Monday, 13 February 2023

Croatian Tax Refund Details - Who Will Get The Most Money Paid Back?

February the 13th, 2023 - Who is set to get the most paid back to them via the Croatian tax refund? More details on who can expect what have now been published by the Tax Administration (Porezna uprava).

As Poslovni Dnevnik writes, tax returns can be submitted via the ePorezna (eTax) system, the mPorezna mobile application (app), by using an internet banking token or any NIAS minimum level three application credential, or to the competent branch of the Tax Administration according to your registered place of residence.

It's important to note that the Income Tax Act stipulates that persons in employment (not those who are self-employed) who are up to 25 years old are completely exempt from paying income tax entirely. In other words, all the tax and surcharges paid by them will be returned to them through a tax refund. Employed persons between the ages of 26 and 30 are also exempt from paying 50 percent of this tax and half of the paid amount will also be returned to them, according to

Who will get half back and who is set to get a 100% Croatian tax refund?

This is the regulation that has been valid as of the year 2020, and for 2022, according to it, people up to the age of 30 will receive the highest Croatian tax refund of all. It should also be noted that this regulation doesn't apply to students who are employed through a student contract through the student service.

"According to the regulations on income tax, natural persons up to the age of 30 who earned a salary during 2022 will, as they did back during the previous year, have a reduced amount in the annual calculation of the tax liability calculated on part of the tax base up to 360,000.00 kuna (47,780,28 euros). Individuals born in the period from 1992 to 1996 have the right to a reduction of their tax liability for the annual income tax calculation for 2022 by 50 percent, while individuals born in 1997 and later have the right to a reduction of their tax liability by 100 percent,'' the Tax Administration explained.

The Tax Administration also stated that, if persons are not obliged to submit an annual tax return (DOH Form), the right to a refund of overpaid tax during the year 2022 will be determined by the Tax Administration ex officio by a decision in a special procedure without the obligation to submit the ZPP-DOH Form.

In the event that they're also liable for submitting the annual tax return, they will exercise their right to a refund through the submitted annual tax return. Persons liable to submit an annual tax return (DOH Form) are natural persons who, during 2022, earned income from self-employment and activities on the basis of which the income will be determined and taxed as income from self-employment on the basis of business books (e.g. trade activities, etc.) and taxpayers/residents for income from self-employment that, according to a special law, they earned as crew members of a ship in international navigation, regardless of the number of days they spent on the ship in international navigation, as explained by the Tax Administration.

They estimate that a similar number of people will receive a Croatian tax refund under this regulation as last year - approximately 153,000 people, in the total amount of around 91 million euros. They also revealed when these people can roughly expect the returned funds to show up in their bank accounts.

"It's expected that the majority of refunds according to the annual income tax calculation for 2022 will be made by the end of May 2023. Croatian tax refunds will be issued to those taxpayers who meet the conditions for a refund, continuously according to the order in which the decisions will be issued," says the Tax Administration's response to

You can calculate the approximate amount that will be returned to you...

There's an informative calculator on the Tax Administration's website, which you can use to calculate how much your Croatian tax refund will be, as well as the surcharge you can expect on your bank account. You can access the calculator by clicking here.

When using the form, you first need to enter the year for which you want to calculate the return, i.e. 2022. Then, in the drop-down menu, you select the age group you belonged to in 2022, and then enter your salary information. Gross receipts paid, contributions paid, annual personal deductions, income tax and surtax paid, and the surtax rate according to the place where you live are requested - all this is on an annual basis. By clicking on the icon which says ''Annual calculation of taxes and surcharges'', you will get to the return calculation, which, it should be emphasised, is of an informative nature only.

For more, make sure to check out our dedicated news section.

Monday, 28 March 2022

Croats Providing Free Accommodation to Ukraine Refugees Must Pay Tax

March the 28th, 2022 - Remember that old saying about the only two certain things in life being death and taxes? Croatian residents and property owners providing free accommodation to Ukraine refugees escaping war following the Russian invasion of their country must still pay tax despite their good (and free) deed.

As Poslovni Dnevnik writes, Croatian residents who own property and who are receiving Ukraine refugees in their apartments and houses will still have to pay taxes despite making their offer free. The fact is that private landlords in Croatia must sign a lease agreement with Ukrainian refugees who they want to provide a home for in their house or apartment, and tax must be paid on that, even if the rent agreement is signed at zero kuna, the Tax Administration said, Slobodna Dalmacija reports.

