Croatia Tax Update 2020: VAT, PIT, CIT

9. March 2020 | Reading Time: 2 Min

Croatia tax highlights tpa news

1. Value Added Tax in Croatia

  • Standard rate remains 25%.
  • Reduced rate of 13% extends to:
    • preparing and serving meals and desserts in and out of restaurants and
    • services and related copyrights of writers, composers and artist performers and holders of phonogram rights.
  • Possibility to charge VAT on the cash basis increases to a value of HRK 7,500,000.00.
  • Implementation of VAT Quick Fixes in EU transactions.
  • Possibility to adjust VAT obligation if the acquirer of the goods and services without establishment, permanent or habitual residence in Croatia notifies the taxpayer in writing that a VAT refund hasn’t been requested.
  • Registration of international road passenger transport services is required before entering the Republic of Croatia.

2. Personal Income Tax

  • Increase of basic personal allowance from HRK 3,800 to HRK 4,000.
  • Reduction of personal income tax liability, up to an annual tax base of HRK 360,000 on the basis of employment, for which annual tax is paid at the rate of 24%:
    • 100% for young people up to the age of 25 years,
    • 50% for young people of age between 26 and 30 years.
  • Additional non-taxable payments such as awards to students for practical work and apprenticeships insurance and premiums which employers may pay for their employees based on additional and private health insurance.

3. Corporate Income Tax

  • New threshold – annual revenue of HRK 7.5m for:
    • the application of the 12% rate;
    • the entrepreneurs to choose to apply the cash principle in determining the tax base;
  • Implementation of certain ATAD rules such as exit taxation and hybrid mismatch.
  • The deadline for submitting a CPT return in case of bankruptcy and status changes is 30 days, for termination of business is 8 days.
  • Obligation to notify Tax authorities on certain actions leading to the termination of business, transfer of headquarters or in case of status changes – 30 days before starting.

4. DTT

The Double Tax Treaty (DTT) between Croatia and

  • Vietnam came into force on 23.05.2019.
  • Japan came into force on 05.09.2019.
  • Kazahstan came into force on 22.02.2019.

 

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Are you up-to-date with the current taxation of the Central and South Eastern region? Find out more in our recently published Investing in CEE / SEE 2020 Collection

Investing in CEE - TPA Update of tax systems in CEE/SEE

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