The American Chamber of Commerce in Croatia welcomes the tax reforms to date, which have continuously contributed to relieving the burden on employees and entrepreneurs through a series of rounds, improved the functioning of the system, and increased the competitiveness of the Croatian economy.

Despite the progress made, we believe that there is further room for improving the tax system in order to further encourage investment, facilitate business, and ensure the stability of public finances.

In this position paper, AmCham presents recommendations for further tax relief aimed at even stronger investment attraction and greater competitiveness of Croatian employers in attracting and retaining the workforce.

1) Personal income tax

Increasing the personal deduction to 970 euros

Application of the maximum monthly bases in the calculation of healthcare insurance to six average gross salaries (like in case of pension insurance)

Reducing the tax rate from 20% to 10% and from 30% to 20%

Tax relief for workers’ health

Non-taxable income – further unburdening

Level of per diems in Croatia to be set at 50 euros

Allotment of shares and equity interest purchases – further unburdening 

2) Corporate income tax

Introduction of corporate income tax relief based on salary costs

Proposal to improve incentives for investment in research and development

Widening the scope of the exemption from taxation of income derived from investments in subsidiaries