Tax system

• 10% for revenues up to EUR 995,421.06 generated in the tax period or
• 18% for the revenues generated in the tax period are equal to or greater than EUR 995,421.06.

Profit Tax Act (OG 177/04, 90/05, 57/06, 146/08, 80/10, 22/12, 148/13, 143/14, 50/16, 115/16, 106/18, 121/19, 32/20, 138/20, 114/22)

• 15% in general
• 10% for dividends and profit shares and for performances by foreign performers
• 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.

Profit Tax Act (OG 177/04, 90/05, 57/06, 146/08, 80/10, 22/12, 148/13, 143/14, 50/16, 115/16, 106/18, 121/19, 32/20, 138/20, 114/22)

15%

20%

Capital income tax on the basis of interest, as well as capital income tax on the basis of capital gains is paid at the rate of 10%.

Income Tax Act (OG 115/16, 106/18, 121/19, 32/20, 138/20, 151/22)

 Income Tax rate is:

• 20% for income to EUR 47,780.28 per year (up to EUR 3,981.69 per month)

• 30% for income above EUR 47,780.28 per year (above EUR 3,981.69 per month)

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%

Act on Local Taxes (OG 115/16, 101/17, 114/22)​

Income Tax act (OG 115/16, 106/18, 121/19, 32/20, 138/20, 151/22)

When calculating VAT, in accordance with the Value Added Tax Act, four rates are applied:

(1) 25% is general rate

(2) Reduced VAT rate of 5% is applied for following goods and services:

a) all types of bread,

b) all types of milk (cow’s, sheep’s, goat’s) put on the market under the same name in liquid form, fresh, pasteurized, homogenised, condensed (excluding sour milk, yoghurt, kefir, chocolate milk and other milk products), substitutes for breast milk,

c) books of professional, scientific, artistic, cultural and educational content, textbooks for pedagogical education, for primary, secondary and higher education, except for those which contain or serve advertising in whole or in part and other than those which are entirely or they mostly consist of videos or music content,

d) medicinal products authorized by the competent authority for medicinal products and medical devices,

e) medical equipment, aids and other devices used to alleviate the treatment of disability exclusively for the personal use of the disabled prescribed by the general act on orthopaedic and other aids of the Croatian Health Insurance Institute,

f) cinema tickets, tickets for concerts, sports events and cultural events, other than cultural services and closely related supplies of goods, performed by cultural institutions, public authorities or other legal entities in culture exempt from VAT,

g) newspapers of a newspaper publisher having a media statute, which are published daily, other than those which contain or serve advertising in whole or in part and other than those which consist, in whole or in part video or music content,

h) scientific journals,

i) baby food and processed cereal-based foods for infants and young children,

j) edible oils and fats, of vegetable and animal origin, butter and margarine,

k) delivery of live animals: cattle, pigs, sheep, goats, horses, donkeys, domestic poultry, hares and rabbits

l) delivery of fresh or chilled meat and edible slaughter products from: cattle, pigs, sheep, goats, horses, donkeys, domestic poultry, hares and rabbits,

m) delivery of fresh or chilled sausages and similar meat products, meat slaughter products or blood,

n) delivery of live fish,

o) delivery of fresh or chilled fish, molluscs and other aquatic invertebrates,

p) delivery of fresh or chilled crabs,

r) delivery of fresh or chilled vegetables, roots and tubers, including leguminous dried vegetables,

s) delivery of fresh and dried fruits and nuts,

t) delivery of fresh poultry eggs, in shell,

u) seedlings and seeds,

v) fertilizers and pesticides and other agrochemical products,

z) products mainly used as animal feed, except pet food,

ž) supply of natural gas, including charges related to that supply and delivery of firewood, pellets, briquettes and wood chips (exceptionally, until March 31, 2024)

(3) Reduced VAT rate of 13% is applied for following goods and services:

a) accommodation services and accommodation with breakfast, half board or full board services in hotels or similar purpose facilities, including holiday accommodation, accommodation rental in holiday camps or places designated for camping and accommodation in nautical tourism vessels,

b) newspapers and magazines of a newspaper publisher with 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, that are issued periodically apart from those which overall or in part contain ads or are used for advertising, or which consist in whole or in part of video or music content,

c) child car seats and baby diapers,

d) menstrual supplies,

e) water delivery, other than water placed on the market in bottles or another packaging, in terms of public water supply and public drainage according to a special regulation,

f) electricity supply to another supplier or final user, including charges related to that supply,

g) supply of electricity to other suppliers or end-users, including the fees related to delivery,

h) firewood, pellets, briquettes and wood chips,

i) public service of mixed municipal waste collection, biodegradable municipal waste and separate waste collection pursuant to a special regulation,

j) urns and coffins,

k) services and related copyrights of writers, composers and performers and holders of phonogram rights who are members of appropriate collective management organizations performing this activity pursuant to special regulations in the copyright field and related rights and with the prior approval of state administration body responsible for intellectual property,

l) preparation and serving of dishes and desserts in the catering facility and outside the catering facility pursuant to a special regulation.

(4) Reduced VAT rate of 0% is applied for delivery and installation of:

a) solar panels on private residential buildings, living spaces and public and other buildings used for activities of public interest and the delivery and installation of solar panels in the vicinity of such buildings, spaces and buildings.

Value Added Tax Act (OG 73/13, 99/13, 148/13, 153/13, 143/14, 115/16, 106/18, 121/19, 138/20, 39/22, 113/22, 33/23)

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.

Real Estate Transaction Tax Act (OG 115/16, 106/18)