Croatia

Value Added Tax

  • Three-month deferral of VAT liability for March and April 2020 (afterwards, potential payment in 24 monthly installments). Only for taxpayers not applying the cash accounting scheme.
  • No VAT on donations of goods and services needed to mitigate effects of COVID-19 epidemic.
  • Postponed accounting of import VAT for imports until 20 June 2020.
  • Import of goods required to mitigate effects of COVID-19 epidemic in 2020 is exempt from customs duty and VAT (only for specific goods and organizations (EU Commission Decision 2020/491).

Corporate Income Tax

  • Aid provided to companies to mitigate effects of coronavirus will not be taxable.
  • Three-month deferral of payment of corporate income tax which became due between 20 March and 20 June 2020. If special circumstances will be prolonged, extension possible for another three months (tax liabilities which will become due until 20 September 2020).
  • Once deferred tax liability becomes due, payment in 24 interest-free monthly instalments will be possible.
  • Exemption from payment can be granted for tax liabilities which became due between 1 April and 20 June 2020. Limited to the taxpayers with the decrease in revenue of at least 50% (and subject to other conditions).
  • Deadline for filing corporate income tax return extended to 30 June. Tax liability needs to be paid until 31 July 2020.

Social Security Contributions or Payroll Tax

  • Three-month deferral of payment of personal income tax and social security contributions which became due between 20 March and 20 June 2020. 
  • If special circumstances will be prolonged, extension possible for another three months (for liabilities which will become due until 20 September 2020). 
  • Once deferred liability becomes due, payment in 24 interest-free monthly instalments will be possible.
  • Exemption from payment can be granted for liabilities which became due between 1 April and 20 June 2020 (excluding contributions to II. Pillar pension insurance). Limited to the taxpayers with decrease in revenue of at least 50% (and subject to other conditions).

Other relief measures

  • Aid which sole entrepreneurs receive to mitigate effects of coronavirus will not be taxable.
  • 2019 tax refund to individuals should be paid in June 2020 instead of August.
  • Eligible employers can apply for non-refundable financial aid for protection of workplaces. For each full-time employee, monthly aid is HRK 3,250 (app. EUR 430) for March and HRK 4,000 (app. EUR 530) for April and May. The employer is not liable to pay mandatory social contributions arising from the aid (considered co-financed part of the salary) – they are paid by the state.

Additional comments

  • Deferral and release of tax liability must be requested by a taxpayer who, as a result of special circumstances, has difficulties with paying due taxes (it is not automatic). Difficulties are proven by the decrease in revenue of at least 20%.
  • Taxpayers who receive approval of deferred payment or release are still obliged to prepare and file all tax returns and reporting within the prescribed deadlines.