Friday, 17 April 2020

HUP Calls for Taxation of Cross-Border E-Commerce

ZAGREB, April 17, 2020 - The Croatian Employers Association (HUP) has sent a proposal to the Finance Ministry to start taxing, in line with the relevant EU directive, cross-border online commerce and use the tax revenue to help the Croatian commercial sector, where, it says, more than 300,000 jobs are at risk directly or indirectly.

HUP claims that the growth on e-commerce during the current coronavirus pandemic has put domestic retailers in an unequal position in relation to foreign online retailers because a vast majority of them use a Croatian internet domain and create a false impression among Croatian buyers that they are buying in a Croatian store.

The bills do not show the amount of VAT, which means that VAT is actually paid in some other country, HUP says, calling for strict control and collection of taxes on cross-border shipments.

"Fair and transparent taxation of online trade is, just as the taxation of 'classic' trade, an opportunity for the state to earn more than a billion kuna from e-commerce tax alone. The biggest internet stores are registered in tax havens like Romania, the Czech Republic or Cyprus and it is solely due to omissions by our tax authority that they do not pay VAT in Croatia, which has one of the highest VAT rates in Europe," said Denis Čupić of HUP.

He proposed that revenue from e-commerce taxation be used to set up a fund to help in the recovery of the domestic retail sector, which, he says, is on the brink of bankruptcy due to restrictions imposed due to the coronavirus epidemic.

Čupić also calls for investigating cases of abuse in the customs-free shipment of parcels of small value to Croatia, noting that that way global e-giants place goods of higher value on the Croatian market, avoiding local taxes which are paid by everyone else in the national retail sector.

More business news can be found in the dedicated section.

Sunday, 5 April 2020

Croatian Companies Who Lay Off Staff Can Access Government Support

The Croatian Employers' Association's request is set to be granted by the Croatian Government early next week, and now even Croatian companies who have been forced to lay off staff during the ongoing and unprecedented coronavirus crisis will be allowed to access support from the government.

As Novac writes on the 5th of April, 2020, the Croatian Employers' Association (HUP) welcomes the announcement from the Ministry of Labour that at the CES Governing Council session on Monday, their request for all Croatian companies who were forced to lay off workers and/or close their companies to be able to access support will be granted.

The ability to seek financial support from the various economic measures recently presened by the government will be given to all Croatian companies who were forced to lay off workers and close down their operations before the entry into force of the measures passed by the Government of the Republic of Croatia in the face of the coronavirus crisis.

Last week, the Croatian Employers' Association addressed three ministries requesting that the second package of government measures, in the part related to job support grants, be made available to all small and micro enterprises who laid off workers because they didn't see any prospect for that in the first package of announced measures. Small and micro-enterprises, as the HUP has repeatedly emphasised, should then have been required to write off all payments, as mere delays were not sufficient to preserve jobs.

''As soon as the second package of measures was announced, the HUP requested understanding from the Croatian Government towards all micro and small enterprises, which were forced to lay off their workers due to discontinued operations or great difficulties. We're pleased that this move means returning workers to their jobs, restarting businesses and believing that this crisis can be overcome more quickly. This crisis teaches us how important it is to preserve our own production, develop and invest in our own knowledge and our own resources,'' stated Davor Majetić, CEO of the Croatian Employers' Association.

More detailed information on the use of government grants is expected early in the coming week following the end of the aforementioned session due to take place on Monday.

Follow our dedicated section for more on coronavirus in Croatia.

Monday, 30 March 2020

Employers' Association Demands New Measures to Save Croatian Economy

The Croatian Employers' Association (HUP) has demanded a new set of measures be implemented by the government to rescue the Croatian economy. They claim, among other things, that mere payment delays are far from enough.

As Novac writes on the 29th of March, 2020, HUP's chief executive Davor Majetic said: ''Continuing on from the GSV session held on Friday, the Croatian Employers' Association reiterates the need for the Government of the Republic of Croatia to urgently adopt new measures to save the Croatian economy on the principle of "zero income, zero expenditure,''

HUP, as he claims, has repeatedly "clearly and unambiguously stated to those in power and to the public what they have been demanding on behalf of businesses and employers", which is a write-off of all fees, contributions, para-fiscal levies, various redundant membership fees, and just not delays needing to pay those things.

