Byzantine Regulations Killing Croatian Businesses

By , 19 Mar 2017, 16:05 PM Business

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Due to regulations, taxes and business rules which change daily, many entrepreneurs decide to shut down their businesses.

“Madam, if you had tall bar stools with accompanying tables in your pastry shop, then you would not have to have a toilet for your guests.” When Tatjana Rebec, an owner of the La Dolce Vita pastry shop in Velika Gorica, heard that from an inspector who had visited her a few months ago, she was stunned. “Guests who sit on tall stools do not need to go to toilet?” she asked the inspector. The answer she got was that such guests stay for only a limited time, so there was no need for toilet. On the other hand, establishments with low tables and chairs must have separate male and female toilets, reports on March 19, 2017.

Rebec said that it is difficult to monitor business regulations which change constantly. “Just in the area of ​​the tax rules there have been more than 40 changes in the last three years, which means that every month they amend one tax legislation”, reported the Association of Small and Medium Enterprises. “You cannot change rules in the middle of a game, and very often it happens that an entrepreneur starts a business, and then the rules change. Many eventually give up, and there are many who end up in losses”, said the Association, adding that, for example, an entrepreneur which fails to report an employee one day before they start working can be fined up to 30,000. “We support the registration of employees, but what happens when an employer has no time to report an employee a day before”, asked the Association, adding as an example a company which paid a penalty because they hired a waitress one day before she was originally supposed to start working.

According to the Croatian Chamber of Crafts and Trades, five years ago there were more than 87,000 active entrepreneurs in its sector. Now, there are 11,000 fewer of them. “Entrepreneurs are burdened with a number of taxes, operating costs are high, inspections are too strict, and there is a lot of shadow economy”, said the Chamber.

Entrepreneur Saša Cvetojević said that major problem was avoidance of responsibility among those who should help entrepreneurs. “No one is responsible for anything. For example, an entrepreneur seeking information related to the storage of goods contacts the responsible ministry and asks for information. They send him to one of the agencies, and the agency then sends them to another agency. While trying to find a solution to the problem, they already get a penalty which must be paid”, said Cvetojević.

“It sounds great when someone tells you that you will get subsidies from the state if you hire people registered as unemployed with the Croatian Employment Service, but few know that these incentives are given only after such a worker has been working for you for a year”, said an owner of a small business. The problem is that there might be legitimate reasons why some employees have to be fired before the incentives are paid. “Some workers come drunk or simply do not show up. And what can you do? But, if you do it before the first year is up, there are no incentives”, he said.

Croatian Employers Association says there are about 8,200 active laws in Croatia, accompanied by many more regulations and their amendments. “All in all, we come to a figure of about 20,000 regulations which are in effect”, said the Association.

Ivan Milković, owner of a pancake shop in Zagreb, said that he found himself in problems when he replaced parasols with nice umbrellas in the open area of his shop. “I had to go to a city commission. It is absurd that the appearance of my shop was decided by an architect, a physician and a war veteran. They told me that a veteran must always be included”, said Milković.

Here are just some of the examples of business and other regulations in effect in Croatia:

A pastry chef in a pastry shop is not allowed to taste the cake which he has prepared, because it is strictly forbidden and punishable. He should first issue a receipt for the piece of the cake, pay it, and then eat it outside of the kitchen.

For a drill which can be bought for 150 kuna, a construction company must obtain a test certificate which costs much more than the drill itself. In addition, the certificate must be renewed each year.

Passenger cars register by companies must have a fire extinguisher. Same cars registers by individuals do not have that obligation.

People who do not feed animals or give them enough water to drink can get up to six months in prison. However, for domestic violence, the penalty is just three months in jail.

When a new calf is born, a farmer has to pay income tax. When they sell meat from the same animal, they again pay taxes to the state.

Owner of a jewelry shop says that she has to keep records of working hours and wages in two hardcopies, although she has it all stored in a computer as well.

If a cash register does not have a label that says that the invoice must be issued and that the customer has to take it, businesses face a large penalty.

Transport company has to pay TV license fee for each truck it owns. The same has to be paid by a baker for a small kiosk in which he sells his baked products.

