Croatia –Investment opportunity for foreign investors-general Informations:
- Area: 56,594 km2
- 4.4 million inhabitants
- Territorial organization: 20 counties and the city of Zagreb
- Capital: Zagreb
- Currency: EUR K
- Climate: continental and Mediterranean
There is no tax on the licensing of shares in companies and no inheritance tax on first-degree legal heirs
Property transfer tax: 5%
German citizens have an interest tax of 0% and a dividend and profit-sharing tax of 5-15%, depending on whether the company holds more or less than 10% of the shares.
Slovenian citizens have an interest tax of 5% and a dividend and profit share tax of 5%, regardless of the acquirer’s share
Austrian citizens have an interest tax of 5% and a dividend and profit-sharing tax of 0-10%, depending on whether they own less or more than 25% of the company’s shares.
Croatia’s taxation system is structured similarly to those of many European countries, with taxes levied at the national and local levels. Here’s an overview of the main aspects of taxation in Croatia:
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1. Personal Income Tax (Porez na dohodak)
• Rates:
o 20% on annual income up to €47,780 (approx. HRK 360,000).
o 30% on annual income exceeding €47,780.
• Tax-free Allowance:
Individuals are entitled to a personal tax allowance (currently HRK 4,000/month or about €530). Additional allowances are granted for dependents, students, and disabled persons.
• Social Contributions:
Employees and employers pay mandatory contributions for health insurance, pensions, and unemployment.
o Employee: 20% pension contribution.
o Employer: ~16.5% for health insurance and other contributions.
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2. Corporate Income Tax (Porez na dobit)
• Rates:
o 10% for businesses with annual revenue up to HRK 7.5 million (€1 million).
o 18% for businesses with revenue exceeding this threshold.
• Special Regimes:
Small businesses and micro-enterprises may be eligible for reduced rates or simplified regimes.
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3. Value-Added Tax (Porez na dodanu vrijednost – PDV)
• Standard Rate: 25%
• Reduced Rates:
o 13% (e.g., accommodation, food preparation, child car seats).
o 5% (e.g., basic food items like bread, milk, books, medicines).
Businesses with annual revenue below HRK 300,000 (€40,000) are exempt from VAT.
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4. Real Estate Transfer Tax (Porez na promet nekretnina)
• Rate: 3%
o Paid by the buyer when purchasing real estate.
o Exemptions apply for certain first-time homebuyers.
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5. Property Tax
• Croatia does not currently impose a general property tax, though there is a local utility tax based on property usage.
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6. Excise Duties
Applied to specific goods such as alcohol, tobacco, energy products, and vehicles. Rates vary depending on the product category.
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7. Local Taxes
Municipalities and cities impose local taxes, including taxes on vacation homes, consumption (restaurants, bars), and public land usage. These rates vary by region.
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8. Double Taxation Treaties
Croatia has signed agreements with many countries to avoid double taxation, reducing the tax burden on international businesses and individuals.
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If you’re planning to work, invest, or open a business in Croatia, consulting with a tax professional is highly recommended to navigate the nuances of the tax system and ensure compliance