''We're seeking that urgently! We can talk about delays during the ''post-corona'' period, not now when a large number of Croatian companies don't know if they will even exist next month,'' HUP stated, warning of the grave threat to the Croatian economy.

In addition, they said they expect a high level of accountability, fact-finding and argumentative debate from all stakeholders in social dialogue, and not merely the "cheap populism that is now appearing in the media by creating distorted personal impressions such as insinuating that HUP is seeking pay cuts for healthcare professionals and other falsities,''

HUP reiterated the measures that should take absolute priority and drew attention to the fact that they have created a whole series of measures and recommendations for all sectors of the economy and that they expect that politicisation will cease at this extremely difficult time for the Croatian economy.

''Immediate realisation and determination is what we need now. If we lose time, we lose the Croatian economy. If we lose the economy, we will lose the country,'' said Majetic.

Here is a list of everything that HUP is asking of the Croatian Government and what they have proposed so far:

1. On March the 3rd, we proposed to the Government a measure to preserve jobs, which would pay support on a part-time basis as a proportion of the amount of wages for the number of hours that a worker doesn't work

2. During business inactivity, employers cannot pay contributions and taxes with delay, the state must write off all of those fees

3. It is necessary to suspend the payment of all mandatory membership fees and charges for the duration of business inactivity and the suppression of coronavirus

4. It is necessary to write-off payments to LSGs

5. The total abolition of all other taxes and fees for concessions during the crisis needs to happen, not just delays

6. The reduction of the corporate income tax rate and the deferred payment of corporate income tax advances

7. The abolition of the payroll obligation/prescribed annual basis for directors

8. The obligation to pay VAT on paid realisation starting on March the 1st, 2020 for deliveries that followed after March the 1st, 2020 must be introduced

9. The suspension of foreclosures on tax payments during a state of emergency must be introduced

10. Credit reprogramming and refinancing must take place

11. The international flow of goods must be ensured

12. There must be a declaration of force majeure

13. A delay of deadlines for the submission of reports, forms and final accounts due to difficulties caused by the pandemic must be introduced

Make sure to follow our dedicated section for rolling information and updates in English on coronavirus in Croatia. Follow our business page for more on the Croatian economy.

Thursday, 26 March 2020

HUP Leader: Private Sector Will Again Bear Brunt of Crisis

ZAGREB, March 26, 2020 - The president of the Croatian Employers Association (HUP), Gordana Deranja, told Hina on Thursday that no one was to blame for the COVID-19 epidemic but that she was afraid that the private sector would again suffer the most.

"The situation is not pretty, we are plagued by uncertainty, the economy is in a difficult state and we do not have a clear vision of what will happen next. It is clear that neither the government nor any of us are to blame for the epidemic, but I am afraid that the private sector will once again pay the biggest price," Deranja said.

She added that in the economy everyone "is asking for write-offs, and not for deferral", since the situation was a catastrophe.

"HUP leadership regularly communicates with the government and ministries, it is in contact with its members, we have suggested a series of measures, and it is normal that the government does what it thinks should be done. Of course, we are not satisfied with the latest package of economic measures to help workers, entrepreneurs and the economy because we are asking for write-offs, not deferral," HUP president said.

She praised the national civil protection service and the healthcare system, as well as everyone taking care of the citizens' health and standing "on the front line of defence".

"None of us know if the crisis will last for a month or two or even longer. We do not know what tomorrow holds, but we do know that there are already many of those who cannot work, which means we do not have an income. If we do not have an income, we cannot pay people since we do not have a budget like the public sector, which we have been filling for years," Gordana Deranja said.

She said that this time the private sector stood together and would not let itself be completely destroyed.

"The economy is suffering all over Croatia. It is impossible to deliver materials, many demand advance payment, and orders have come to a halt. It is a disaster, it is nobody's fault, the whole world is in this together, but then we have to show solidarity, stay at home and respect the decisions. But then there we should also be eligible for write-offs and for exemption from tax and duty payments. Imagine, the Ministry of Tourism has generously relieved us of paying tourist board membership fees. Come on, what tourism are we talking about, this is ridiculous," Deranja said.

