In the last few years, significant amendments to Croatia’s personal income tax legislation have resulted in a reduction of the tax burden of many individuals. Continuing this trend, as of 1 September 2019, the range of “receipts” that can be provided to employees as non-taxable has been extended, and includes such things as employee meal costs, accommodation expenses, child-care costs, etc.
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In the last few years, significant amendments to Croatia’s personal income tax legislation have resulted in a reduction of the tax burden of many individuals.1 This trend, yielding a steady reduction in the once-heavy tax burden faced by Croatian taxpayers, continues. As of 1 September 2019, the range of “receipts” that can be provided to employees as non-taxable has been extended.
The changes could help to provide:
|Additional non-taxable payments2||Amount||Additional requirements|
|Employee meal costs based on supporting documentation||Up to HRK 12,000 annually||
|Cash lump-sum payment covering the costs of an employee’s meals||Up to HRK 5,000 annually||
|Accommodation expenses||Up to the amount of actual expenses||
|Reimbursements of regular child-care costs (pre-school)||Up to the amount of actual expenses||
|Reimbursements for tourism, catering, and other service expenses for an employees’ holiday*||Up to HRK 2,500 annually||
An increase of the amount of the non-taxable daily allowances for business trips within Croatia
> 12 hours
|HRK 200 (instead of previous HRK 170)||
> 8 to 12 hours
|HRK 100 (instead of previous HRK 85)|
* Personal income tax regulation provisions that relate to reimbursements for tourism, catering, and other service expenses for an employees’ holiday are not effective as of 1 September 2019. It will be possible to provide respective reimbursements as non-taxable, once regulated by the Croatian Ministry of Tourism.
The information contained in this newsletter was submitted by the KPMG International member firm in Croatia.
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