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  • Due to a traffic accident traffic is flowing alternatly on the DC8 Adriatic road at the place Klanfari, Dramalj area. Due to another one it is proceeding with delays at 319th km of the A1 motorway at Šibenik junction in direction Zagreb. Due to strong wind the driving speed has to be reduced on the A1 motorway from Gospić junction to Sveti Rok tunnel (to 100 km/h) as well as on the A6 Rijeka-Zagreb motorway from Kikovica to Tuhobić tunnel, from Tuhobić tunnel to Ravna Gora junction. During the day difficulties can be expected in roadwork areas - on the A1 motorway after Lučko paytoll at 6th km in direction Rijeka/Split (there is a 1,5-km-long traffic jam). Drivers are invited to keep distance and to adjust the speed to road conditions. With the bad weather the headlights have to be on during the day as well. One lane is free only/traffic is flowing in reduced lanes on the following motorways:-A1 in Plasina tunnel in both directions; -A2 Zagreb-Macelj between Zaprešić and Zabok junctions 20th-18th km in both directions; -A3 Bregana-Lipovac between Kutina and Novska junctions 119th-120th km in both directions; -A6 Rijeka-Zagreb at Svilno viaduct 78th-80th km between Orehovica and Čavle junctions in each direction till 1 June; -A8 in Istria on the section Lupoglav-Učka tunnel. Roadworks on the A4 Zagreb-Goričan motorway (Zagreb detour road): - till 9 June traffic is suspended in the entrance lane of Kraljevečki Novaki from direction Sesvete and Dugo Selo towards Ivanja Reka junction, there is a local detour; in the roadwork area traffic is flowing in reduced lanes; - till 26 April traffic is suspended in the exit lane of Popovec junction from direction Goričan towards Popovec, detour for direction Vrbovec-Popovec: Sveta Helena junction (A4)-Sveta Helena-DC3 Goričica-Belovar-Žerjavinec-Soblinec-Popovec junction, for direction Goričan (A4)-Sveta Helena: Komin junction (A4)-DC3-Sveti Ivan Zelina-Donja Zelina-Žerjavinec-Soblinec-Popovec. Lepenica rest area (at 57th km) on the A6 Rijeka-Zagreb motorway is closed till 15 June, the previous rest area and petrol station is the one Ravna Gora (at 30th km), the next one Cernik-Čavle (17,8 km away from Lepenica). Due to roadworks traffic is suspended: -on the DC1 state road in Lučko and Stupnik (Zagreb); -on the DC8 Adriatic road at Posedarje; -on the DC6 state road, section Glina-Dvor border crossing, detour: Glina (DC37)-Petrinja-Hrvatska Kostajnica-Dvor. Traffic is regulated by traffic signals/one road lane is free only:-on the DC1 state road in Knin until 14 July; -on the DC1 state road at Klinča Sela, Tušilović and Mostanje; -on the DC1 Sinj-Klis Grlo state road at Dicmo; -on the DC8 Adriatic road on the section Kaštel Stari-Kaštel Gomilica, at Podstrana, on the section Zaton Doli-Bistrina, at Srebreno; -on the DC66 Pula-Most Raša state road; -on the DC75 Poreč detour road, section Vrvari-Bijela; -on the DC62 Veliki Prolog-Metković state road at Most Metković.
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  • During the day difficulties can be expected at the border crossings with Slovenia, Bosnia and Herzegovina and Hungary due to traffic density and occasional additional controls. Freight traffic is heavy at:-Bregana (1,5 hours) and Pasjak (an hour) in the outbound direction, -Bajakovo (3 hours), Tovarnik (3 hours) and Erdut (30 minutes) in the inbound direction. In the inbound bus traffic there is the waiting time of 30 minutes at Klek and Zaton Doli. In the outbound passenger traffic there are delays up to 30 minutes. Due to roadworks at Županja and Slavonski Brod border crossings delays can be expected. At Harmica border crossing traffic is allowed for vehicles up to 7,5 tonnes only.
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  • The following ferries, catamarans and boats do not operate due to strong wind: -Lopar-Valbiska ferry, -Mali Lošinj-Rijeka, Rijeka-Rab-Novalja, Ubli-Vela Luka-Hvar-Split, Korčula-Hvar-Split, Vis-Split and Zadar-Rivanj-Sestrunj-Zverinac-Božava-Brbinj catamarans, -Mali Lošinj-Unije-Susak boat. Šibenik-Kaprije-Žirje ferry does not stop at Kaprije port.
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