Croatia Tax Laws and Regulations
Croatian Tax Laws
Bradford Jacobs ensures our clients comply with every aspect of taxation – wherever they operate. Our reputation as a front-line payroll provider is based on more than 20 years of experience. Our combination of local knowledge and global experience guarantees solutions to every problem.
This know-how is essential when foreign corporations are expanding their worldwide reach into the Republic of Croatia, a rapidly developing Balkan economy on the Mediterranean’s Adriatic coastline. Croatia, a member of the European Union, the World Trade Organization and the Council of Europe, was expected to join the Schengen Area by the end of 2022 and was also negotiating membership in the Organization for Economic Cooperation and Development.
Bradford Jacobs’ dedicated specialists remove the burden of worrying about complications while you focus on building your business in a new territory. From locating the brightest talent to running your payroll, our Professional Employer Organization (PEO) and Employer of Record (EOR) specialists are with you every step of the way.
Overview of Taxes in Croatia
* Croatia is not in the Eurozone and uses the Kuna (HRK) as its currency.
Personal Income Tax (PIT): There are proportional rates of 20% up to HRK 360,000 (€47,566, US$51,368) and 30% for the excess above that.
Social Insurance Taxes: Employees contribute 20% of gross income to the Croatian Pension Insurance Institute (HZMO). Employers contribute 16.5% to the Croatian Health Insurance Fund (HZZO).
Corporate Income Tax (CIT): Companies pay the standard rate of 18% on taxable profits. A rate of 10% applies to companies with revenue in the tax year below HRK 7.5 million (€990,962, US$1,070,176).
Value Added Tax (VAT): The headline rate on goods and services is 25%, with 13% applied to such accommodation services, some newspapers and periodicals, goods for children and childcare, some leisure activities, and various foodstuffs. Exempt categories include financial services and rental fees.
Croatia Individual Tax – Single, Married
The tax year is the calendar year; married couples cannot submit joint returns and must file independently. Returns are submitted by the end of February following the tax year, with outstanding taxes paid within 15 days of receiving an assessment from the Tax Administration. Individual resident taxpayers are liable for their worldwide profits, while those considered non-residents are taxed only on income sourced in Croatia. Tax residents are individuals who reside in Croatia for 183 days in one or two tax years, or who have real estate at their disposal for the same period, even if they do not physically live in them. Those who do not fulfil these criteria are deemed, non-residents.
* Croatia is not in the Eurozone and uses the Kuna (HRK) as its currency.
Figures in HRK, euros and US dollars
Personal Income Tax (PIT): There is a monthly tax-free allowance of HRK 4,000 (€528, US$570).
20%: 0 – HRK 360,000 (€47,566, US$51,368)
30%: Excess above HRK 360,000
Social Insurance Taxes: Employees contribute to the Croatian Pension Insurance Institute (HZMO)
20%: Percentage of gross salaries