Croatia | Croatia real estates

Tax changes in Croatia

The New Year has just begun, and as usual it brings plenty of changes to all countries around the world. And we believe that for Croatia this year will be the most important of the last 15 years because of the preparations for joining the European Union. Lots of reforms and changes are to be done by the new Croatian Government and first of them are ready to be implemented.

The new Prime Minister, Zoran Milanović, announced some new taxes to be implemented soon, such as capital gains tax, dividend tax and property tax. This will undoubtedly influence the Croatian real estate market, increasing the number of properties for sale in Croatia. The increase of VAT in Croatia from 23% to 25% (starting 1st of March) will also have an impact on Croatian property market , which can 'force' the real estate prices to go up.

Speaking about VAT changes in Croatia, we must notice that in the hospitality business it will be reduced from 10% to 8%, which will for sure attract a significant number of new investors into Croatian tourism.

Also the salary tax is goung to be changed: low salaries (under 3,000 kuna) will be tax free; but higher salaries and pensions will stay untouched.

The Government is preparing to update the law on financial transactions according to the EU standards. The state will be obligated to pay its commitments in max. 30 days, and the term of the VAT payment for entrepreneurs will be prolonged to 45-60 days (depending on the agreement with the Government).

To summarize, we can say that Croatia is carefully preparing to join the EU and it seems that it has all it needs to become the most successful country of all last entered the EU.