The Local Taxes Act (Act), part of the 2017 Croatian tax
reform, entered into force on January 1 2017. The main change
includes the introduction of the new real estate tax (not to be
confused with the real estate transfer tax) and the abolishing
of the company name tax. Aside from the real estate tax, no
further taxes are introduced. Instead, the taxes regulated by
the Law Concerning the Financing of Units of Local Government
and Regional Self-Government are being transferred and
incorporated into this new Act in order to align them into a
more efficient and structural manner within the goals of the
Croatian tax system reform.
Provisions related to the real estate tax should enter into
force on January 1 2018 with contemporary abolishment of the
holiday homes tax, with the purpose of avoiding double taxation
of a same property with two types of property taxes. The
introduction of a real estate tax also abolishes the public
utility charges and the monument annuity in line with the
purpose of unifying all charges related to a property
(currently being charged through several different
administrative procedures). However, the introduction of the
real estate tax has provoked severe criticism and negative
reactions and numerous controversies in the media. Therefore,
the Croatian prime minister announced the postponement in the
application of the tax, but without a concrete and official
postponement.
Separately, the inheritance and gifts tax rate has been
reduced from 5% to 4%. The tax was previously paid based on the
application of a taxpayer. In 2017, the obligation of reporting
the inheritance and gifts tax by the taxpayer was abolished but
only in cases when such a document has been verified by a
notary or issued by a competent official body.
As of January 1 2017, the company name tax is no longer due,
with the purpose of releasing entrepreneurs from excessive tax
burdens. All proceedings in the matter initiated before this
date shall be completed according to the provisions of the Law
Concerning the Financing of Units of Local Government and
Regional Self-Government.
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Silvia Cancedda |
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David Jakovljevic |
Silvia Cancedda and David Jakovljevic (zagreb@eurofast.eu)
Eurofast Croatia
Tel: +385 1 7980 646
Website: www.eurofast.eu