losses.
- Depreciation is deducted using the straight line method for tangible and intangible assets.
The depreciation rate for buildings is 5%,for machinery 25% and 50% for computers, software and cellolar phones. - There is no company consolidation for tax purpose, each company has to file separately.
- Thin capitalisation rules relate to interest expenses.
Interest paid to a shareholder having 25% or more of the voting rights and his loan to equity ratio exceeds 4:1 is not deductible. - Transfer pricing rules in Croatia are in accordance with the OECD guidelines.
Croatia Personal Credits and Deductions
For Croatian residents there is a basic deduction of HRK 45,600 per year.The sum is increased for a dependent spouse and dependent children, ranging up to HRK 31,200 for the third child.
Deductions are also permitted for payments to Croatian pension plans, insurance and cost of purchase of the first residence up to a limit.
2% of donations are deductible, subject to a ceiling.
For companies, dividend income is tax exempt.
Deduction of Tax at Source
In Croatia tax is deducted at source from the following payments to non resident companies:Dividend- 12%.
Interest- 15%.
Royalties- 15%.
Branch remittance to head office- 0%.
Croatia Social Security
The contributions by the employer and the employee are subject to ceiling defined by law.Employer: 17.2% of the gross salary.
Employee: 20% of the gross salary. (pension).
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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