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Tax rates in Croatia

Tax Rates

Consumption Taxes

Nature of the Tax
Value Added Tax - Porez na dodanu vrijednost (PDV)
Tax Rate
25%
Reduced Tax Rate
Exempt: public interest activities, postal service, hospital services and health care services, social care services, financial services, insurance transactions, real estate transactions, services closely linked to sports, etc.

5%: bread, milk, technical and educational books, medicine (approved by the State Health Insurance Office), surgical material for implants, scientific magazines, cinema tickets, newspapers and magazines published daily.

13%: on accommodation services, daily and periodic newspapers/magazines (if not for advertising purposes), oils and fats for human consumption in accordance with special legislation, supply of water (with the exception of water marketed in bottles or any other packaging), white sugar produced from sugar cane or sugar beet, car seats, babies’ nappies, baby food and processed grain food for infants and small children, concert tickets, restaurants and catering services, urns and coffins, seedlings and seeds, fertilizers and pesticides and other agrochemical products, animal food, excluding food for pets, live animals, fresh or cooled meat, fresh meat products, fresh fish, fresh crabs, fresh vegetables, fresh fruit and nuts, fresh eggs, writers, composers and artists’ services and related royalties, etc.

Other Consumption Taxes
Excise taxes are levied on oil products, tobacco, alcoholic beverages, soft drinks, coffee, electricity, natural gas, cole and coke, personal cars (except for electric cars) and luxury products.

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Corporate Taxes

Company Tax
18%
Tax Rate For Foreign Companies
Non-resident companies are subject to the same tax rates as local firms but only on their Croatia-source income. Companies qualifying for the Investment Promotion Act may be eligible for a 50% or 100% deduction in income tax rate for a five to ten-year period, depending on the size of the enterprise, the amount of the investment, and the number of new jobs created. The minimum amount of investment in fixed assets is EUR 50,000 with three new jobs created for micro-enterprises, and EUR 150,000 with five new jobs created for small and SMEs and large enterprises.
An entity is resident if it is incorporated and registered in Croatia or if it is controlled and managed in the country.
Capital Gains Taxation
Capital gains are included in taxable income and taxed at the standard corporate income tax rate of 18% (or 10% for companies whose annual income is below HRK 7.5 million).
Main Allowable Deductions and Tax Credits
Amortisation of tangible and intangible assets is tax-deductible at rates ranging from 5% to 50%. Land, financial assets, cultural monuments and works of art are not affected by this depreciation. Goodwill cannot be amortised for tax purposes.
Start-up expenses can be deducted in the year in which they were incurred.
Interest charges are deductible up to the higher of 30% of taxpayer's earnings before interest, tax, depreciation, and amortisation (EBITDA), or to EUR 3 million. Interest expenses that cannot be deducted in their year of occurrence may be carried forward to a period of three years.
Bad debts are generally deductible. Receivable write-offs that are made in line with the regulations on bankruptcy that apply to special interest entities, are also deductible.
Donations to charitable organisations are deductible up to 2% of the previous year's taxable income. This rate can be exceptionally higher if donations are made according to ministerial policies on the funding of special activities or programmes.
Fines and taxes are not tax-deductible.
Tax losses can be carried forward up to five years. The carryback of losses is not permitted.
Other Corporate Taxes
The purchase of real estate is subject to a property transfer tax of 3% of the market value of the property in question. The acquisition of property subject to VAT is exempt from property transfer tax. There is no regular property tax to pay.
Social security contributions payable by the employer amount to 16.5% of salary. Companies with more than 20 employees not complying with prescribed requirements for disabled employees are obligated to pay a monthly fee amounting to 30% of minimal salary (HRK 4,687.50 in 2022).
Employers are not liable for payroll tax, but they are required to withhold between 20% and 30% of their employees' gross income.
The annual membership fee to the Croatian Chamber of Commerce (mandatory) varies between HRK 42 and HRK 3,973 depending on the type of company.
No stamp duties are levied in Croatia. Companies may be subject to forest contributions, tourism contributions, and cultural monument contributions.
Other Domestic Resources
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Country Comparison For Corporate Taxation

  Croatia Eastern Europe & Central Asia United States Germany
Number of Payments of Taxes per Year 12.0 13.9 10.6 9.0
Time Taken For Administrative Formalities (Hours) 206.0 226.2 175.0 218.0
Total Share of Taxes (% of Profit) 20.5 36.5 36.6 48.8

Source: Doing Business, Latest available data.

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Individual Taxes

Tax Rate

Personal income tax
HRK 0 - 360,000 20%
Over HRK 360,000 30%
Interest on savings accounts 10%
Municipal tax Ranging from 0% to 18%
Allowable Deductions and Tax Credits
All individuals are entitled to a flat monthly deduction from their income up to HRK 4,000. The monthly allowance for a family dependent is HRK 1,750 per dependent (HRK 2,500 for second child, HRK 3,500 for third child), plus HRK 1,000 for disabled persons.
Other deductions include social security contributions on wages of new employees (in the first year of their employment), health insurance contributions and scientific research expenses (for self-employed individuals).
Gross income is reduced by the individual’s pension contribution payments (calculated at a rate of 20% of gross income from employment and at a rate of 10% of certain other gross income).
Special Expatriate Tax Regime
Resident taxpayers are subject to worldwide taxation in Croatia. Non-resident taxpayers are liable for their Croatian-source income.
Income earned by individuals who are employed or work as a freelancer for a foreign employer not registered in Croatia and who have the status of a “digital nomad” under the new Foreigners’ Act is exempt from taxation.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of the Double Taxation Agreements
Withholding Taxes
Dividends: 0 (resident company)/10%/20% (if paid to a company in a blacklisted country)/10% (for individuals), Interest: 0 (resident company)/15%/20% (if paid to a company in a blacklisted country)/10% (for individuals), Royalties: 0 (resident company)/15%/20% (if paid to a company in a blacklisted country)/20% (for individuals).

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Latest Update: November 2022