December 13, 2023 – At a late session last night, the Zagreb City Assembly accepted the decision of Mayor Tomislav Tomašević on the level of annual income tax rates in Zagreb – a lower tax rate of 23.60 percent and a higher tax rate of 35.40 percent.
As Poslovni notes, these tax rates will come into effect on January 1, 2024.
An amendment to Tomašević’s proposal was submitted by the Club of City Representatives of HDZ and HSLS, but it was not accepted. They proposed that the rate of annual income tax in Zagreb instead of the established maximum of 23.60 percent for the lower tax base up to EUR 50,400 should be 20 percent. The higher tax rate instead of the established maximum of 35.40 percent for the part of the tax base that exceeds the amount of 50,400 euros was proposed at 30 percent.
No Wage Increase for Citizens Due to Higher Income Tax Rates in Zagreb
The president of the HDZ and HSLS Club, Mario Župan, said that they believe that there is no need to compensate for the abolition of the income tax surcharge by introducing the maximum permissible income tax rates, but that it is necessary to maintain the existing tax rates. The Semi-Annual Report on Zagreb Budget Zagreb 2023, the first Amendments and Supplements to the Budget for 2023 and projections for 2024 and 2025, as well as the proposed other Amendments and Supplements to the Budget for 2023 all note a significant increase in the income that the City of Zagreb receives from self-employment income tax. In addition, in 2024, due to the increased rates of income tax on final taxes (capital and property), and the expected growth of wages of nine percent, a further increase in income from income tax is expected.
“It is shameful that in all of Croatia, only the citizens of Zagreb will not see a significant salary increase from January 1, 2024. If we look at the four big cities – in Osijek, the surtax is completely abolished and the minimum income tax rates are set, and even Rijeka or Split, where the mayors are not HDZ, are not introducing maximum income tax rates. Therefore, the City of Zagreb is the only city in Croatia that imposes the maximum tax burden on its citizens,” said Mislav Herman, vice-president of the City Assembly and president of Zagreb’s HDZ.