Thursday, 17 February 2022

Bus Operators Seek Lower VAT On Their Services

ZAGREB, 17 Feb 2022 - Bus operators at the Croatian Employers' Association on Thursday voiced regret that the government's scheme designed to alleviate the impact of rising energy prices did not include the passenger transport sector, asking to be included in the scheme and for a lower VAT on their services.

The bus operators warned that they had been affected by rising energy prices as well as by the negative impact of the coronavirus pandemic on group travel.

"The government scheme has reduced VAT on gas, food, agricultural products and sporting and cultural events, but not on passenger transport. The VAT rate on passenger transport in Croatia is among the highest in Europe, and in addition to paying some of the highest fuel prices, due to the highest VAT rate, Croatian citizens do not have access to a much cheaper transport alternative," they said.

Their president Hrvoje Meštrović said that many European countries had a lower VAT rate on passenger transport also before the pandemic and energy price hikes.

He noted that countries comparable to Croatia, like Slovenia, Hungary and Austria, as well as a vast majority of other EU countries, all had lower VAT rates of below 10% on public passenger transport because they recognised its importance.

For more, check out our business section.

Monday, 14 February 2022

Institutions Treat Croats Working Abroad Harshly, MP Bartulica Says

14 February, 2022 - The opposition Homeland Movement's whip said on Monday the taxation of Croatian residents who work abroad "discloses the institutions' harsh treatment of their own citizens."

"When the state wants to be efficient, as in this case, things are handled quickly, but when citizens depend on public administration, for example in (post-earthquake) reconstruction, the state is absent," Stephen Bartulica told the press.

He said many Croatians abroad had been calling him these days to complain about the Tax Administration.

"Enough of such oppression of one's own people! They have done nothing wrong. Many of them pay taxes in the states they are in and now Croatia, because the rates here are somewhat higher, wants to collect the difference."

Bartulica said Croatia's policy offered incentives to expats to come back, while on the other hand the Tax Administration's policy was forcing some people to even consider giving up their Croatian citizenship.

Those people didn't leave Croatia to avoid paying taxes but to survive economically, he said, adding that the ruling HDZ party should reduce the influence of politics on people's lives. "Then perhaps... those people might come back."

Bartulica did not rule out that some citizens might be evading taxes and using health insurance in Croatia despite living abroad but reiterated that they left because of the situation in Croatia, the state was partially responsible for them leaving.

He also said the state was very late in presenting measures to reduce the inflationary blow to citizens, and that one of the reasons for the current inflation was the green revolution.

Bartulica would not say if he supported the Bridge party's interpellation on the government's work on consumer protection due to energy price hikes.

Friday, 12 November 2021

Nearly 8 in 10 Croats in Favour of Taxing Products That Contribute to Global Warming

ZAGREB, 12 Nov 2021  -  As many as 64% of respondents in Croatia support stricter government measures that will make people change their behaviour in an attempt to overcome climate crisis, according to a survey conducted by the European Investment Bank (EIB) in cooperation with the BVA pollster.

The opinion polls show that 64% of the respondents in Croatia are in favour of "strict government measures imposing changes on people’s behaviour to fight climate change," while 70% of EU citizens and 73% of Britons are also in favour of such measures.

Furthermore, 78% of Croatians welcome the adoption of a tax on products and services that contribute most to global warming, according to the results of the fourth EIB Climate Survey conducted among more than 30,000 respondents in 30 countries from 26 August to 22 September this year.

In Croatia, three quarters of the respondents believe that climate change and its consequences are the biggest challenge in this century. Also, 85% believe they are more concerned about the climate emergency than their government.

Furthermore, 84% of the Croatians believe that climate change affects their everyday lives, and 81% are in favour of using renewable energy to help overcome the climate emergency, as against the EU average of 63%.

For more news, CLICK HERE.

