Parliament Votes in Fourth Round of Tax Reform

Total Croatia News

ZAGREB, November 29, 2019 – The Croatian parliament on Friday voted in a set of nine tax laws making up the fourth tax reform which brings tax reliefs in the amount of HRK 2.4 billion.

The changes bring a lower, 13% VAT rate on food and dessert preparation and serving in and outside catering establishments, and a lower VAT rate for holders of phonographic rights.

As for income tax, the non-taxable income has been raised from 3,800 to 4,000 kuna. Income tax for young people under 25 is reduced by 100% while income tax for young people aged 25-30 is cut by 50%.

As for profit taxation, the limit for taxation with the higher, 18% rate, is raised from 3 to 7.5 million kuna, which means that 93% of entrepreneurs will pay taxes at a rate of 12%, while the current share of entrepreneurs is 85%.

The tax reform also keeps the standard VAT rate of 25%, the total financial effect of that measure being 1.8 billion kuna.

The fourth round of the tax reform brings tax reliefs in the amount of 2.4 billion kuna, and together with the three previous rounds, the total financial effect is 9 billion kuna in tax reliefs.

Parliament today also adopted amendments to the law on ferry transport and occasional coastal transport aimed at creating better conditions for the exercise of the right to transport concessions, particularly for the disabled and children with developmental disabilities.

More tax news can be found in the Business section.


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