Tax system
Basic forms of taxes in the tax system of the Republic of Croatia:
Profit tax:
- 10% if revenues up to HRK 7.500.000,00 were realized in the tax period or
- 18% if the income generated in the tax period is equal to or greater than HRK 7.500.000,01.
Law on Profit Tax (Official Gazette 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)
Withholding tax:
- 15% general rate; and for the performances of foreign performers
- 10% for dividends and profit shares and for performances by foreign performers,
- 20% on all services and all types of fees, when they are paid to persons who have their headquarters or place of actual administration or business supervision in countries that are on the EU list of non-cooperative jurisdictions for tax purposes, and with which the Republic of Croatia does not apply the double taxation avoidance agreement .
Law on Profit Tax (Official Gazette 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)
Capital gains tax based on interest, including capital income tax based on capital gains it is paid at the rate of 10%.
Law on Income Tax (Official Gazette 115/16, 106/18, 121/19, 32/20, 138/20)
Income tax:
- 20% up to HRK 360.000,00 per year (up to HRK 30.000,00 per month)
- 30% above HRK 360.000,00 per year (above HRK 30.000,00 per month)
In addition to income tax, the taxpayer also pays an income tax surcharge imposed by municipalities and cities. The basis for calculating the surcharge is the amount of income tax. Surcharge rates are (as shown below) from 0% to 18%, and the highest rate applies only in Zagreb (18%).
Income tax surcharge rates:
- Municipality up to 10%
- City under 30.000 inhabitants up to 12%
- City over 30.000 inhabitants up to 15%
- City of Zagreb up to 18%
Law on local taxes NN 115/16, 101/17
Law on Income Tax (Official Gazette 115/16, 106/18, 121/19, 32/20, 138/20)
Value Added Tax (VAT)
When calculating VAT, in accordance with the Value Added Tax Act (Official Gazette 73/13, 148/13, 143/14, 115/16, 106/18, 121/19, 138/20, 39/22), three rates:
- 25% is the general rate
- A reduced rate of 5% on deliveries of the following goods and services:
- all kinds of bread,
- all types of milk marketed under the same name in liquid form, fresh, pasteurized, homogenized, condensed (except sour milk, yogurt, kefir, chocolate milk and other dairy products), breast milk substitutes,
- books of professional, scientific, artistic, cultural and educational content, textbooks for pedagogic education and training, for primary, secondary and higher education, with the exception of those that wholly or largely contain advertisements or are used for advertising and with the exception of those that are wholly or largely consist of video or music content,
- drugs that have the approval of the competent authority for drugs and medical products,
- medical equipment, aids and other devices that are used to alleviate the treatment of disability exclusively for the personal use of the disabled prescribed by the general act on orthopedic and other aids of the Croatian Insurance Institute,
- cinema tickets, tickets for concerts, sports events and cultural events, except those services in culture and closely related deliveries of goods, which are performed by institutions in culture, bodies with public authority or other legal entities in culture and which are exempt from VAT,
- newspapers of a newspaper publisher that has a media statute, which are published daily, except for those that entirely or mostly contain advertisements or are used for advertising, and except for those that entirely or mostly consist of videos or music content,
- scientific journals,
- baby food and processed cereal-based food for infants and young children,
- edible oils and fats, of vegetable and animal origin, butter and margarine,
- delivery of live animals: cattle, pigs, sheep, goats, horses, donkeys, domestic poultry, rabbits and hares,
- delivery of fresh or chilled meat and edible slaughter products from: cattle, pigs, sheep, goats, horses, donkeys, domestic poultry, rabbits and hares,
- delivery of fresh or chilled sausages and similar meat products, meat slaughter products or blood,
- delivery of live fish,
- delivery of fresh or chilled fish, molluscs and other aquatic invertebrates,
- delivery of fresh or chilled crustaceans: lobsters, lobsters, shrimps, prawns,
- delivery of fresh or chilled vegetables, roots and tubers, including leguminous dry vegetables,
- delivery of fresh and dry fruits and nuts,
- delivery of fresh poultry eggs, in shell,
- seedlings and seeds,
- fertilizers and pesticides and other agrochemical products,
- products that are mainly used as animal feed, except for pet food,
- delivery of natural gas, including fees related to that delivery
- A reduced rate of 13% on deliveries of the following goods and services:
- accommodation or accommodation with breakfast, half board or full board in hotels or facilities of similar purpose, including accommodation during vacations, renting space in holiday camps or in places designated for camping and accommodation in nautical tourism vessels,
- newspapers and magazines of a newspaper publisher that has a media statute, and newspapers and magazines of a publisher for which there is no obligation to adopt a media statute according to a special regulation, except for those from point 2.g) that are published periodically, except for those that entirely or mostly contain advertisements or serve advertising and except for those that consist entirely or mostly of video or music content,
- baby car seats and baby diapers,
- menstrual supplies,
- delivery of water, except water that is placed on the market in bottles or in other packaging, in terms of public water supply and public drainage according to a special regulation,
- delivery of electricity to another supplier or end user, including fees related to that delivery,
- delivery of natural gas and heating from thermal stations, including fees related to these deliveries
- firewood, pellets, briquettes and wood chips,
- public service for the collection of mixed municipal waste, biodegradable municipal waste and separate waste collection according to a special regulation,
- urns and coffins,
- services and related copyrights of writers, composers and performing artists and holders of phonogram rights who are members of appropriate organizations for the collective exercise of rights that perform this activity according to special regulations in the field of copyright and related rights and with the prior approval of the state administrative body responsible for intellectual property,
- preparation and serving of meals and desserts in the catering establishment and outside the catering establishment according to a special regulation.
Law on Value Added Tax (OG 73/13, 148/13, 143/14, 115/16, 106/18, 121/19, 138/20, 39/22)
Real estate transfer tax
The real estate tax rate is 3% and is paid by the buyer.
The tax base is the market value of the property at the time of tax liability. The market value of the real estate is the price of the real estate that is achieved or can be achieved on the market at the time of tax liability. The subject of taxation is real estate transactions. The transfer of real estate is not considered an acquisition of real estate for which value added tax (VAT) is payable.
Law on real estate transaction tax (Official Gazette 115/16, 106/18)