Friday, 16 July 2021

Davor Nađi Interview: "Fokus Party Not for American-style Economy, Dutch or Scandinavian Preferred"

July 16, 2021 - One month after the local elections in Croatia, the liberal/center Fokus party president shares with TCN reflections of his Zagreb mayor candidacy, details on political views, plans, and hope for the future of Croatia. Learn more about the Fokus party in an exclusive Davor Nađi interview conducted by TCN reporter Ivor Kruljac.

2021 local elections for Croatia concluded back in June, and as with every local election, the majority of political parties whose candidates earned some new positions in the local governments managed to taste both victories and losses are overall happy. Some parties from both left and right political wings celebrated as scientists whose work won the Nobel prize. Even election losses were interpreted as victories, drawing attention to the number of votes, that although they may not score political roles, show growing support. If there is a once in four years occasion when political parties have as much optimism as the Croatian Adriatic has drops of water, it’s the local elections. 

Currently in parliamentary opposition, Davor Nađi, president of the Fokus political party, politically declared as center-oriented, also doesn't hide his optimism following the result, but it seems he is a bit more toned down in that excitement than some of his political competitors. Satisfied to see his colleagues from the party keeping their previous positions, and some even selected for new ones, he is expecting the Fokus party to grow in the future while remaining aware of Fokus being new and young on the scene - is careful to say more than he can bargain for. Nađi ran for Zagreb mayor, but in the end, didn't manage to win neither the "main prize" nor a seat in the Zagreb Assembly. He noted, however, that his candidacy helped to attract new Fokus members in Zagreb, but again stating it without grandiose announcements, rather with mild optimism, careful not to step out of the line of realism. 

In an e-mail interview, Nađi commented what happened in the Zagreb elections, did NGOs stepped out of line in supporting current mayor Tomislav Tomašević, and what do Fokus voters find attractive in the political party best known for reforming the town of Sveta Nedelja. Are they American-styles libertarians as described by some, and what European politicians are in line with Fokus’s ideas, are just some of the things Nađi revealed in the interview.  


screenshot / N1

You are the president of the Fokus party, and candidates from your party had won in Sv. Nedelja, Samobor, Sv. Ivan Zelina and Dugo Selo. So, your party currently has four mayors. Can you list for our readers where your party had candidates for mayors, assemblies, and counties? How do you comment on „your mayor's" first-month post-election, and what moves would you point out as excellent in that time?

Except for these four cities, we also won in the municipalities of Križ and Pirovac. We ran for mayors and local and regional assemblies mostly in central Croatia (Zagreb and Zagreb county) but also in Čakovec, Slatina, Petrinja, Pirovac. We won 50 members of local and regional assemblies, including the president of assembly in Čakovec.

Most of our mayors were reelected, so they just continued working on projects. However, I would like to point out our new mayor of the city of Samobor, Petra Škrobot, who already contracted procurement of software for transparency of city budget and public procurement, which is one of the flagship policies of the Fokus party.

How would you briefly explain to our readers what your party represents and advocates politically? What politicians, foreign or Croatians are your role models, and why?

We represent the fight for lower taxes and fewer regulations for citizens and the private sector and for a more efficient public sector. That means that we want that people and companies can keep more of the money they earn for themselves and decide on what they want to spend it. For example, that is the only correct way to solve the housing problem – to make sure that people earn and keep more money. Further on, that means that the private sector gets better value for money through better service of the public sector where, in our vision, worst or/and unnecessary public servants would be let go, and the best workers would get a financial reward. We also talk and act on investments in infrastructure, which is important for preparing for future climate change challenges.

I can’t say I have some role models in politics, but I like the politics of Dutch PM regarding the economy because they have a small and efficient public sector that provides good service to their citizens. That allows them to keep their economy very competitive, which results in a better life for their people.

You express deep care for private investments, lowering taxes, and overall creating a better environment for private business and entrepreneurship. But, when talking about entrepreneurs in Croatia, people roll their eyes as many of our famous „entrepreneurs“ are associated with crime, corruption ties to politics, and unfair privatization that ended up in many people losing their job. What is your opinion on these entrepreneurs, such as Todorić or Horvatinčić? How to fix that negative perception of entrepreneurs?

