Croatian Government announces amendments to a set of tax regulations


Although this was announced as a “2023 reform”, most experts agree that the Government plan represents a further set of administrative changes to existing tax legislation.

Draft amendments have not yet been published, and they will still need to undergo public e-consulting and a parliamentary voting procedure. We therefore just list few key points from the Government’s public presentation.

In the area of personal taxation, the plan is to:

  • increase non-taxable personal allowance, increase the threshold for the lower PIT rate, abolish city-tax and introduce a city- / local government- authority and compensate for this by adjusting/increasing annual PIT rates.
  • clarify tax treatment of share option vs. stock option plans.
  • regulate taxation of tips (including tax-free amount).


In the area of social security, the plan is to decrease the base for calculating pension contributions (Pillar I) with no adverse effect on future pension income.

In terms of business taxation, the Government announced it would abolish the withholding of tax on market research and business consulting services and dividends paid to recipients in the EEA. Withholding tax would be increased for payments to tax non-cooperative jurisdictions.

VAT-wise, it is worth mentioning a plan to regulate bad debt relief: taxpayers should, under certain conditions, finally be able to decrease their VAT liability for non-collected receivables.

The government presented further simplifications in the field of tax consultancy, improvements to the administrative cooperation in VAT and an increase in the range for tax on holiday homes.