Getting advice as a foreign owner of a rental property in Croatia is not always easy. TCN enlists some accountancy advice to answer some popular FAQs on July 5, 2016.
There is an increasing number of foreign landlords who have taken that first step in their „process“ to start renting property according to applicable rules and regulations.
After receiving a VATID number from the Croatian Tax office, there are still some steps to make, and this is the time when all questions start.
Here are a few of those frequently asked:
1. Why do I have to have a bank account in Cro?
Every private person (including Croatian citizens) who rents property to tourists (for a business purpose) has to have a ziro bank account opened at a Croatian bank. This is important because it is monitored by the Tax office. All other private bank accounts should be used for personal expenses that don’t have anything to do with the rental business.
2. What type of bank account?
Lots of foreign landlords went to a bank to open a ziro bank account, but found out later that a bank has opened a „personal bank account“ instead. So, one has to be very careful and really be sure that it’s clearly stated „ziro account“ on the contract with the bank. This happens mostly because bank clerks sometimes act automatically.
3. What are the taxes I have to pay?
A foreign landlord has to pay 13% VAT on accommodation service she/he provides per night. Also, at the end of the year, there is income tax to be calculated and later paid as well. There are different rates depending on the actual income.
4. Do I have to make invoices for guests for accommodation?
Each landlord has to make an invoice to guests for services that has been provided. The invoice has to have both (landlord’s and guest’s) details, description of service, rates, VAT and total amount that has to be paid. This is similar to an invoice that a d.o.o. has to do. So, for all these and other reasons, lots of landlords decide to hire an accountant to deal with paperwork, invoices and necessary records during the year.
5. How do I pay Tourist Tax?
Tourist Tax is still paid as a lump sum that is calculated based on number of beds at property that is rented out. A local Tourist Board puts this amount through the e-visitor online system, so everybody can check the actual debt at any moment. Tourist tax has to be paid to the bank account of the individual local Tourist Board.
How do I pay VAT?
VAT ( note:a difference between VAT from invoices to guests and VAT from invoices paid to suppliers who are also registered at VAT system) has to be paid till end of the current month, for previous month. It is paid to State Budget.
I’m sure there are lots of other questions, so maybe you can contact us and we’ll try to „shed some light“. Contact us on [email protected] with Subject Title ‘Rental Questions’.