According to the Income Tax Act, if the rental amount is reported below the market price - which includes free rent - then the Tax Administration determines the rental price according to the standard rental prices for the place where the property is located. It is a legal mechanism used to avoid an agreed reduction in the rental price between the private landlord and the tenant.

If it weren't set out as such, the two parties could agree to write 10 kuna below the value of the rent on the lease agreement, even though it is actually 200 euros per month, and as such, the landlord would pay less tax (and Lord knows, we can't possibly have that, can we?!).

"These are the rules for now and we can't change that, but it will probably be regulated differently once the announced aid package from the European Union (EU) is approved,'' they explained from the Tax Administration when commenting on this situation which some believe is punishing them for a good deed.

According to the latest data, 9,660 displaced Ukraine refugees have entered the Republic of Croatia so far, most of them being women and children, as Ukrainian men below a certain age typically stay and fight.

Most of these Ukraine refugees are accommodated in private accommodation, ie in apartments provided by Croatian residents. This figure totals 8322 people, ie approximately more than 2000 families. There are 23 of them in reception accommodation, and 1255 in collective accommodation.

For more on the Ukraine crisis and what Croatia is doing to help displaced persons, check out our politics section.

Monday, 7 March 2022

Foreign Income: How it Affects Croatian Workers Abroad

March 7, 2022 - The Croatian Tax Administration (TA) announced recently that it will collect income tax on all Croatian workers abroad if they do not file a tax return themselves. 

The TA sent an invitation to Croatian citizens resident in Croatia, to voluntarily report foreign income, given that it was noticed that a number of citizens did not fulfil this obligation. The TA’s announcement, originally published on their website in December, read: “Citizens resident in the Republic of Croatia who have earned foreign income (eg. salaries, pensions, other income, interest on savings, dividends, etc.) in this year or previous years are called to, but have not yet reported them to the Tax Administration to do so before receiving an official invitation”.

The supposed reason behind this is the number of Croatian residents leaving the country for work opportunities abroad. The 2021 Census saw a decline in Croatian inhabitants from 4.3 to 3.9 million. “If we compare the data with the final results of the 2011 census, we see that the population decreased by 9.25 percent, or 396,360 inhabitants,” as stated by Lidija Brkovic, director of the Central Bureau of Statistics. The issue lies within Croats working abroad who are still considered residents of Croatia, who have not applied beforehand to be eliminated from the Croatia Register of Taxpayers. 

The TA pointed out that it is obligatory to declare foreign income in Croatia, regardless of whether the tax has already been paid abroad and regardless of whether there will be an obligation to pay tax in Croatia. And for all those who remained residents of Croatia even though they left Croatia to work in other countries, they may be facing a taxation liability calculated in the difference in income tax paid abroad in relation to the tax liability they would pay on that income in Croatia. This calculation includes not only salaries and pensions, but also interest on savings, capital investments, real estate rentals, and even investments in cryptocurrencies. 

Croatian citizens abroad who have “written themselves off” from the Croatian Tax Register and become tax residents of another country no longer have Croatian tax obligations. For those who have moved abroad to work but who have remained Croatian tax residents, obligations vary depending on which country they moved to, where taxation rates of salaries and pensions differ. In countries such as Germany, Sweden, Estonia, Latvia, Lithuania, Norway, Belgium, and Canada, the method of exemption from income tax liability to Croatia applies when it comes to pensions and salaries, i.e. income from non-self-employment work, due to the reciprocal arrangements between countries. Whereas in countries such as Argentina, Australia, New Zealand, South Africa, and the USA, there is no such exemption due to no reciprocal agreements arranged between countries, meaning Croatian tax residents are required to submit details of their income to the TA and are therefore subject to taxation.

For instance, if a Croatian citizen moves to Germany and deregisters their residence from Croatia, working in Germany most of the year and coming to Croatia for holidays, they pay all their taxes in Germany. Or in my case, a Croatian resident moving to the UK to study, returning to my family residence in Croatia during the holidays but legally living and working in the UK the remainder of the year. Prior to moving, I had to deregister myself from my residence, applying for temporary leave from Croatia that can be applied for a duration of up to 5 years. In the UK, all income up to £12,500 is called Personal Allowance and as such is not taxable. Most students' income falls under that threshold and we do not need to pay any tax to HMRC (UK tax governing body).

It is an idea worth considering for anyone leaving Croatia for work abroad to deregister their residence not only at the Ministry of Interior (MUP) but also from the tax office. There are a number of qualifying factors one must fulfil, which can be found at this link.