More coronavirus can be found in the Lifestyle section.

Saturday, 21 March 2020

Croatian Economy to Feel Fallout from Coronavirus Crisis Next Two Years

ZAGREB, March 20, 2020 - Director-general of the Croatian Employers' Association (HUP) Davor Majetić said on Friday that the economy would feel the consequences of the novel coronavirus for the next 1.5 to 2 years and perhaps even longer, adding that he expects the public sector to show solidarity with the private sector.

Commenting on the government's 63-measure rescue package, Majetić said that defining the criteria to hand out HRK 3,250 per employee marks the start of the first and most important measure that the government has adopted for now to bail out the economy.

That measure is exceptionally important for micro, small and medium-sized businesses and for large companies too that are having problems due to the coronavirus, Majetić believes.

"The measures will begin to be implemented as of Monday already and after that we hope that money will be paid into the accounts of all those employers experiencing problems with paying March wages because of the virus," he said.

Majetić added that it would no end with just that measure because it was certain that that would not be enough for all the challenges facing the economy.

"We are continuing with talks with the government primarily regarding the implementation of the remaining 62 measures which we expect to be very simple with smooth criteria whereby the speed of the implementation of each of those measures has to be important," he underscored.

More coronavirus news can be found in the Lifestyle section.

Wednesday, 19 February 2020

Croatian Project Wins Award from Croatian Employers' Association

As Lucija Spiljak/Poslovni Dnevnik writes on the 18th of February, 2020, graduates of the Zagreb High School, Filip Hercig, Matija Fucek and their team, were presented with the award for their Croatian project - Mundus Education System, for which they were awarded 25,000 kuna in a Croatian Employers' Association (HUP) competition called Entrepreneurs of the Future.

The award was presented to them by HUP representatives and by Ivan Gabric, a member of the A1 Croatia Board.

The Mundus Education System is a Croatian project and a smart board game by Mundus Technologies that brings technology closer to formal education through several hardware and software solutions, and is now used by about sixty schools across Slovenia and Croatia.

According to Hercig and Fucak, this recognition has put a spring in their step, and the generous donation has helped them to provide all the schools using the system with the necessary materials. The young innovators, who have worked on this Croatian project for several years, want to study in the US at Harvard or Stanford, and their general vision is, as they say, a blend of business and computer science. In parallel with their studies, they will continue to develop the game because, as they point out, this is their life project.

''This is a great opportunity to expand on the American market as well as in European Union (EU) countries. One segment of the game is educational and the other is for the private user market. The educational part focuses on educational institutions, from schools to kindergartens,'' explains Hercig.

"We wanted to do something new and interesting. We had a brief episode of development for the education sector that we dedicated ourselves to, and a growing number of people showed interest in the initial segment of the game. So, the idea is to make a board game that is actually a console; the board connects to a mobile phone via a mobile application (app) and then you choose the game you want. Furthermore, the idea is that you can download and try brand new games through the same physical board that you bought earlier,'' Fucek said, adding that the motto of the game is ''one board, countless games''.

Hercig and Fucek are pleased with the feedback they have received from students who are ''interested in learning the material in a non-classical way that professors can present to them through fun,'' says Hercig.

Ivan Gabric from A1 gave a lecture after he presented the award, telling the students that it is normal in life to try and sometimes not win, but that this should never discourage them.

"You're young and I want to encourage and support your ambition, which is often a cruel thing, and life is not as comfortable as it is during your high school days. You need knowledge to showcase your skills and strengths when compared to others, you can't pay for it, and that is proven every day,'' he concluded.

Make sure to follow our dedicated Made in Croatia page for more on this Croatian project and many more.

Sunday, 15 December 2019

Gordana Deranja Dismayed at Croatian Economy, Attitude to Shipbuilding

As Glas Istre/Mirjana Vermezovic Ivanovic writes on the 13th of December, 2019, it's common knowledge that the situation in the Croatian economy and production as a whole is not exactly great.

Croatia is right at the back, far from where it should be, and all experts warn of the need for restructuring and substantive reform, of which currently, there isn't even the letter "r". Croatia can hardly compensate for the rut it is stuck in with the current way it has of managing things, the biggest problems being high levies, tax and non-tax payments, parafiscal charges and a large and complicated, stagnant public administration.

