The year 2015 also brings extensive changes in the areas of taxes, duties and social contributions in CEE and SEE countries. Our tax advisors know all about the current tax rates in Croatia that are important for investors. If you are doing business in Croatia, read more about ‘Investing in Croatia 2015’, to find out how you can reduce the tax base by the amount of reinvested profits.
1. Income Tax/Corporate Income Tax in Croatia
Companies which underlie corporate income tax can reduce their tax base by the amount of reinvested profits if
- they are used to increase the registered share capital and
- investments took place in long-term assets planning to preserve existing working positions; the working positions must be maintained for at least two years
2. Changes of the Withholding Tax
Withholding tax for individual persons has been reduced from 40% to 12% for interest payments.
3. VAT amendments in Croatia
VAT: Reverse Charge system
As of 1 January 2015, a reverse charge regime on local supplies has been implemented that is applicable:
- For all supplies of goods and services performed by a non-established taxpayer to a local taxpayer
- For contraction work and services performed by a local taxpayer to another local taxpayer
- For sale of property (construction land and buildings with the associated land) which is subject to VAT
VAT changes: Construction land and New Real Estate buildings
Furthermore, as of 1 January 2015 the supply of construction land is subject to VAT. Also “new” real estate,i.e. buildings and associated land which are not used within 2 years from the date of acquisition or construction, underlie VAT at 25%.
- Are you planning to invest in real estate in Croatia? Contact our real estate taxation experts first!
Changes to provisions for electronic services
Changes were made to the provisions on the place of performance for electronically provided services as well as telecommunications, and broadcasting services which were provided by a company based in the EU to a company not subject to tax, which is not located within the EU.
In addition the place of performance for telecommunications, broadcasting and electronic services which are provided by companies not established in the Community to companies not subject to tax in the Community was changed.
The annual sales tax returns only have to be submitted for 2014.
4. Other tax changes in Croatia
A further type of company has been introduced: a “simple limited liability company” which has a minimum capital of HRK 10 (EUR 1.3) and can be founded as a sole shareholder company.
- Current Tax News from Europe
- If you have questions about the current tax rates in Croatia, contact our tax experts in Zagreb!