I can't help but think that this move by the Croatian TA may have further negative effects on the country’s demographics. As a result, more Croatians could simply choose the option of further severing their ties with Croatia. A worrying trend in a decreasing population! 

For more, check out our lifestyle section.

Wednesday, 20 October 2021

Value of Croatian Fiscalised Receipts Exceeds Pre-Pandemic 2019 by 9%

October the 20th, 2021 - Croatian fiscalised receipts and their amounts have provided much more than a mere glimmer of hope following an uncertain and difficult economic period, with the values exceeding that of pre-pandemic, record 2019.

As Poslovni Dnevnik writes, the total value of Croatian fiscalised receipts last week exceeded four billion kuna (4.1), which improved the amount from the same period last year by 22 percent or 743.7 million kuna. Data from the Tax Administration also shows that in the period from the 11th to the 17th of October, when compared to the same week back in 2020, the number of Croatian fiscalised receipts (43.6 million) was 18 percent higher.

In the trade sector, the total amount of Croatian fiscalised receipts issued last week amounted to 2.8 billion kuna, while in catering and tourism, ie accommodation and food preparation and service activities, receipts with a 66 percent higher value were issued, reaching an impressive 365 million kuna last week.

If we compare last week's situation with that from the pre-crisis year of 2019, known as being a record one, fewer actual receipts were issued, but their value increased. In particular, there were 4 percent fewer fiscalised receipts issued and a nine percent increase in their value.

A cumulative review of fiscalisation for the period from February the 22nd to October the 17th this year compared to last year (from the period of February the 4th to October the 18th, shows that in 2021, the number of issued receipts grew by 24 percent and in value by 27 percent.

"Across all economic activities, a total of 1.5 billion Croatian fiscalised receipts were issued, in the total amount of 143.8 billion kuna, which increases the value of those receipts by 30.4 billion kuna annually," reads the analysis of the Tax Administration.

In the wholesale and retail trade, the repair of motor vehicles and motorcycles, the number of receipts issued in the period from February the 22nd to October the 17th, 2021 compared to February the 25th to October the 20th, 2019 saw one percent fewer invoices, but their value increased by six percent.

The hospitality and tourism sector, on the other hand, recorded 30 percent less receipts issued as well as a six percent lower amount of these receipts when compared to the pre-pandemic year of 2019, according to a cumulative review of fiscalisation.

For more, follow our business section.

Wednesday, 7 July 2021

Very Slow but Sure Recovery for Croatian Private Accommodation Sector

July the 7th, 2021 - The Croatian private accommodation sector is slowly but surely recovering from the horrific blow the ongoing coronavirus pandemic and the travel restrictions dealt it. That being said, there's an extremely long way to go yet.

As Poslovni Dnevnik/Jadranka Dozan writes, among the many economic indicators that signal a solid pace of economic recovery, the most recent picture is provided by the weekly updates of fiscalisation data.

The latest data from the Tax Administration claims that last week, the value of receipts issued across all activities within the fiscalisation system stood at 19 percent higher than in the same week last year, two percent behind the comparable week of pre-pandemic 2019.

The latest figures clearly reflect the approach of the peak tourist season. Namely, in the week of the transition from June to July this year, 54 percent more receipts were reported in the tourism and hospitality industry than were reported last year. As such, when it comes to these activities, 804 million kuna of weekly turnover was reported through fiscalisation, but compared to pre-crisis 2019, that figure is still 15 percent less.

In order to get a better picture of the impact of the pandemic, the Tax Administration also offers comparisons of fiscalised turnover for the period since last year's outbreak in Croatia.

They point out that from the end of February to the end of last week, the total fiscalised turnover was 22 percent or 12 billion kuna higher than it was back during the same period last year, and two percent lower than the year before.

However, while in trade the pre-trial traffic was exceeded by four percent, in tourism and catering, the value of receipts issued in the observed more than four months is still lower by about 40 percent.

What do things look like in terms of the recovery of fiscalised turnover when we look more closely at individual activities at the level of the first half of the year?

For example, in the first six months of 2021, 1.74 billion kuna in cash turnover was recorded by the Croatian private accommodation sector (which, in addition to payments with banknotes, includes cards, cheques, etc) which is 700 million kuna more than last year, but quite far from 3.32 billion kuna from the first half of 2019. Cafes and restaurants issued invoices worth 3.75 billion kuna in the first half of the year, which has not yet caught up with 2020's realisation with slightly less than 4 billion kuna in fiscalised turnover, and the gap in relation to the semi-annual turnover from pre-pandemic 2019 stands at more than 2.9 billion kuna in total.