Gordana Deranja, president of the board of Tehnomont and the Croatian Employers' Association (HUP), warned of all of the above at panel discussion held recently in the Istrian city of Pula. There, on the occasion of the 20th anniversary of the Istrian Development Agency (IDA), distinguished businessmen, professors and politicians debated the current state of the Croatian economy and where they see it by the time the year 2030 rolls around. Deranja noted that Croatian employers have nothing against public administration, but it must be in the context of the general government, in synergy with the private sector, and it must actually create added value.

Croatia also severely lacks manpower. Trade unions have rebelled against its import, saying it will ruin the price of labour and as we thought about it, the pool emptied: why would someone from Bosnia or Serbia come to Croatia when they can go to Germany, Deranja warned.

She cited corruption as the next problem for the Croatian economy, but she related it mainly to Zagreb. Speaking about Tehnomont's survival formula, she said that they were the first in all of Croatia to start manufacturing aluminum ships, and today they are the cheapest and most competitive in Europe. Speaking about the future, she stated that technology is changing very quickly, and Tehnomont is fortunate enough to be working in Germany, where all the information is readily available to it.

''Our market is small. It's amazing that the shipbuilding industry has not been recognised by the state, and other shipyards are working on our tenders. Jadrolinija is a state-owned company that could withdraw European Union funds and build ships instead of buying used ones in Singapore. State relations are also important, we should become a country with normal incomes. Instead of holding on to our hearts, we need to show that we care about people, and we employers will adapt to that. A good example is Istria County, where the businessmen actually listen. We'll be on a good path if we listen to each other, but if we don't jump onto the train of the 4th Industrial Revolution and Digitisation, we'll be left behind,'' Deranja said sharply.

Along with numerous representatives of local self-government units, Istria County, CCE and other institutions and guests from abroad, the discussion was also followed by IDS' honorary president Ivan Jakovčić. Party president and Pula Mayor Boris Miletić stated that the City of Pula is at a crossroads.

''After a hundred-year period marked by the military and joining NATO and the EU, traditions are changing. We can't be satisfied with our demographics, emigration and labour shortages, but when it comes to migration we're in a plus. Local self-government has the role of service, it must be efficient, serve citizens and the economy,'' said Pula's mayor. Despite Uljanik being in "the situation that it is," he sees the future of the city in the development of the IT sector.

Similarly, at the end of the discussion, other participants concluded - the future of the Croatian economy lies in adapting to new technologies. Deranja says Croatia also needs crafts and more education, citing the example of Germany that developed excellently in that sense. People are always an important factor, and Istria has proven that both industry and tourism can develop alongside one another.

Infobip's CEO Silvio Kutić spoke about the success of Infobip, which started in the IDA incubator. He sees the key to success in people, that is, the vision that connects them. Openness, teamwork and learning through academia are key to the success of that company that intends to be listed on the New York Stock Exchange in a few years. In the next five years, they plan to create a technological and scientific city in Vodnjan, where they plan to bring 400 experts from all over the world. But this is difficult because of poor response from city and state administration, Kutić said.

Boris Žgomba, director of the Uniline agency, who is also the head of the Croatian Association of Travel Agencies shared his opinion on the Croatian economy and what could yet come to be.

''Today, we can't know what will be in ten years. People's habits and technological solutions will change. People from some areas we can't even imagine will end up coming here. The technologically advanced “Z” generation makes decisions in seconds. That guest knows more than you do. In the next ten years, there will be a revolution, big changes, and time will tell if we're ready or not,'' said Žgomba.

Prof. dr. sc. Lorena Mošnja Škare, Vice-Rector of Juraj Dobrila University, said that the institution would do everything it could to encourage its students behave in an entrepreneurial and innovative way, by stepping into the STEM field, to prepare experts for the 4th Industrial Revolution.

Make sure to follow our dedicated business page for more on the Croatian economy.

Thursday, 5 December 2019

HUP Hosts Gathering of European Employers' Associations

ZAGREB, December 5, 2019 - The Croatian Employers' Association (HUP) is hosting a two-day conference of representatives of 40 employers' associations from 35 European countries, which started in Zagreb on Thursday, HUP said in a press release.

