Fourth Tax Reform Round Sent to Parliament for Second Reading

ZAGREB, November 27, 2019 – The government on Tuesday sent to parliament for a second reading amendments to laws from the fourth tax reform round which envisage 2.4 billion kuna in tax relief.

Under amendments to the Value Added Tax Act, the general VAT rate would remain 25% and a 13% rate would be applied as of next year on the preparation and serving of food in and outside restaurants.

It is estimated that the lower VAT rate in the hospitality industry will reduce budget revenues by 900 million kuna annually.

In relation to the first reading, the government is proposing a 13% VAT rate also for phonographic rights owners, said Finance Minister Zdravko Marić.

Also in relation to the first reading, the bill stipulates the taxation of foreign income. If a taxpayer reports a foreign income, interest due to the passage of time will not be charged, which Marić said would stimulate the reporting of foreign income.

Prime Minister Andrej Plenković said the total tax relief in the four rounds of the tax reform totalled nearly 9 billion kuna.

More news about taxes in Croatia can be found in the Business section.

 

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