Tuesday, 27 July 2021

Tax Relief Proposals by Hospitality Sector Reps not Accepted

ZAGREB, 27 July, 2021 - Finance Minister Zdravko Marić on Tuesday did not accept proposals for a lower VAT rate on beverages and to treat labour costs as a tax deduction, while a representative of restaurant and bar owners said they would have to fend for themselves the best way they can regarding future challenges.

"My message to all restaurant and bar owners in the country, notably those who run bars, is that a very demanding period is ahead of us and that they will have to seek new loans and funding, despite the fact that we had yet another constructive meeting with the finance minister today. We can hope that in a couple of years we will have better working conditions because now that is not the case and we have not come across any understanding in regard to our proposals," Jelena Tabak, who heads the NUU association of restaurateurs, said after the meeting.

Marić recalled that a lower VAT rate was already in place in the tourism sector for accommodation, food and for the serving of food and that beverages were the only products for which VAT had not been reduced.

Commenting on the proposal to exclude labour costs from the base amount for the calculation of the VAT rate in the hospitality sector, the minister said that neither Croatia's nor the EU's tax systems recognised such a measure.

"In terms of taxation, labour costs are indeed recognised costs but in systems in which they should be recognised - the income and profit tax systems. We cannot mix direct taxes with indirect taxes such as VAT," he explained.

Marić recalled the government's measures to help the business sector, from lower taxes to the cancellation of individual contributions, as well as expanding the scope of nontaxable income, which, he said, had resulted in a rise in employment and wages, as evidenced by statistical data.

He recalled the government's job-keeping measures and coverage of fixed costs in the hospitality sector, stressing that data on fiscalisation showed that the hospitality sector had solid results and that the real peak of the tourist season was yet to come.

Dražen Biljan of the bar owners' association of the NUU Zagreb branch said that they were not happy that their proposals were not accepted and that lowering VAT on drinks would not cost the state too much, around HRK 400 million. It would, however, mean a lot for restaurant and bar owners, he said.

For more about politics in Croatia, follow TCN's dedicated page.

Thursday, 10 June 2021

Tax Relief Enables Tourism Sector Businesses to Have €15.8m at Their Disposal

ZAGREB, 10 June 2021 - The Croatian ministry of tourism and sport has adopted three ordinances about the reduced tax burden and tax exemption, which would enable businesses in the tourist trade to have 118 million more kuna at their disposal.

The changed regulations about the exemption from payment of some of the accommodation surcharge lump sum and membership fees for the local tourist boards were published in the Official Gazette on Thursday.

Minister Nikolina Brnjac says in a press release that she is sure that this tax relief in the amount of 118 million kuna "will definitely facilitate the efforts of hotels, campsites, private accommodation renters, family farms, and nautical tourism companies to do business more easily" and also help them to alleviate the impact of the COVID-19 pandemic.

(€1 = HRK 7.5)

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