Doing business in Croatia

Hi Julien!

Yes, the foreign investors are more than wellcome in Croatia. It's not complicate to register a company, you need about 4000 euro. (3000 for deposit in bank account and 1000 for notary.

From 1.1.2013. The effective provision of income tax, which provides that the tax base is reduced by the amount of the profit which increases the capital of the Company in accordance with special regulations. Quoted in practice means that if you decide to keep part or all income earned during the period within the company through equity investments, will be exempt from income tax.

The above provision applies to a tax on profits for 2012. year.

Also it is important to emphasize that the taxpayer that reduces the tax base by entering into equity must, within six months after the deadline for filing your tax return income tax to the competent Tax Administration office has reviewed evidence that increasing the share capital and with a profit tax period declared by reducing the tax base.

This measure aims to encourage businesses to invest profits in further development of society and does not draw profit out of society.

Value of receivables

Value adjustments on revaluation of trade receivables for goods and services, is recognized as an expense if the maturity of debts by the end of the tax period last more than 60 days, and the same are not charged until the fifteenth day before the date of filing tax returns.

The important change is the date 60 days prior to the amendments was 120 days. The above provision of income taxes is consistent with the new law on payment periods (ZRIN) and indicates that payment will be tighter control than before. The same applies to claims that are made starting from 1.3.2012. year.

Advance payments as exclusion

Amendment of the Law on Income Tax Article 10a stipulates that if during the tax period of a natural person paid an advance profit tax and the expiration of that period, the profit is not sufficient to cover such an advance, then came the difference is considered a receipt which is taxable pursuant to Tax Law income.

Specifically, in the event that the amount of advance exceeds the amount available, the difference between profit and paid deposit is considered by excluding members of society and are taxed at a rate of 35%.

So, if during the taxable period to a natural person, a member of society get paid an advance amount of 200.000,00 HRK and the amount of profit at the end of the tax period only 150,000.00, a difference of £ 50000.00 is considered by excluding members of society and the tax rate income tax of 35%.

Payment of profits abroad

Upon entry into force of amendments to the Law on Income Tax, 1.3.2012. The disbursement of profits abroad will be taxed a withholding tax at a rate of 12%.

Until now, once you get into the Republic of Croatia was taxed at a rate of 20%, profit payments abroad were not further taxed income tax withholding.

The said amendment to be changed, and the payment of profits abroad by 01/03/2012. The tax rate of 12%, unless a double taxation treaty signed between Croatia and other countries not otherwise specified.

Amendment of the Law on Income Tax Article 10a stipulates that if during the tax period of a natural person paid an advance profit tax and the expiration of that period, the profit is not sufficient to cover such an advance, then came the difference is considered a receipt which is taxable pursuant to Tax Law income.

Specifically, in the event that the amount of advance exceeds the amount available, the difference between profit and paid deposit is considered by excluding members of society and are taxed at a rate of 35%.

So, if during the taxable period to a natural person, a member of society get paid an advance amount of 200.000,00 HRK and the amount of profit at the end of the tax period only 150,000.00, a difference of £ 50000.00 is considered by excluding members of society and the tax rate income tax of 35%.

Payment of profits abroad

Upon entry into force of amendments to the Law on Income Tax, 1.3.2012. The disbursement of profits abroad will be taxed a withholding tax at a rate of 12%.

Until now, once you get into the Republic of Croatia was taxed at a rate of 20%, profit payments abroad were not further taxed income tax withholding.

The said amendment to be changed, and the payment of profits abroad by 01/03/2012. The tax rate of 12%, unless a double taxation treaty signed between Croatia and other countries not otherwise specified.

Someone else has more informations please?  Some foreigner who has already opened a company? Can you share with us your experience? What do you like about doing business in Croatia? What do you NOT like? Your advices?

Thank you!

I plan on doing it and have several ideas in my head already that I have been pondering.  Large Corporations can do it so what would you have to do that they did????

My husband and I started a company recently and I am from Kenya while he is from Netherlands.

hello.  im starting an import business.  What kind of business did you start?