Taxes in Croatia
Investors who want to start a business in Croatia and enter the European market need to familiarize themselves with the local tax system. Croatia has a seriously developed taxation system. Taxes are levied on all residents of the country, and such are citizens who have housing in the country or are physically in Croatia for more than 182 days a year. Residents of Croatia are required to pay taxes on all types of income, regardless of the country in which they are received.
What are the taxes
Business organizations in Croatia are subject to two types of taxes: income tax and value-added tax. Other taxes in Croatia that companies face are customs duties, real estate taxes, excise taxes, the levy for social security.
Corporate income tax
In Croatia, both residents and non-residents of the country must pay corporate tax. The interest rate is different from 15% to 45% depending on income. Income tax is calculated taking into account the difference between income received during the year and expenses incurred for the same period. If we take local enterprises, then the tax rate on their profits will be 20%.
Withholding tax
Withholding tax on dividends and profit shares are taxed at the rate of 12%. If the business uses a tax allowance for reinvested profit, other than that earned in the banking or the financial non-banking sector, Withholding on such dividends and profit shares is not taxed.
Value Added Tax (VAT)
VAT in Croatia is 22%. It is not levied on certain groups of goods and services, for example, from the rental of residential premises, from the services of banks and insurance companies, the production and sale of milk, medicines, and other goods.
Request bookkeeping solution
If you have a company in Croatia, it is mandatory to do accounting and complete all taxation rules according to Croatia laws. Many businesses fail to implement the bookkeeping process and that is why professional assistance is needed. Besides, the tax return is filed with the tax authority once a year until the end of February of the year following the reporting year.
Accountancy
Tax system
Entrepreneurial organizations in the republic are subject to two types of taxes: income tax and value-added tax.
Other taxes that companies face are:
- customs duties,
- real estate taxes,
- excise taxes,
- levy for social security.
Besides, municipal governments are empowered to levy additional taxes on top of the portion of income and income taxes that are paid to them from the central government.
Direct tax
Corporate income tax (corporate income tax), personal income tax, council tax levied by the government on behalf of the communes, property tax, a land tax levied by municipalities independently.
Indirect tax
VAT, excise taxes on fuel, tobacco, alcohol.
Fees
Annual registration tax, registration and stamp duties, import duties.
The tax rate in Croatia
Municipalities have the right to impose an additional income tax of 10% to 30%, depending on the number of residents. Today the highest level of surcharge in Croatia exists in Zagreb (18%).
Residents are entitled to the following deductions from their total income: up to HRK 12,000 (€ 1,659) per year for various expenses: insurance premiums; donations for cultural, educational, scientific, medical, humanitarian, sports, and religious purposes (up to 2% of the income indicated by the taxpayer in the previous year).
Business in Croatia
Our company provides services for setting up a company in Croatia. The specialists of our company have the necessary knowledge, experience, and qualifications. We can offer a consultation with taxes in Croatia. Also, we provide business support, accounting, and other services necessary for your business. Our specialists have vast experience in this field of activity. We will be glad to help you successfully open a business in Croatia.
READY FOR NEXT STEP
Accelerate your business growth while we take care of everything else.