Tax info

In Croatia, the profit tax rate is 20%. Tax after deductions is paid at the rate of 15% for interests paid to foreign legal entities and for copyrights and other intellectual property rights, for market research services, tax and audit services and services of any business counseling paid to foreign individuals. As of 2005, the tax on dividends after deduction, paid at the rate of 15%, has been cancelled.

Income tax rates are progressive and range from 15 % to 45%.

Property traffic is charged at the tax rate of 5% for acquisition of the existing property and at the rate of 22% for acquisition of the newly constructed structures. Property traffic tax shall be paid by the Buyer of the related property.

VAT rate

Value Added Tax shall be paid at a rate of 23%.

Other Value Added Tax rates are 0% and 10% and are related to the following:

1. Value Added Tax shall be paid at a rate of 0%:

   • all kinds of baked bread

   • all kinds of milk

   • books with contents that are professional, scientific, artistic, cultural and education, textbooks for elementary, secondary and tertiary education, printed on paper or other media for text including CD ROM, video cassette and audio cassette

   • medicines determined by the Decision to determine the List of Medicines of the Croatian Institute for Health Insurance

   • products that are surgically implanted into the human body – implants (heart valves, pacemakers, artificial joints, material for osteosynthesis, stents, IUDs and so on) and other medical products for making good physical impairment or shortcoming as defined in the Orthopaedic and Other Aids Manual Regulations of the Croatian Institute for Health Insurance

   • scientific and scholarly journalsthe services

   • public screening of films.

2. Value Added Tax shall be paid at a rate of 10%:

   • services of accommodation or accommodation with breakfast, full or half board in all kinds of commercial hospitality facilities and on services of agency commission for these services

   • Daily and periodic newspapers and magazines with the exception of those that, in their entirety or mainly, contain advertisements or serve for advertising purposes.

Croatia has signed contracts on avoiding double taxation with 43 countries:
Albania, Austria, Belgium, Belarus, Bosnia and Herzegovina, Bulgaria, Czech republic, Chile, Denmark, Estonia, Finland, France, Greece, Italy, Ireland, Jordan, Yugoslavia, South African Republic, Canada, China, Korea, Latvia, Lithuania, Hungary, Macedonia, Malta, Mauritius, Moldova, the Netherlands, Germany, Norway, Poland, Romania, Russia, San Marino, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, Great Britain.

Legal entities submit their tax reports to the Tax Office branch according to their respective seats. All necessary information can be found on the Internet page: www.pu.mfin.hr/. The VAT form can also be submitted online (e-PDV).

What is VAT?

e-PDV replaces paper version of the tax report submitted to the tax official and enables all tax payers to submit monthly, quarterly or annual submission of tax reports online. The service is available on www.pu.mfin.hr/e-porezna/ePDV.asp.

Source: www.apiu.hr