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Croatia - Other taxes and levies

Croatia - Other taxes and levies

Taxation of international executives


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Social security tax

Are there social security/social insurance taxes in Croatia? If so, what are the rates for employers and employees?

If an expatriate has a contractual arrangement with a Croatian legal entity and performs services in Croatia, the Croatian entity needs to withhold and pay compulsory social security contributions (pension fund and health insurance). A Croatian entity refers to all legal entities incorporated in Croatia, branch offices, and representative offices.

Croatian social security rates (applicable for the year 2020) are as follows.

Employer and employee

Type of insurance

Paid by



Employer Percent

Employee Percent






Split between (depending on the age of the employee) Generation solidarity (Pillar 1)




Individual capital savings (Pillar 2)













It should be noted that for the year 2020, the compulsory employee social security contribution base is capped at the maximum monthly amount of HRK52,452 (for both Pillars only on portions of income which qualify as a salary for that month) or HRK629,424 on an annual basis (for Pillar 1 only; there is no annual cap for Pillar 2 contributions). The minimum monthly base for employee and employer social security contributions is HRK3,321.96.

Employer social security contributions are not capped.

Inbound expatriates

An employee of a non-resident company from another EU Member State seconded to work in Croatia remains subject to the home-country/jurisdiction social security system if the anticipated duration of the work performed in Croatia does not exceed 24 months and they are not replacing another person.

An employee of a non-resident company from a non-EU country/jurisdiction seconded to work in Croatia (inbound expatriate) is not subject to the social security system in Croatia, provided there is an effective social security treaty (totalization agreement) between Croatia and the country/jurisdiction where the inbound expatriate is a tax resident, and provided there is no contractual agreement between the inbound expatriate and the Croatian company to which the inbound expatriate has been assigned. Croatia has signed totalization agreements with a number of non-EU countries/jurisdictions. The inbound expatriate must be able to evidence that she/he is insured in their country/jurisdiction of residence and the form prescribed by the totalization agreement must be obtained.

If a totalization agreement cannot be applied or if its application has expired or if there is no agreement in place, the inbound expatriate would at least need to pay compulsory health insurance contributions based on an assessment issued to the inbound expatriate by the Croatian tax authorities.

Outbound expatriates

An (outbound expatriate) employee of a Croatian resident company seconded to work abroad, remains subject to the social security system of Croatia. Monthly receipts of the outbound expatriate are subject to Croatian social security contributions at the standard rates, but the base for calculating the contributions is the salary the outbound expatriate would receive for the same or similar work in Croatia (in accordance with the working contract, book of regulations or collective agreement) increased by 20 percent. Furthermore, the company is liable to pay an additional health insurance contribution at the rate of 10 percent applied to the same increased base. The additional health insurance contribution does not apply to an outbound expatriate seconded to another EU Member State or to a non-EU country/jurisdiction with which Croatia has a totalization agreement.

Other receipts which do not relate to remuneration for work in a specific month (e.g. annual bonus, 13th salary, daily allowances above non-taxable amounts) are subject to Croatian social security contributions at the standard rates and the basis for calculation of Croatia social security contributions is the actual amount of remuneration. Other receipts are not subject to additional health insurance contributions.

Income received by an outbound expatriate from the foreign entity to which the expatriate is seconded to, is subject to pension insurance contributions in Croatia are computed in the same manner as for “other income”.

Gift, wealth, estate, and/or inheritance tax

Are there any gift, wealth, estate, and/or inheritance taxes in Croatia?

Inheritance tax and gift tax at the rate of 4 percent applies to transfers by individuals or legal entities of real estate, cash, securities, or movables, if their individual market value exceeds HRK50,000 (approximately 6,700 Euros (EUR)), where that property is inherited, received as a gift or otherwise received (or transferred), without consideration.

Inheritance and gift tax does not apply to movable property inherited/received as a gift if the transfer is subject to Value Added Tax (VAT).

Inheritance and gift tax provisions are not applicable under certain other circumstances, amongst others, the transfer between immediate relatives (that is spouses, siblings, and children).

Croatia does not levy a wealth tax.

Real estate tax

Are there real estate taxes in Croatia?

The transfer of real estate is, generally, subject to Real Estate Transfer Tax (RETT). RETT is levied at a rate of 3 percent. If the seller of real estate is VAT registered, the transfer of real estate (business / residential premises and accompanying land) and construction land is subject to VAT except for the transfer of real estate that has been occupied for more than 2 years, in which case, generally, RETT applies.

Sales/VAT tax

Are there sales and/or value-added taxes in Croatia?

The standard VAT rate is 25 percent (and applies to most products and services).

