Taxation

Income tax in Croatia

Income tax in Croatia is progressive, depending on the amount of your earnings. Croatian income taxes are some of the highest in Europe, ranging from 15% to 45% of income.

Taxation

You only pay tax on income which is derived from sources within Croatia, or if you become a tax resident. Tax residents in Croatia have to declare worldwide income.

There are two ways of being declared a tax resident in Croatia. The first is based on physical presence and the second on residence availability.

Physical presence requires that you live in Croatia for more than 183 days within a year, and that circumstances suggest your visit is not temporary. The 183 days may overlap calendar years.

Residence availability means that you had a house or apartment in Croatia at your exclusive disposal for at least 183 days within a year. Circumstances must suggest that you plan on keeping and using this residence but it is not necessary for you to occupy the residence. The 183 days may also overlap calendar years.

Independent to whether your are a tax resident or not, you will have to pay income tax on the following:

  • Income from employment that is received from work in Croatia;
  • Income from a business in Croatia;
  • Income from real estate;
  • Income from one's own or chartered ships/aircrafts used for dispatching goods or people from Croatian ports/airports;
  • Income from independent personal activities that are used for generating capital for an activity in Croatia;
  • Income from capital or insurance that originates from within Croatia;
  • Pensions received from abroad.

Tax free income in Croatia includes the following:

  • Dividends received locally or abroad;
  • Interest payments on loans and investments;
  • Capital gain from trading;
  • Capital gain from real estate, provided you owned the property for more than three years, occupied it, or sold it to your spouse or a member of your immediate family;
  • Inheritance and gifts in the first line of succession (otherwise taxed at 5%).

City surtax

Croatia has no wealth tax, but the municipalities are allowed to claim a city surtax for tax residents. This tax is levied based on your income tax, varies from region to region and can range between 10% and 30% of income tax.

You only pay tax on income which is derived from sources within Croatia, or if you become a tax resident. Tax residents in Croatia have to declare worldwide income.

There are two ways of being declared a tax resident in Croatia. The first is based on physical presence and the second on residence availability.

Physical presence requires that you live in Croatia for more than 183 days within a year, and that circumstances suggest your visit is not temporary. The 183 days may overlap calendar years.

Residence availability means that you had a house or apartment in Croatia at your exclusive disposal for at least 183 days within a year. Circumstances must suggest that you plan on keeping and using this residence but it is not necessary for you to occupy the residence. The 183 days may also overlap calendar years.

Independent to whether your are a tax resident or not, you will have to pay income tax on the following:

  • Income from employment that is received from work in Croatia;
  • Income from a business in Croatia;
  • Income from real estate;
  • Income from one's own or chartered ships/aircrafts used for dispatching goods or people from Croatian ports/airports;
  • Income from independent personal activities that are used for generating capital for an activity in Croatia;
  • Income from capital or insurance that originates from within Croatia;
  • Pensions received from abroad.

Tax free income in Croatia includes the following:

  • Dividends received locally or abroad;
  • Interest payments on loans and investments;
  • Capital gain from trading;
  • Capital gain from real estate, provided you owned the property for more than three years, occupied it, or sold it to your spouse or a member of your immediate family;
  • Inheritance and gifts in the first line of succession (otherwise taxed at 5%).

City surtax

Croatia has no wealth tax, but the municipalities are allowed to claim a city surtax for tax residents. This tax is levied based on your income tax, varies from region to region and can range between 10% and 30% of income tax.

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