Yes, the private sector is very important to us. We care about entrepreneurs but also about their employees. We also care about the best public servants too. 

I think that public opinion on entrepreneurs is changing in a good way because of a new generation of successful entrepreneurs that succeeded in the global market with no connections to the government. Todorić and Horvatinčić are the exact opposite of them and represent everything that is wrong with this country. It’s wrong to call them entrepreneurs because they are a product of crony capitalism. The only cure to fight people like them is an independent and efficient judiciary.    

New option for liberals in Croatia 

You ran for mayor in Zagreb. The polls didn't give you too much of a chance, but libertarian (classical liberal) oriented site said that you could be „the biggest surprise of the Zagreb elections“. To tell you the truth, it didn't seem likely you will become a mayor, but I was very surprised you didn't win a seat in the assembly. What went wrong in Zagreb, and how is it possible that the city with the most developed business climate and entrepreneurship (and with a lot of entrepreneurs) didn't reward your entrepreneurship-oriented ideas, at least with the seat in the assembly?

Well, Fokus is a new party, and I’m relatively new in politics, so a lot of people weren’t informed about our program and achievements. Fokus party didn’t exist in Zagreb until this year, while other parties were building their organization for many years, so it was hard to catch up in just a few months period during a partial lockdown. However, even though we didn’t win a seat in the assembly, we achieved some other goals. Now we have a lot of new members, and a strong organization in Zagreb and a lot of people have heard about FOKUS for the first time. Further on, we are the strongest liberal party in Zagreb, and we had better results than a lot of old traditional parties. So I believe that in the future, our support will only grow in Zagreb.


Davor Nađi during his campaign in Zagreb © Davor Nađi

You said on your Facebook site that you didn't receive enough media attention, and indeed you weren't invited to the debates (with the explanation being that only those who earned 5% in polls will be invited). However, you had banners and posters across Zagreb where you talked about how you are experienced to be a mayor because of Sveta Nedelja, where you were a deputy mayor, and the town did receive media attention few years back for amazing changes introduced there. What was your contribution to the transparency of public servants, lowering taxes, and canceling the subtax in Sveta Nedelja as deputy mayor? 

I was the designer of those policies with the strong support of mayor Zurovec and the city council, and I was working on these policies from the beginning until the implementation. I’m very proud of that because Sveta Nedelja did the biggest tax cut in Croatia, became the most transparent city in Croatia, and received a reward for the best local economy three years in a row.   

You criticized some of the moves by the new Zagreb mayor Tomislav Tomašević. Can you repeat what do you find problematic in his governance so far, but also, is there anything positive, something you would support him in if you made it to the Zagreb assembly?

There are some things that are good, and some are not. I reacted on one occasion, but let's wait a little bit more time before I can comment general impression so far.

However, for our readers who are foreign and didn't have the chance to see your comment in Croatian, can you briefly explain what did you found problematic with Tomašević early on to the point that you had to react publicly?

He stopped most of the public procurement. Even though I understand his concern that there might be corruption problems, that is not the way to solve that problem. That problem should be solved with better process and clear guidance from the mayor to the city administration because if public procurement is stopped for too long, there will be problems for citizens. On the other hand, in a short period of time new mayor will not be able to change much if he doesn’t make the process of public procurement more transparent and efficient. 

Far from the US philosophy

 Once on N1, you said political parties in Croatia are still pretty socialistic. Since on that occasion you were a guest at N1 regarding Zagreb Reconstruction Bill, did you mean they were socialistic just in that regard or in general? Are Croatians also socialistic too?

They are socialistic in general, and that bill was just the latest example. That orientation of political parties in Croatia resulted in a situation in which an enormous part of the economy depends on the state so we actually have crony capitalism. That sends the wrong message to the people, so people lose self-confidence and think they can’t earn for themselves and their families, and instead, they rely on the state to help them in every aspect of their life. They simply don’t take into account the fact that the state is corrupt and inefficient, which may be because of inadequate financial literacy.