A reduced VAT rate of 13 percent - applies to:

  • Tourist accommodation services;
  • Full or half board services and the rent of campsites;
  • Certain newspapers and magazines, otherwise not subject to 5 percent rate, with the exception of newspapers and magazines that consist mainly or entirely of advertisements or whose main purpose is advertising;
  • Edible oils and fats, baby food, (public) supply of water (except bottled or otherwise packaged drinking water) and refined (white) sugar;
  • Tickets for concerts;
  • Supply of electricity and public service of waste collection;
  • Urns and coffins;
  • Seedlings, seeds, fertilizers, pesticides and other agrochemical products;
  • Animal food except pet food;
  • Child diapers, child car seats and child food;
  • Live animals, raw or chilled meat, sausages and other butcher’s products;
  • Live and fresh fish, crabs, mollusks and other water invertebrates;
  • Fresh and dried fruit and vegetables and nuts;
  • Fresh poultry eggs; Services and related copyrights of authors, composers and other artists; and
  • preparation and serving of meals.

A reduced VAT rate of 5 percent - applies to:

  • All kinds of bread and milk;
  • Scientific magazines;
  • Cinema tickets;
  • Certain medicines;
  • Certain medical implants and orthopedic devices;
  • Books of professional, scientific, artistic, cultural and educational contents; and
  • Certain daily newspapers.

VAT exemption (with no input VAT recovery) applies to: health and welfare services, education services, supplies by charitable organizations, supplies by museums, libraries, theaters, orchestras and other cultural services, financial and insurance services, betting and gambling, rental of residential property, postal services supplied by the Croatian National Post, public radio and television broadcasting etc.

The registration threshold is taxable supplies of HRK300,000 (approximately EUR40,000) or more in the previous year.

Based on the general B2B (business to business) rule for taxation of services, provision of services by a Croatian taxpayer to a foreign taxpayer is subject to VAT according to the legal seat of the of service recipient. If a Croatian entrepreneur renders a service to a foreign recipient who is not registered for VAT purposes (e.g. a foreign individual), then those services are subject to VAT in Croatia.

Foreign legal entities may be able to recover VAT, provided relevant conditions are met.

Unemployment tax

Are there additional taxes in Croatia that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.

Local taxes

Municipalities and cities may levy a city surtax, which is calculated on the amount of personal income tax payable, as follows:

  • municipalities, up to 10 percent
  • cities with less than 30,000 inhabitants, up to 12 percent
  • cities with more than 30,000 inhabitants, up to 15 percent
  • 18 percent for the city of Zagreb.

Resident taxpayers are subject to city surtax, while taxpayers who under Croatian domestic tax legislation are non-residents (not taking into account the impact of double tax treaties, if applicable) are not subject to city surtax.

Foreign financial assets

Is there a requirement to declare/report offshore assets (e.g. foreign financial accounts, securities) to the country/jurisdiction’s fiscal or banking authorities?

  • Individuals who have a tax residence or a stay permit for a period longer than 12 months are required to report to the Croatian National Bank the following foreign assets: Purchase/disposal of 10 or more percent of the share in the capital of a foreign entity;
  • Purchase/disposal of real estate abroad;
  • Receipt of dividends and shares in profit based on the share in capital from abroad;
  • Loans from abroad in excess of EUR70,000;
  • Revenue in relation to services provided to foreign individuals/entities in excess of HRK750,000/EUR100,000;
  • Foreign forwards, futures, swaps, options or credit derivatives.


All information contained in this publication is summarized by KPMG Croatia d.o.o. za reviziju , the [Croatian limited liability company ] member firm affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity, based on

  • General Tax Law (Official Gazette no. 115/16, 106/18, 121/19, 32/20, 42/20);
  • Individual Income Tax Law (Official Gazette no. 115/16, 106/18, 121/19, 32/20),
  • Regulation (Official Gazette no. 10/17, 128/17, 106/18, 1/19, 80/19, 1/20, 74/20);
  • Law on Contributions (Official Gazette no. 84/08, 152/08, 94/09, 18/11, 22/12, 144/12, 148/13, 26/14, 30/14, 41/14, 143/14, 115/16, 106/18), Regulation (Official Gazette no. 2/09, 9/09, 97/09, 25/11, 61/12, 86/13, 157/14, 128/17, 1/19);
  • Value Added Tax Law (Official Gazette no. 73/13, USRH 99/13, 148/13, 153/13, 143/14, 115/16, 106/18, 121/19), Regulation (Official Gazette no. 79/13, 85/13, 160/13, 35/14, 157/14, 130/15, 1/17, 41/17, 128/17, 1/19, 1/20);
  • Real Estate Transfer Tax Act (Official Gazette no. 115/16, 106/18);
  • Law on Foreigners (official Gazette no. 130/11, 74/13, 69/17, 46/18, 53/20)
  • Law on Local Taxes (Official Gazette no. 115/16, 101/17).

© 2021 KPMG Croatia d.o.o. za reviziju, a Croatia limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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