Tax treatment for residents and non-residents is equalized, and when taxing non-residents, the concluded agreements on avoidance of double taxation, which Croatia has signed with over 65 countries, are also taken into account. Basic forms of taxes in the tax system of the Republic of Croatia:
Corporate Income Tax (Profit Tax)
- 10% for revenues up to EUR 1,000,000.00 generated in the tax period, or
- 18% for the revenues generated in the tax period are equal to or greater than EUR 1,000,000.00.
Income tax rate on withholding tax:
- 15% in general,
- 10% for dividends and profit shares and for performances by foreign performers,
- 25% on all types of taxable fees and services, as well as on market research, tax and business consulting and audit services, when 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 in tax purposes, with which the Republic of Croatia does not apply the treaty on the avoidance of double taxation.
Capital income tax
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
Income Tax rate (income from independent work, income from self-employment and other income) is:
- 15%-23.6%* for a monthly basis up to 4,200.00 euros (50,400.00 euros per year)
- 25%-35.4%* for a monthly basis of 4,200.00 euros (50,400.00 euros per year)
*If the representative body of the local self-government unit has not made a decision to prescribe the level of tax rates, a rate of 20% is applied to the tax base up to EUR 50,400.00 per year and 30% to the part of the tax base that exceeds the amount of EUR 50,400.00 per year.
Tax on final income (income from property and property rights, income from capital and other income)
- 12%, 24% or 35%; depending on the source of income
Value Added Tax (VAT)
When calculating VAT, in accordance with the Value Added Tax Act, four rates are applied:
- 25% is general rate
- Reduced VAT rate of 13%
- Reduced VAT rate of 5%
- Reduced VAT rate of 0%
Real Estate Transfer Tax
- Real estate Transfer Tax rate is 3%*.
*The real estate transfer is not calculated for the acquisition of real estate for which the value added tax (VAT) is payable. Value added tax (VAT) of 25% is calculated and paid by taxpayers who are registered in the register of VAT payers when they deliver construction land and buildings, or parts of buildings (and the land on which they were built), if these buildings and their parts are delivered before the first occupancy or use or where no more than two years have passed from the date of first occupancy or use to the date of the next transfer.
Source: Invest in Croatia