However, it seems to me that the tide is changing with the lead from the local level from cites like Sveta Nedelja and that people are beginning to see the benefits of liberal policies.

When you say the parties are socialistic, some could think this is the heritage of Yugoslavia. However, aside from the communist experiences of South-Eastern Europe, the overall European political culture and tradition goes along the way „yes to democracy, yes to free market, yes to the individual freedoms“ but also „yes to social care, yes to free health, yes to free education, yes to supporting cultural and artistic projects, scientific research, etc“. Many people see Fokus as being against that and wanting to dismantle that European political culture with American political culture, which seems to be notorious in Europe for its health and education system, which as people see it, „is alright if you have cash, but not for the poor“. Are you indeed into „making Croatia American rather than European?“ and if so, how would you address the mentioned sectors of health, education, culture, and science? What about HRT in that context (as the idea of a public TV financed by the state is a European invention in the media landscape)?

Of course, we are not for an American-style economy. We prefer the Dutch or Scandinavian style with high economic freedom and adequate social benefits. Some people don’t understand that “free” health care doesn’t exist. Taxpayers pay for that. And if we think a little bit more about our health care system, do we really have health care that is accessible to the poor? How long are the waiting lists? People pay taxes for health care, and when they need it, then they don’t get it. That is not free health care! Almost the same is for everything else. I believe that vouchers would solve that problem because then even poor people could afford health care service from the private sector, and the public health care system would have to be more efficient and provide better value for money. The same thing is possible with education. HRT should be significantly downsized, and subscriptions decreased with the option to opt-out from their service.

When it comes to the overall Croatian political landscape, Fokus does offer something truly different from other political options, and it seems quite right to expect that Fokus will continue to grow. But, what do you think made Fokus uprise to start in central Croatia, in Sveta Nedelja, Samobor, Dugo Selo, and Sv. Ivan Zelina? Is there something that makes the culture and society in these areas different comparing to the rest of Croatia that they were the first to recognize and give a chance to your program?

Fokus also has a mayor of Pirovac in Dalmatia and president of the city council in Čakovec, members of City council in Slatina, etc, so I wouldn’t say that our policies are only recognized in central Croatia. However, we have better support in parts of Croatia, where fewer people work in the public sector and more in the private sector. That is not surprising since we promote policies that would result in a more efficient public sector and less red tape and taxation for the private sector. 

 Davor_during_his_campaing_in_Zagreb.jpg© Davor Nađi

 Up next: European elections and Croatian Parliament 

On the note of local success, many view local elections as a forecast for what can happen in parliamentary elections. How would you rate your chances on the next parliament elections based on local results?

I’m very optimistic. Fokus has a very good position to grow and to achieve a great result. Fokus is already a success story and we have grown in a number of members in every part of Croatia. I believe that a new government after elections will not be formed without a strong party or coalition from the political center, and if we look at the results of local elections, Fokus is the fourth party by a number of mayors in Croatia. Also, we are the strongest party of the political center in national ratings, so that gives us reason to believe that we can gain even more support from our citizens in the future.

 Back to the Zagreb elections. The two main candidates represented Gree-left values and national, conservative, sovereign values. Tomašević not only got support from some of the other European mayors but, just as with Škoro's values, there are plenty of same-minded people in Europe sharing those values. You mentioned your appreciation for the Dutch Prime Minister, but are you as well in contact with like-minded parties and politicians in the EU?  

Fokus is a new party, so we still haven’t formed significant international alliances, but we can see ourselves working with other European liberal parties. Of course, the one with the best results is Dutch VVD that is in power on the state level. 

But when we talk about the support that Tomašević or some right-wing parties and NGOs in Croatia had in recent years from abroad; I would say that there is a thin line between support and meddling into elections, and I would say that that line was crossed.

