Taxation in Croatia

From Wikipedia, the free encyclopedia

Taxes in Croatia are levied by both the central and the regional governments. Tax revenue in Croatia stood at 37.8% of GDP in 2017.[1] The most important revenue sources are income taxes, social security contributions, corporate tax and the value added tax, which are all applied on the national level. Within broader fiscal policy, tax revenue was at 21.3% of GDP, in 2023.[2]

Income tax is determined by the amount of income and place of residence. The tax is levied at a lower or higher rate defined by the government and determined by the local government unit. The threshold between the lower and higher rates is set at an annual income of €50,400 equating to a monthly income of €4,200.[3]

Residence Lower rate Higher rate
Municipality 15% - 20% 25% - 30%
City with less than 30,000 residents 15% - 21% 25% - 31%
City with more than 30,000 residents 15% - 22% 25% - 32%
City of Zagreb 15% - 23% 25% - 33%

Value add tax

Value add tax (VAT) is levied at three different rates. The standard rate is 25%, two reduced rates are 13% and 5% apply on different goods and services.[4] The 13% rate apply for newspapers, magazines, bread and milk; books and scientific journals, hotels and medicines.[5]

Employment income tax

Employment income is subject to social security, at a rate of 16.5% for the employer and 20% for the employee.[6]

Insurance policy Employee % Employer %
Pension Fund 15%[7] -
Capital savings 5%[8] -
Health - 16.5%
Total 20.0% 16.5%

Corporate taxation

Corporate tax depends on the revenue the company earns.[9]

Revenue Rate
Less than €1 million 10%
More than €1 million 18%

Certain expenses are tax deductible for businesses including personal means of transportation. Resident businesses are taxed on worldwide income, while foreign companies in Croatia are taxed on profits earned in Croatia.[10]

See also

References

Further reading

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