Croatia

Tax rates 2012 Croatia

Corporate tax

Rate

The standard corporate tax rate of Croatia is 20 %.

Taxation of dividends

Dividends are subject to a 12 % witholding tax. This does not apply if the rate is reduced or exempt due to an existing tax treaty.

Capital gains

Capital gains are taxed at the standard rate of 20 %.

Losses

Losses can be carried forward for a maximum of 5 years. Losses are not allowed to be carried backwards.

Withholding tax

Dividend paid to non-resident entity is taxed at 12 % unless a tax treaty is present, in which case the rate may be reduced or eliminated.

Interest paid to non-resident entity is taxed at 15 % unless a tax treaty is present, in which case the rate may be reduced or eliminated. Interest paid to entities in non-EU countries with an average corporate tax rate of less than 12,5 % are subject to a 20 % witholding tax rate, unless a tax treaty is present.

Royalties to non-residents corporations are subject to a 15% withholding tax. Royalties paid to entities in non-EU countries with an average corporate tax rate of less than 12,5 % are subject to a 20 % witholding tax rate, unless a tax treaty is present.

A 15 % witholding tax is levied on technical service fees such as tax consulting, business consulting, audit and market research. Technical service fees paid to entities in non-EU countries with an average corporate tax rate of less than 12,5 % are subject to a 20 % witholding tax rate, unless a tax treaty is present.

 

Individual tax

General

Residents are taxed on worldwide income. Non-residents are taxed only on Croatian-source income. To be considered resident one must have a permanent residence or habitual abode in Croatia.

Taxable income

Taxable income for an individual is considered to conclude income from employment, self-employment, propriety and property rights and capital income. Gross income is reduced by the employee´s pension contribution payments representing 20 % of gross income.

Rates

Tax rates are progressive. Rates vary between 12 % and 40 % depending on how high the gross income is.

Capital Gains

Capital gains are taxed at between 25 % and 40 % depending on the nature of the transaction. Property sales income is taxed at 25 % if property is alienated within 3 years of procurement.

Income derived from the sale of shares is not taxable.

Deductions

A personal allowance of HRK 2.200 per month is available for each individual. The deduction can be increased for additional family members.

Real Estate

The aquisition of a building is taxed at 5 % if the building was completed before 1 January 1998. Buildings concluded after that date are subject to VAT instead. Land is subject to a real estate transfer tax.

Net Worth Tax

There exist no net worth tax in Croatia.

Inheritance Tax

Inheritance tax is 5 % for movable property. The tax for immovable property is taxed according to the Real Estate Sales Tax Act.

Social Security

Employed individuals contributes 20 % of gross income to the social security. This amount is witheld by the employer. The individual´s employer contributes 15,2 % of gross salary to a health and employment contribution.

VAT

VAT applies to all sales of goods and services. The standard rate is 25 %. Reduced rates of 10 % and 0 % also occur.

 

Other

Tax year. Calendar year or any 12-month period approved by tax authorities.

Tax treaties. Croatia currently has 52 tax treaties.

Filing requirements. VAT payments and returns are due on the month following the VAT period in question. An annual VAT return must also be filed by the end of April each year.

Individuals must file an annual tax return by 28 February for the previosu year.

Registration (for VAT purpose). Registration is compulsory if the value of transactions exceeds HRK 85.000 (HRK 230.000 as of January 2013).

 

Links

Tax authorities. Croatian Tax Authorities

Consulate

Local Tax Resources

Chamber of commerce

(Online realtor/stock exchange)