But, can we expect that Fokus will try to be in communication with them? Any plans for running on European Parliament elections as a good point to meet with other think-alike politicians in the EU?

I said that we don't have some significant alliances with them. However, we are in contact with some of them. We will see where that will take us. EP elections could be the first opportunity to test eventual cooperation.

And regarding what you said about there being a thin line between support and meddling in elections and how that line was crossed in Zagreb elections by NGOs, is there a risk of entrepreneurs doing the same thing when supporting, either financially or with public influence, certain parties? How can we prevent such meddling legally but yet with respect to the right of political expression to organizations and individuals?

I don’t see the financial support of Croatian entrepreneurs to political parties as a problem. The problem is only if they receive privileged treatment after the election in return for giving financial support. I would go one step further and say that we should welcome donations of private individuals and companies to political parties because that would mean that political parties would be less dependant on public financing. That should be a normal part of the domestic election process. However, if foreign money is included in financing political parties or their leaders, direct or through other channels, then we as a state have a problem.

To conclude, you are MA of the economy, and you talk a lot about economic solutions. Are our economy and business truly the core issues politicians need to address? Additionally, what are your views and the views of Fokus on defense policy, diplomacy, international relations, emigration policy (asylum seekers trying to enter Croatia), Croatian veterans, diaspora, and the ideological, historical disputes among Croatians, which for better or worse seem to often resolve the elections on a parliamentary level?

It would take a much longer conversation to answer all these questions, but I will try to answer in few sentences. Yes, I believe that economy is the most important issue that needs to be addressed because that is the place where value is created and which provides a better life for people and necessary funding for all government programs. Without a strong economy, the state can’t finance defense or social benefits. Unfortunately, you are right that elections are, in the biggest part, decided on other issues that target emotions rather than reason. 

When it comes to defense policies, liberals believe that the basic tasks of the state are to provide to their citizen's rule of law and protection from foreign and domestic threats. So we should have adequate defense capabilities. On the other hand, we have no problem financing social benefits to real war veterans, however almost 30 years after the war, there shouldn’t be any new users of these benefits. Regarding international relations, our position is that Croatia should remain an EU and NATO member with strong relationships with the USA and with a clear position that China can’t be our partner until they don’t behave by the same rules like everyone else with the biggest concern regarding human rights issues.

Even though we are a small country, that doesn’t mean we can’t lead by example. It is up to us if we will stay on the bottom of every European statistic table or we will start going up. We have all the resources we need to thrive.

Learn more about Croatian politics and history since 1990 on our TC page.

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

Wednesday, 8 July 2020

FinMin Says Lower Taxes Don't Guarantee Higher Net Wages

ZAGREB, July 8, 2020 - Finance Minister Zdravko Maric said on Wednesday that tax cuts were not a guarantee of higher net wages but that efforts would be made to make that happen because of the idea behind tax cuts was higher wages and higher employment and investments.

Answering reporters' questions outside the government offices about the government's plans to reduce income tax rates from 36% to 30% and from 24% to 20%, Maric recalled that the HDZ party's platform envisaged certain tax changes, adding that the party stood behind that and that they would be an integral part of the government's programme as well.

He said that the government would continue with tax reliefs, but not this year since major legislative changes regarding the taxation system always took effect with the start of a calendar year.

Maric noted that lower taxes were not a guarantee that net wages would grow because that depended on employers, and in that context, he recalled that not everyone had lowered prices when the VAT rate was reduced.

"I will always do what is within my power but we cannot force anyone to do it," Maric said, adding that he expected the media to help create pressure so that lower taxes materialise as higher net wages.

He noted that around 1.8 million taxpayers, more than a half, were not subject to income tax so any change in that segment did not refer to them.

He added that the situation with the state budget was "not great" and that after four years of balanced budgets this year would see a rather large deficit, which, he noted, had been compensated for to a large extent with financing activities on the domestic and international markets.

"The situation is under control but challenges still lie ahead," said Maric, noting that the coronavirus crisis did not have to be only a problem and challenge but rather an opportunity to learn lessons and take steps that would put Croatia back on the right track, to be followed by higher growth rates.

