Tax and Customs Systems

Tax System
Tax treatment of residents and non-residents is equal. Taxation of non-residents is conducted respecting double taxation avoidance contracts which Croatia has signed with 52 countries.

Basic tax types in Croatian taxation system:

Corporate income tax (Profit tax)

20%

Corporate income tax by withholding (except for dividends and profit shares 12%, 20% on all services that are paid to persons or companies who have headquarters or control of operations in countries other than EU member states, in which the general or average nominal profit taxation rate is lower than 12.5%, and the country is published in the list of states issued by the Minister of Finance)

15%

Capital income tax (above 12.000 HRK per year)

12%

Income tax

12-40%

Value added tax (exemption of 5% on certain categories products and 13% on tourism and catering services)

25%

Real estate transfer tax

Tax System

Reduction of the tax base for reinvested profit under the following conditions:

The profit or share of profit of taxation period( for which application is filed) is used for increase in Equity
Increase in equity in the amount of reinvested profit is submitted in Court registry, in accordance with special regulations
Profit is not earned in banking or nonbanking financial sector.

Income tax withholding is not paid if the compensation is paid as income attributed to domestic business unit of foreign entrepreneur.

Foreign owners of the equity will be charged a withholding tax on dividends and shares in profit at rate of 12%. Foreign EU recipients of dividends will not pay tax on dividends in case they own at least 10% in equity for a continuous period of 24 months (applicable after EU accession).

Real estate transfer tax is not paid when founder and member of organization brings in real estates in the Organization as founding investment or as increase in equity (in accordance with provisions of the Companies Act). This Tax is also not paid in case when real estate is obtained in a procedure for the merger or in cases of acquisition or separation of companies (in accordance with provisions of the Companies Act).

More information about the Croatian taxation system can be found on the web pages of the Tax Administration.

Custom Systems

By the accession of the Republic of Croatia to the European Union, the area of the Republic of Croatia became a part of a single customs territory of the Union. The entry into a single customs territory of the EU means that, as of July 1st, 2013, all customs control over entry of goods or trade between Croatia and the other Member States is abolished. Trade between domestic goods between persons in different Member States is not considered as imports and is not a subject to customs procedures and supervision.

Dealing with foreign goods imported from countries outside the EU is regulated by the provisions of the Act on Customs Regulations of the European Union (NN 54/2013). Subjects to customs supervision are the goods for which the EU customs regulations prescribe customs supervision. Goods are subject to customs supervision from the time of their entry, and the same should require a customs-approved treatment or use of goods. Customs-approved treatment or use of goods requires the submission of a customs declaration for the customs procedure or use of goods.

More information about the customs system can be found in the website of the Customs Administration.