Verified Facts
The tax rates in Croatia range from 12% to 40% for personal income tax, with a corporate tax rate of 12% and a standard VAT rate of 25%.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
Croatia has a territorial taxation system, meaning that individuals are taxed on their income earned within the country, regardless of their residency status. However, individuals who are considered tax residents in Croatia are also subject to tax on their worldwide income. To be considered a tax resident in Croatia, an individual must have a permanent home in the country, or spend more than 183 days in the country within a calendar year. Tax residents are required to file an annual tax return and report all their income, regardless of where it was earned.
The tax authority in Croatia is the Tax Administration, which is responsible for collecting taxes, enforcing tax laws, and providing tax guidance to individuals and businesses. The Tax Administration has a network of offices throughout the country, and taxpayers can also access tax information and file tax returns online. Croatia has a well-developed tax system, with a range of taxes including income tax, corporate tax, VAT, and capital gains tax.
Personal Income Tax
| Income Bracket (EUR) | Tax Rate |
|---|---|
| 0 - 21,000 | 12% |
| 21,001 - 30,000 | 25% |
| 30,001 - 45,000 | 30% |
| 45,001 - 90,000 | 35% |
| 90,001 and above | 40% |
| Personal income tax in Croatia is progressive, with higher income earners paying a higher tax rate. Taxpayers are also entitled to various deductions and allowances, including a basic allowance of around EUR 3,800, and deductions for mortgage interest, charitable donations, and education expenses. Tax returns must be filed by June 30th of each year, and taxpayers can file online or through a tax agent. |
Corporate & Business Tax
- The corporate tax rate in Croatia is 12%, which is one of the lowest in the European Union.
- Small businesses with an annual turnover of less than EUR 400,000 may be eligible for a reduced corporate tax rate of 10%.
- Croatia has a number of free zones, which offer tax incentives and other benefits to businesses that operate within them.
- Businesses must register with the Tax Administration and obtain a tax identification number before commencing operations.
- Companies are required to file an annual tax return and pay corporate tax by March 31st of each year.
VAT / Sales Tax
- The standard VAT rate in Croatia is 25%, which applies to most goods and services.
- A reduced VAT rate of 13% applies to certain goods and services, including food, books, and pharmaceuticals.
- A super-reduced VAT rate of 5% applies to certain basic necessities, including bread, milk, and eggs.
- Tourists may be eligible for a VAT refund on certain purchases, including souvenirs and other goods.
For Expats & Foreign Workers
- Expats and foreign workers are considered tax residents in Croatia if they spend more than 183 days in the country within a calendar year.
- Tax residents are subject to tax on their worldwide income, including income earned outside of Croatia.
- Croatia has a network of double taxation treaties with over 60 countries, which can help to reduce or eliminate double taxation.
- Expats and foreign workers may be eligible for a tax exemption on certain types of income, including foreign-earned income.
- Social security contributions are also payable by expats and foreign workers, and these contributions may be eligible for a refund when the individual leaves the country.
- Remittances of income earned in Croatia are subject to tax, and taxpayers must declare these remittances on their tax return.
Crypto & Investment Income
- Investment income, including dividends and interest, is subject to tax in Croatia.
- Capital gains tax is payable on the sale of certain assets, including real estate and securities.
- Cryptocurrency is considered a form of investment income, and gains from the sale of cryptocurrency are subject to tax.
- Taxpayers must declare their investment income and capital gains on their tax return, and pay tax on these amounts by June 30th of each year.
- The tax authority in Croatia has issued guidance on the taxation of cryptocurrency, and taxpayers can access this guidance on the Tax Administration's website.