Tuesday, 9 April 2019

Veljko Ostojić: Only Lowering Taxes Can Save Croatia

As Novac/Veljko Ostojic writes on the 8th of April, 2019, after almost a decade of high growth rates in Croatia's domestic tourism indicators, the dominant feature of this season, at least from the market's point of view, is uncertainty. The only thing we can be sure of, however, is the rapid growth period behind us. Facing Croatia is a period of struggle for each tourist owing to extremely turbulent broadcasting markets.

Such a destiny is shared by all Mediterranean markets with the exception of Turkey, and tourism in the Mediterranean as a whole is influenced by two dominant trends.

The first concerns the general insecurity in the European Union's economy, driven by the slowdown in individual national economies, primarily in big players such as Germany and Italy. An additional element that generates general uncertainty is the potential of Brexit (should it ever happen at all), the real effects of which at this stage can't really be estimated. These movements deter people from spending too much money, which is felt by the lack of bookings and reservations. In the first two months of 2019, the annual cumulative booking from Germany to Croatia was a little less when compared to 2018, while the decline in British tourist reservations throughout the Mediterranean was much more apparent, with Brits booking their holidays in the sun in advance being 10 percent lower on average than last year.

The second trend is the return of an old tourism king, Turkey, which has been a source of discomfort and nerves for Western Mediterranean countries, especially Spain, especially with its policy of subsidised travel arrangements last season, this season, Turkey is set to continue to record high growth rates of reservations from key European emission markets.

Such is an environment that defines the prospects of Croatian tourism not only this year, but over the next few years. The Croatian Tourism Association decided to quantify the effects of these trends on the expectations of Croatian tourist companies and the results of that survey were published in the first issue of Tourism Impulse, which will be published continuously every quarter. They surveyed the fifteen of Croatia's largest tourism companies, which account for 81 percent of the country's hotel sector.

The survey has shown that Croatian travel companies are experiencing revenue declines on one hand, and rising costs, primarily regarding labour, on the other. Croatian tourist companies are expecting slower annual revenue growth by 11.4 percent when compared to last year. Without changing the business environment in which Croatian tourism operates, this will result in a reduction in profitability and of course, a reduction in investment potential. With Croatia's damning reputation among foreign investors on the world stage, this really is the last thing it needs to seek to encourage.

The rather damp expectations of some of Croatia's largest tourist companies also show a drop in profitability this year by almost five percent and, as a consequence, the reduction of investments this year by a concerning twenty percent. Over the next two years, a further decline in investment is expected at a rate of 33 percent when compared to the periods in 2018 and 2019.

Reducing investment potential in tourism has a significant impact on the long-term prospects of Croatia's tourism. It is clear to all that in the long-term, Croatia must compete exclusively with quality rather than price. Reducing prices as much as possible to compete with Turkey on a surface level will only destroy the Croatian coast and Croatia's tourism sector as a whole. This isn't an option.

To be able to really compete with quality, apart from having determination to do so, it is crucial to attract and stimulate investments, something Croatia lacks in, and rather severely.

For that, Croatia will have to make numerous significant changes to its business framework. Today, Croatia is one of the least competitive in investing in tourism in the entire Mediterranean and has the highest tax burden of them all, especially if we look at the VAT rate. Spain, France and Italy have a reduced their VAT rates to help boost tourism. Croatias VAT rate, however, is 13 percent for hotel accommodation and 25 percent for hospitality services. Only Denmark is operating anywhere close to that in the whole of Europe, and one can hardly compare Croatia to Denmark.

Tourism directly and indirectly generates nearly twenty percent of Croatia's GDP, the sector generated eleven percent of all investments in Croatia. There is a lot of discussion about the optimal structure of the economy in which tourism makes up such a big part of it, and this, like many such discussions in Croatia, is often a waste of time. In a situation where tourism is experiencing significant growth rates and becoming an increasingly important factor in the receptive Mediterranean market, such discussions are quite unnecessary.

