Tax and customs system

Tax System

 

Tax treatment of residents and non residents is equal. Taxation of non residents is conducted respecting double taxation avoidance contracts which Croatia has signed with over 60 countries.

 

Basic tax types in Croatian taxation system:

Taxes Tax rate
Corporate Income Tax  (Profit Tax)

Tax rate is 12% if a company generated revenues up to 3.000.000,00 kuna in the tax period, or 18% if the revenues in the tax period were higher than 3.000.000,01 kuna.

12% and 18%
Income tax rate on withholding tax:

  • 15% in general;
  • 12% on dividends and shares in corporate income (profit)
  • 20% on all services and all types of fees taxable when paid to persons who have their registered office, headquarters or supervision in the countries listed on the EU list of non-cooperative jurisdictions for tax purposes and to which the Republic of Croatia does not apply the double taxation avoidance contract.
12%

15%

20%

Income Tax and Surtax

 Income Tax rate is:

  • 24% for income to 360,000 HRK / 48,583 EUR per year

(up to 30,000 HRK / 4,048.58 EUR per month)

  • 36% for income above 360,000 HRK / 48,583 EUR per year

(above 30,000 HRK / 4,048.58 EUR per month)

1 EUR = 7.41 HRK

In the addition to income tax, the taxpayer also pays surtax on income tax, stipulated by municipalities and cities. The basis for the surtax calculation is the amount of income tax. The surtax rates range (as shown below) from 0% to 18%, with the highest rate applied only in Zagreb (18%).

Surtax Rates Range:

  • Municipalities up to 10%
  • Cities below 30,000 inhabitants up to 12%
  • Cities over 30,000 inhabitants up to 15%
  • City of Zagreb up to 18%
24% and 36%
Value Added Tax (VAT)

 When calculating VAT, three rates are applied:

  • 25% is general rate
  • Reduced VAT rate of 13% is applied for following goods and services:
  • A) Accommodation or accommodation services with breakfast, half board or full board in hotels or similar purposes, including holiday accommodation, rental of premises in camps or in places designated for camping and accommodation on nautical tourism vessels,
  • B) Newspapers and periodicals of a newspaper publisher having a media statute and newspapers and periodicals of publishers for which there is no obligation to adopt a media statute under a special regulation, other than those to which VAT rate of 5% applies, printed on paper that goes out periodically and other than those which overall or in part contain ads or are used for advertising,
  • C) Edible oils and fats, of plant and animal origin,
  • D) Car seats for children and baby food and processed cereal-based foods for infants and young children,
  • E) Water delivery, other than water placed on the market in bottles or in other packaging, in terms of public water supply and public drainage according to a special regulation,
  • F) Tickets for concerts,
  • G) Supply of electricity to other supplier or end-user, including the fees related to a delivery,
  • H) Public service of collecting of mixed municipal waste, biodegradable municipal waste and separate collection of waste according to a special regulation,
  • I) Urns and coffins,
  • J) Seedlings and seeds,
  • K) Fertilizers and pesticides and other agrochemicals,
  • L) Animal feed, other than pet food.
  • Reduced VAT rate of 5% is applied for following goods and services:

A) All types of bread,

  • B) All types of milk (cows, sheep, goats), put on the market under the same name in liquid form,

fresh, pasteurized, homogenized, condensed (except sour milk, yogurt, kefir, chocolate milk

and other dairy products), substitutes for breast milk,

  • C) Books of professional, scientific, artistic, cultural and educational content, textbooks for

pedagogical education, primary, high school and higher education, in all physical forms,

  • D) Medicines sold on a prescription and having the approval of a competent body for medicines

and medical products,

  • E) Medical equipment, aids and other devices used to relieve the disability treatment exclusively

for the personal use of the disabled prescribed by the Ordinance on Orthopedic and Other

Aids of the Croatian Institute for Health Insurance,

  • F) Cinema tickets,
  • G) Newspaper of a newspaper publisher who has media statue, and is printed on paper and

issued daily, other than those containing, overall or in major part ads or advertising,

  • H) Scientific journals.
25%
Real Estate Transfer Tax

Real estate Transfer Tax rate is 3% and is paid by the buyer.

The tax base is the market value of the property at the time of the tax liability. The market value of a property is the price of a real estate that is achieved or can be achieved on the market at the moment of the tax liability. Object of taxation is a real estate transaction. The real estate transfer is not considered to be the acquisition of real estate for which the value added tax (VAT) is payable.

3%

Customs system

By the accession of the Republic of Croatia to the European Union, the area of the Republic of Croatia became a part of a single customs territory of the Union. The entry into a single customs territory of the EU means that, as of July 1, 2013, all customs control over entry of goods or trade between Croatia and the other Member States is abolished. Trade between domestic goods between persons in different Member States is not considered as imports and is not a subject to customs procedures and supervision.

The subjects of customs control are the goods brought from countries that are not EU members and which are subjects to customs supervision from the time of its entry. These goods require customs-approved treatment or use. Implementation of the new Customs Code, according to the EU Regulation 952/2013 started on 1 May 2016. Given that the application of the provisions of the Customs Code requires the development of new applications, or refinement of existing applications, Commission Implementing Decision of the Work Programme for the Union Customs Code of April 29, 2014 adopted the program that contains a list of electronic systems that need necessary transitional period that may last till December 31, 2020.

Please note that the information on Croatian Tax System is updated according to a major tax reform that took effect since January 1st 2019. For more information, please contact the Croatian Ministry of Finance:

Ministry of Finance

Katančićeva 5,

HR – 10 000 Zagreb

P: +385 1 4591 333

www.mfin.hr

 

 

From January 1, 2019, the Ministry of Economy, Entrepreneurship and Craft is in charge of investments processes in Croatia – invest@mingo.hr.