Croatia: Tax law amendments for 2025
Including direct and indirect tax, and general tax amendments
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January 28, 2025
Amendments to the laws concerning individual (personal) income tax, social security contributions, value added tax (VAT), and general tax, are effective as of January 1, 2025.
Individual income tax law changes
- Amendments to income tax rates
- Increase in personal allowance from €560 to €600
- New lump-sum tax ranges for short-term rentals based on the tourist development index
- Introduction of a five-year 100% tax relief for returnees on employment income
Social security contributions law changes
- Repeal of health insurance contribution exemption for employees under 30 for hires after December 31, 2024
- One-year health insurance contribution exemption for first-time permanent employment
VAT law changes
- Increase in VAT system entry threshold from €40,000 to €60,000
- Provisions for input VAT deductions based on Croatian tax authorities resolutions
- VAT exemptions for EU member states and small and medium-sized enterprises (SMEs) under specified conditions
- VAT refund eligibility for non-EU taxpayers without reciprocity condition
- Taxation of virtual event services based on the recipient's location, rather than event location
General tax law changes
- Expansion of tax audit scope and statute of limitations for cross-border transactions
- Extension of shareholder liability for unfiled tax returns
- Expanded obligation for tax return submission via ePorezna
- Requirement for explicit consent for electronic delivery of tax documents
- Waiver of statute of limitations for tax collection if the Croatian tax authorities cannot initiate the process
- Simplification of procedures for administrative agreements between taxpayers and the Croatian tax authorities
Read a January 2025 report prepared by the KPMG member firm in Croatia