Of course, the priority requirement for Croatia's tourism growth is to boost investment, which will continually increase the country's overall quality.

If VAT on the entire tourist service is reduced to the level of Croatia's competitive countries, tourism can attract an additional three billion euros of investment, it can increase employee salaries by twenty percent and continue to rise over the next few years, which will further stabilise budget revenues and raise the standard life in Croatia in general.

Make sure to follow our dedicated business, lifestyle and travel pages for much more.

Saturday, 26 January 2019

Croatian Finance Ministry Announces Tax Changes for Freelancers

As Poslovni Dnevnik writes on the 26th of January, 2019, the low rate of taxation and the simplistic way of ''doing the books'' has apparently led to a large increase in people setting up obrts and freelancing in Croatia. Minister Zdravko Marić announced that the Croatian Finance Ministry will "consider this segment in particular and see how it will be treated in the future".

Judging by the discussions that took place at the 2nd Tax Conference, the next round of tax changes could be concentrated primarily on obrt owners and other freelancers, with the possibility of further lowering the tax burden on wages.

Minister of Finance Zdravko Marić announced that the Croatian Finance Ministry intends to alter a few things for Croatia's numerous freelancers, but didn't really specify in what direction those changes will go and when these changes will happen. It is to be expected, however, that the Croatian Finance Ministry will prepare the changes during the course of this year, according to a report from

At the Taxation Conference, organised by the Faculty of Economics in Zagreb and Deloitte, and was attended by representatives of the scientific and business community, representatives of the Croatian Finance Ministry and the Tax Administration, Minister Marić reported on the effects of the previous changes in the Croatian tax system.

Minister Marić reported that about 150,000 taxpayers in Croatia are paying tax on their earnings.

He said there are about 35,000 j.d.o.o's, 106,000 registered self-employed businesses, including 37,000 obrt owners. When it comes to private renters who pay a flat tax, there are about 95,000.

Commenting on the rapid growth in the number of obrts paying taxes on a flat-rate basis, Minister Marić said that the Croatian Finance Ministry has made a big step forward and simplified the management of the books, but that "this segment needs to be considered and it should be seen how things will look in the future."

Marić's announcement came after the introduction made by Hrvoje Šimović from the Faculty of Economics in Zagreb, who said that the growth of those paying flat tax now looks good, especially because of encouraging levels of those who are self-employed.

"But in the future, obrts will prove to be the biggest problem in regard to the tax aspect. The potential for abuse will increase due to taxpayers' efforts to make sure their net income remains as much as possible,'' said Šimović.

Minister Marić emphasised that the Croatian tax system needs to be fully understood and that the essence of tax reform is to make the system simpler, more predictable and consistent, offering a better sense of understanding and security for everyone.

"We're doing the same for all taxpayers. It's not true that we're only good for those who pay a lot of tax, and that we're purposely trying to make it more difficult for those who pay less. It's precisely in the segment of small and medium-sized entrepreneurs that the biggest reform has been made in the first round of [tax] reforms. The profit tax rate has dropped from 20 to 18 percent, or 12 percent for companies with up to three million kuna of revenue. A lot has been facilitated,'' Marić noted.

He stressed that he remains a big advocate for tax cuts.

Follow our dedicated politics and business pages for much more.

Friday, 28 December 2018

SPAR Croatia Reducing Prices of Many Products on January 1st 2019

An announcement from one well-frequented store, SPAR Croatia, will likely bring a smile to the faces of many, as prices are set to be slashed next month.

The Christmas spirit might be warm and fuzzy in stark contrast to the cold winter weather, but the consequences of eating, drinking and being merry (along with the need to buy more and more expensive presents), often leave our wallets feeling much thinner even if we've definitely grown, and I don't mean upwards.

Thankfully, January is a quiet, although boring month. Not much happens and for very many, it is the month of trying to earn back at least a portion of what was spent when under the soft yet somewhat deceptive blanket of December's glittery Christmas cheer. 