Among the activities that are still well behind the pre-crisis levels of activity is the category of Arts, Entertainment and Recreation, in which, after last year's 250 million kuna, the value of issued receipts recovered a litte, reaching 313 million kuna, but it is still 38 percent less than the 502 million kuna recorded in the comparable period of the last pre-crisis year of 2019.

The same applies to activities in the category of Transport and storage. After the growing cycle in 2019 resulted in more than 1.3 billion kuna in annual fiscalised turnover, last year, enterprises from these activities reported less than 770 million kuna, and the beginning of recovery this year was reflected in an increase in the value of invoices issued to 843 million kuna. Entrepreneurial niches related to tourism and travel generally fared worse than others, which shouldn't come as a particular surprise to most.

According to the NCEA, a part of these enterprises is classified in Administrative and support service activities in which fiscalised turnover is still more than half lower than in the pre-pandemic area. In the first half of the year, they reported less than 290 million kuna, or slightly less than last year's 300 kuna, while the year before, 884 million kuna in turnover was fiscalised in these activities.

For more, make sure to follow our dedicated business section.

Sunday, 20 December 2020

Vecernji List: HRK 15.5bn in Time-Barred Tax Debt Written Off Since 2017

ZAGREB, Dec 20, 2020 - A total of HRK 15.5 billion in tax debt, including HRK 6.8 billion on account of principal and HRK 8.7 billion on account of interest, owed by 346,570 taxpayers, has been written off since 2017 because the debt became time-barred, the Vecernji List daily wrote on Sunday.

The fact that a large part of the written-off debt is on account of interest shows that these are debts for which the Tax Administration kept data in tax records but for which it was not possible to enforce debt collection due to lack of assets, it was said in response to the daily's question. The daily had asked the Tax Administration for data on the total number of time-barred tax debts, the amount that had been written off because of that, and whether there was a need for any normative or organisational intervention in the tax system.

The data submitted is from 2017 because as of 1 January that year an important systemic change has been in force. Since then the statute of limitations for the right to collect taxes has been monitored ex officio, so taxpayers no longer have to submit a request.

Any tax debt that was not collected after six years, through the taxpayer's application or a decision of the tax authority, is written off from tax records.

As of 2017, if a tax debt has not been collected using all available enforcement proceedings during six years or if the debt is not secured by a pledge or mortgage, the tax authority is obliged to write off the time-barred debt from tax records.

Based on this, the Tax Administration conducts a systemic debt write-off once a year for debts that fall under the statute of limitations on 1 January that year.

Friday, 24 April 2020

Coronavirus in Croatia: Latest Tax Administration Report Cause for Concern

The Croatian economy, much like the global economy, has been forced to grind to a halt owing to the ongoing coronavirus pandemic. In a time when Croatia, known for its seasonality in terms of employment, would be gearing up for the summer season and employers would be seeking out waiters, chefs, bar staff and more, the unemployment rate is only increasing.

For the Croatian economy, of which the strongest branch which makes up around 20 percent of GDP is tourism, coronavirus threatens absolutely devastating economic consequences. The trade sector, which is also of enormous importance, both in the sense of its connection to tourism and independently of it, is also suffering huge losses.

As Jadranka Dozan/Poslovni Dnevnik writes on the 24th of April, 2020, the latest report from the Tax Administration shows that there has been an enormous drop of six billion kuna in all activities since the beginning of April 2020 thanks to the coronavirus pandemic and the numerous economic restrictions that have been introduced in order to try to flatten the infection curve.

In all activities which go through the fiscal system, the number of invoices issued fell by as much as 52 percent last week in the retail and wholesale/trade sector, according to the latest data from the Tax Administration.

This is a significantly higher decline than in the second week of April (when it was 34 percent in total and 24 percent in trade), the reason being that this year, Easter, ie the pre-festivity spending period, took place a week earlier.

A more realistic picture of the recent decline has been given by the first three weeks of April 2020. As touched on above, from the latest tax report, it can be been seen that in all activities since the beginning of April, there has been a huge six billion kuna drop, which is 44 percent or 4.58 billion kuna less than in the first twenty days of April 2019.

Over the past three weeks, trade turnover was 36 percent or 2.68 billion kuna lower than in the comparable period last year. Thus, in the first three weeks of April 2019, close to one billion kuna (956 million kuna to be precise) was fiscalised, and in the twenty days of April this year, only 91.5 million kuna has been fiscalised, a massive 91.5 percent less than last year.

For more on business, follow this page. For all you need to know about coronavirus in relation to Croatia, follow our dedicated section.