National and International Tax Legislation

Income tax, profit tax (corporate tax), value added tax, land transfer tax and community tax are among the most important tax types for investors in Croatia.

A business tax similar to the German business tax doesn’t exist in Croatia. The communities may charge a surtax “prirez” on the income tax.

For foreign companies that operate or would like to operate in Croatia, the profit tax is of special importance. The tax rate is standardised at 20%.

The profit tax law differentiates between resident and non-resident taxpayers. Resident taxpayers have an unrestricted tax liability. In contrast, non-resident taxpayers have limited tax liability.

In accordance with the world income principle, every commercial entity and every other legal entity that carries out an activity with profit aims and is located in, or has its management in Croatia, is tax liable for the entire global revenue.

In Croatian legislation, provisions for transfer prices also exist that should be observed between affiliated companies. Just as in most foreign countries, the arm’s length principle should be noted.