Dividend Tax in Croatia

 

Companies with establishments in Croatia are subject to the standard corporate income tax rate of 18%, with the mention that profits under EUR 398,168 are levied with a 12% corporate income tax (CIT). This kind of tax enters the attention of branches and subsidiaries of companies from abroad, companies engaged in long-term independent activities and having profits. It is good to know that the corporate income tax applies to companies with registered revenues in Croatia. Moreover, a reduced CIT is applicable to incomes from profit sharing and dividends. It is important to have a complete idea about the taxes you need to pay in Croatia if you have a business in this country. This is a matter where you can receive complete legal advice from our team of lawyers in Croatia who can also handle the requirements for opening a business in Croatia.

 

 

The business income is subject to taxation in Croatia and the same thing is available in the employment field and the revenues registered as a worker in this country. Independent personal activities developed in Croatia and the revenues from insurance or capital originating within Croatia are subject to taxation in this state. Foreign investors with real estate properties in Croatia are also levied.

 

 

Limited liability companies established in Croatia must pay the corporate income tax of 18% or 12%, depending on the generated revenues. The good news is that there is no dividend tax imposed for LLCs in Croatia, as this tax has been abolished a few years ago. The taxation of capital gains of DOOs in Croatia is established at a rate of 18% or 12% if the annual revenues are under EUR 398,168.

 

 

Having no dividend tax and a reduced corporate income tax are among the tax benefits a foreigner can enjoy when having a business in Croatia. Having access to the Adriatic Sea and countries worldwide make foreign investors decide for varied operations and activities in the tourism sector in Croatia. here are a few facts you should bear in mind when thinking of Croatia for business:

 

1. Hotels, deluxe resorts, tourism agencies, and also logistics companies are preferred types of businesses in Croatia for which the incorporation is fast and simple. 
2. For example, a limited liability company (DOO) can be set up with a minimum share capital of EUR 2,500 and can enjoy several tax exemptions in the case they decide for hiring the local workforce.
3. It is good to know that partnerships in Croatia are not subject to minimum share capital, and more than that, the reinvested profits are free from taxes. 
4. Large companies from abroad can decide on establishing branches and subsidiaries in an easy manner, with fewer formalities and with respect to the local rules.

 

 

 

The decision of eliminating the dividend tax in Croatia came naturally considering that this was an important step in attracting investors from abroad. Also, having no profit tax for 10 years under special conditions make foreigners decide on doing business in Croatia. Also, the taxation of interest on corporate fixed income securities which are repaid to non-resident entrepreneurs is not imposed. There is no wealth tax imposed in Croatia and no other taxes on pension funds, securities, interest payments on loans, gifts and inheritance in Croatia. We remind that the generated incomes from independent activities, and from companies having operations related to the transfer of products and people in airports and seaports are subject to taxation in Croatia. 

 

When opening a business in Croatia, one must observe the start-up costs involved, including the ones related to the notary and registration. We remind that our team of lawyers in Croatia are at the disposal of foreign investors who want to do business in this country and who want to know the taxation structure for each type of company. You should pay attention to the tax regime and observe the tax benefits involved, such as the dividend tax which is not applicable in Croatia.