Croatia country profile | KPMG | GLOBAL
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Croatia country profile

Croatia country profile

Key tax factors for efficient cross-border business and investment involving Croatia.


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EU Member State


Double Tax Treaties


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Rep. of Ireland
Rep. of Ireland
Rep. of Ireland

Most important forms of doing business

Joint-stock company ("dioničko društvo - d.d.") and limited liability company ("društvo s ograničenom odgovornosti - d.o.o.").

Legal entity capital requirements

Registered share capital of HRK 200,000 for joint-stock companies.

Registered share capital of HRK 20,000 for limited liability companies.

Residence and tax system

A company is resident if its registered office or its place of management and supervision of business is located in Croatia.

Resident companies are taxed on their worldwide income. Non-resident companies are taxed only on their Croatian source income.

Compliance requirements for CIT purposes

Taxpayers are required to submit a CIT return no later than four months following the end of the tax period. Medium-sized and large taxpayers as well as all VAT-registered taxpayers are required to submit the CIT return electronically.

A Balance Sheet and Income Statement should be submitted together with the CIT return.

Corporate income tax rate

As of January 1, 2017, the standard corporate income tax rate was reduced from 20 to 18 percent and a 12 percent rate was introduced for companies with revenues of up to HRK 3 million. This standard rate may be reduced by 50 percent, 75 percent or 100 percent based on certain investment related incentives or if the company is located in a free zone or a special support area, provided certain conditions are met.

Withholding tax rates

On dividends paid to non-resident companies

12 percent on dividends and profit shares.

On interest paid to non-resident companies

The WHT rate on interest is generally 15 percent. However, WHT is not applied on interest in relation to the following:

  • loans provided by banks and other financial institutions;
  • commodity loans for goods purchased in order to conduct
    business activity;
  • corporate bonds.

On patent royalties and certain copyright royalties paid to non-resident companies

15 percent.

On fees for technical services

20 percent if payments are made to tax havens.

On other payments

15 percent on payments for market research, tax and business advisory and audit services

Branch withholding taxes


Holding rules

Dividend received from resident/non-resident subsidiaries

Dividend income is not subject to corporate tax in Croatia.

Capital gains obtained from resident/non-resident subsidiaries

Capital gains should be included in the annual corporate income tax calculation.

Tax losses

Tax losses can be carried forward for up to five years. Tax loss carry-back is not available.

Tax consolidation rules/Group relief rules


Registration duties


Transfer duties

On the transfer of shares


On the transfer of land and buildings

Real estate transfer tax applies on the transfer of land and certain buildings at 4 percent.

Stamp duties


Real estate taxes


Controlled Foreign Company rules


Transfer pricing rules

General transfer pricing rules


Documentation requirement

Documentation to the support the arm's length nature of transactions with related parties is required. PD-IPO form (form on transactions with related parties) must be submitted with the CIT return. 

Thin capitalization rules

Yes, limited application, 4:1 debt-to-equity ratio for interest expenses.

General Anti-Avoidance rules (GAAR)

General anti-avoidance rules apply.

Specific Anti-Avoidance rules/Anti Treaty Shopping Provisions/Anti-Hybrid rules


Advance Ruling system


IP / R&D incentives


Other incentives

Incentives for education and training are available up to a maximum of 80 percent of eligible expenses depending on the type of education and training (general or specific) and the type of business (small, medium or large). These incentives can be further increased by 10 percent if training is provided to ''disadvantaged workers'' (e.g. younger than 25 years of age and that have not previously received regular wage, disabled, etc.).


The standard rate is 25 percent, and the reduced rates are 13 and 5 percent.

Other relevant points of attention

WHT of 15 percent applies on business advisory services (i.e. market research services, tax and business consultancy, and audit services).

A WHT rate of 20 percent on payments for services also applies under domestic tax law, but only for payments for services to entities tax resident in certain countries.

Contact us

Paul Suchar

KPMG in Croatia

T: +385 (0)1 5390 032


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