The gathering of "CoPres - Council of Presidents" has gathered 100 delegates, business people and executives of employers' associations who arrived in Zagreb for discussions on topics important for Europe's economy and trade relations with other economic powers, including the USA and China.

The gathering is taking place in the capital city of Croatia, the next chair of the European Union.

HUP is thus hosting representatives of BusinessEurope, including the president of this Brussels-headquartered organisation, Pierre Gattaz.

BusinessEurope introduces itself as "the leading advocate for growth and competitiveness at European level, standing up for companies across the continent and campaigning on the issues that most influence their performance." It also says that its speaks "for all-sized enterprises in 35 European countries whose national business federations are our direct members."

HUP joined this organisation in 1994.

HUP President Gordana Deranja was quoted as saying in the press release that HUP has over 6,000 members - small and medium sized enterprises and big companies - which employ over a half million workers in Croatia and account for over 70% of revenues in the private sector.

More business news can be found in the dedicated section.

Monday, 23 September 2019

HUP Leader Gordana Deranja Elected Vice President of BusinessEurope

ZAGREB, September 23, 2019 - President of the Croatian Employers' Association (HUP) Gordana Deranja has been elected vice president of BusinessEurope, one of the largest independent employers' associations in Europe that advocates the interest of employers in the European Parliament, the Council of the European Union and the European Commission, HUP informed on Monday.

BusinessEurope, a European social partner, advocates the interests of small, medium-sized and large companies in 35 European countries.

Deranja's term as vice president of the association will last until 30 June 2021.

Deranja was quoted in the HUP's press release as saying that it is a great honour to be recognised as the person for that responsible position and that she will not betray the trust she is enjoying.

"As president of the Croatian Employers' Association, it is my duty to strongly and clearly articulate the interest of Croatian employers and to fight for their rights and a better business climate in the country, which is something I have been doing all these years with satisfaction and I am glad that now I will have the opportunity at the European level to be engaged even more strongly on those issues and in that way impact on stronger recognition of Croatia's business community in the world," she said.

HUP is a member of several reputable international organisations including BusinessEurope, the International Organisation of Employers (IOE), the European Association of Crafts and Small and Medium-Sized Enterprises (SMEUnited), UN Global Compact and 12 other European industrial associations.

More Business news can be found in the dedicated section.

Monday, 15 July 2019

HUP Calls for Defining ICT as Strategic Industry

ZAGREB, July 15, 2019 - The Information and Communications Technology (ICT) Division of the Croatian Employers' Association (HUP) says that ICT should be defined as a strategic industry and that specific incentive measures should be taken to retain its specialists in the country and boost the sector's competitiveness.

Presenting their demands to the government in the form of "five small measures" and an analysis of the ICT sector over the past ten years, the association's representatives told a press conference earlier this week that it was highly important for Croatia to keep its digital talent and professionals in the country in the next ten years.

HUP director-general Davor Majetić said that the global economy was digitised and that therefore the results and status of the ICT industry were even more important.

"What 20 years ago was computerisation, with only a few computers in companies, is now digitisation, and in order for it to become a reality, a strong ICT sector is needed. That's why this industry is also very important for all other sectors," Majetić said.

He said that in Croatia last year the ICT industry had started the largest number of companies, generated the highest revenues, created the greatest added value and paid the largest amount of taxes and contributions per employee into the state budget, slightly over 4,400 kuna (600 euro), while contributions from other industries ranged from 1,000 kuna (135 euro) to 2,500 kuna (337 euro) per employee.

He went on to say that last year ICT was the second largest exporter after the metal industry and the second largest employer after the food industry, and that in the last ten years it had observed the large increase in employment as personnel costs had risen by 70 percent, from 3.8 billion kuna (513 million euro) in 2008 to 6.5 billion kuna (878 million euro) in 2018.

The head of the HUP's ICT Division, Boris Drilo, presented growth estimates for the industry until 2025, according to which the ICT sector could have 55,000 employees by then, of whom 28,000 in computer programming, while revenues could reach 45 billion kuna (6 billion euro), of which 12 billion kuna (1.6 billion euro) or 23 percent would account for exports.

More IT news can be found in the Business section.

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