ZAGREB, April 10, 2019 – Social Democratic Party (SDP) leader Davor Bernardić on Wednesday said that his party would forward a bill of amendments to VAT to the parliament proposing the lowering of VAT for tourism and hospitality in order to improve the competitiveness of that sector that the government is constantly exposing to new and increased levies.
Bernardić told a press conference that SDP wanted the VAT rate to be lowered to 13% in hospitality and 10% for accommodation services just as in the countries in Europe where tourism is developed.
He does not expect the government to accept the proposal, and criticised the Andrej Plenković cabinet for having rejected all their proposals which he described as good ones.
However, the party leader promises that when SDP wins the next election and takes responsibility for Croatia, it will reduce VAT for hospitality and accommodation services.
He recalled that a lower VAT rate of 13%, which was applied in 2017, no longer applies to hospitality, underscoring that other EU countries have a lower VAT rate overall. Seventeen EU member states have recognised the importance of hospitality and apply a lower VAT in that sector and unlike Croatia, they promote the development of tourism.
The incumbent government has hit the tourism sector five times, Bernardić underscored. It abolished the lower VAT rate in hospitality and now we have the highest VAT in the sector of all Mediterranean countries, Bernardić said.
Croatia’s standard VAT rate is 25%. In late 2018, Tourism Minister Gari Capelli announced that the government would reduce the VAT rate on hospitality services in 2020.
This government has relieved the economy based on fiscal possibilities. In 2020, it will reduce VAT on tourism and hospitality services, Cappelli said then in response to questions from SDP lawmakers during a parliamentary debate on three bills in the tourism sector.
More news on the taxes in Croatia can be found in the Business section.