As Poslovni Dnevnik writes on the 27th of December, 2018, SPAR Croatia has issued a very welcome announcement which guarantees that as of the 1st of January, 2019, the prices of more than 1,500 products that can be found on the popular shop's shelves will be reduced by more than 9.6 percent.

SPAR Croatia will lower its product prices according to the Croatian Government's decision to reduce VAT on fresh meat, fish, fruit, vegetables, eggs, and baby diapers from 25 percent to 13 percent.

"We welcome the efforts of the Croatian Government, which, by deciding on tax relief, will further assist Croatian citizens as well as the Croatian economy. With our price reductions, SPAR Croatia supports this move by bringing the price of what is in the shopping baskets of citizens down,'' stated Helmut Fenzl, CEO of SPAR Croatia.

Make sure to stay up to date with our news page for everything you need to know about what's going on up and down the country, from cultural events to live performances, down to tax cuts, business ventures and the latest political scandal.

Friday, 28 December 2018

Flat Tax to Rise Significantly for Dubrovnik's Renters

In line with its reputation for being expensive in all manners, flat tax is set to rise in Dubrovnik next year, much to the dismay of the city's very many private renters.

As Marija Crnjak/Poslovni Dnevnik writes on the 27th of December, 2018, although private renters have already argued that the new law on income tax will significantly increase their burdens, based on the decisions taken by local authorities, it seems that only a few will actually decide to go for more drastic measures in the next year, while a good deal of 2019's taxes will remain at this year's level.

According to the results of Poslovni Dnevnik's mini poll, it would appear that only Dubrovnik will see the flat tax rate increase significantly, with projections suggesting that the optimal amount will be 750 kuna for renters in ''tourist class A'' areas, which along with Dubrovnik includes Orašac, the nearby islands of Lopud and Koločep (Kalamota), as well as Šipanska Luka.

In addition, increases in the aforementione tax are expected in Bol on the island of Brač, but at this moment in time the amount isn't known. Most of the local self-government units that Poslovni Dnevnik contacted stated that they still have to create a draft proposal for a decision on the flat tax amount.

All of them are waiting for a new order to come into force, which defines the method of the determining and the calculating of flat tax. After that, the decision-making procedure on the amount of flat tax will be launched, which takes us into 2019, and could be possible by the end of January next year.

As stipulated by the law, from the present maximum amount of 300 kuna, the flat tax amount can't be less than 150 kuna, or more than 1500 kuna per bed or accommodation unit in a camp or Robinson accommodation.

A decision should still needs to be made by by Rovinj, Zadar, Split, and Pag. At the meeting of the leaders of the local self-government units of the Opatija Riviera (Opatija, Lovran, Matulji and Mošćenička Draga), a single amount of flat tax per bed or accommodation unit was agreed in mid December, and the highest amount of flat tax was 345 kuna, corresponding to the flat tax amount of sojourn fees for 2019.

The highest amount of flat tax will of course be reported by those areas in Croatia which are classified as class A tourist destinations, they state from Opatija, which will also formalise its decision after the adoption of the order.

The Mayor of the City of Poreč will send a proposal to the City Council that the flat tax for rent per bed or accommodation unit in a camp remains the same as it is to date, ie 300 kuna per bed, and 350 kuna per accommodation unit in a camp.

The City of Šibenik has stated that the flat tax rate will not alter. Similarly, the flat tax rate has no intention of being raised in the Primošten municipality either. Responses from Zagreb, Novalja, Crikvenica, Hvar, and Mali Lošinj are still awaited.

Make sure to stay up to date with our dedicated lifestyle and business pages for much more.


Click here for the original article by Marija Crnjak for Poslovni Dnevnik

Monday, 23 October 2017

How to Open a Business in Croatia Online: No Waiting, Some Legwork, Plenty of Stress

If you open a business and a venomous clerk wasn't around to make your life miserable, did you really open a business?

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