Press Release - 3rd Set of Recommendations for Economic Relief

AmCham Croatia welcomes the recently adopted Action Plan for Reduction of Non-tax and Parafiscal Charges with the goal of supporting the economy. Within its 3rd Set of Recommendations for Economic Relief, AmCham presented, among other things, measures for additional reduction and abolishment of parafiscal charges and indirect taxes.

“Entrepreneurs in Croatia pay about 440 different parafiscal charges, which significantly hinder their business operations. Certain taxes have a generally useful purpose, so abolishing them would create a budget deficit that would have to be financed from other sources. There are also numerous taxes that do not represent a big financial burden, but the purpose of their payment is not transparent. A large number of indirect taxes and payments represents an administrative burden as well, in terms of monitoring payment obligations and overly complex procedures. The biggest problems the entrepreneurs point out are: too many parafiscal charges, lack of transparency, financial burden, procedural complexity and administratively demanding monitoring of the payment obligation. For that reason, we think it is necessary to focus on an additional reduction of the total number of parafiscal charges and financial burden caused by the taxes,” said Andrea Doko Jelušić, Executive Director at AmCham Croatia.

A part of the recommendations also refers to the introduction of the possibility of tax loss carryback, deferral, and exemption from advance payments of corporation tax in 2020, the offset of mutual tax liabilities and the exemption from payment of VAT on earthquake donations.

“We would like to take this opportunity to emphasize once again the importance of providing an extension of the time limit for the implementation of the Croatian Government's measures for supporting the economy. Once the extraordinary circumstances caused by the pandemic end, it is expected that a certain period will be required to restart the activities suspended, place orders of raw materials, contact clients and establish a regular work cycle. Therefore, it is already necessary at this moment to consider an extension of the aid measures for the economy by three months following the end of the extraordinary circumstances, and 12 months in the case of tourism,” said Doko Jelušić.