Comparison of Croatia’s taxes with taxes of the 10 largest EU/EEA Member States

We are very often asked what the tax system is like in Croatia, which makes sense. Taxes are a big concern for most people, and most of us want to pay as little as possible. Croatia is not a tax haven or shelter. We will state that upfront.
However, when looking at the tax rates, it helps to put them into context. To set that context, we’ve prepared a tax comparison between Croatia and 10 other EU/EEA Member States including:
- Austria
- Czech Republic
- Denmark
- France
- Germany
- Hungary
- Netherlands
- Poland
- Portugal
- Slovenia
In this post, we cover:
- VAT comparison and rates
- Contributions on salaries
- Working income tax
- Profit tax on companies
- Passive income tax
- Property transfer tax
- Property tax
The facts are these…
Comparison between Croatia tax rates and other EU member state tax rates
VAT comparison and rates
VAT stands for Value Added Tax, which is added to most products and services. In Croatia, VAT is referred to as PDV.
[Read: PDV (Value Added Tax) in Croatia]
EU Member States have a responsibility to define their own VAT rates. There are several types of VAT rates, but not all countries apply all of them.
Below is a table that shows a comparison of VAT rates.
Country | Standard rate (%) | Reduced rate (%) | Super reduced rate (%) | Parking rate (%) |
---|---|---|---|---|
Croatia | 25 | 5/13 | - | - |
Hungary | 27 | 5/18 | - | - |
Denmark | 25 | - | - | - |
Portugal | 23 | 6/13 | - | 13 |
Poland | 23 | 5/8 | - | - |
Slovenia | 22 | 5/9,5 | - | - |
Czech Republic | 21 | 10/15 | - | - |
Netherlands | 21 | 9 | - | - |
Austria | 20 | 10/13 | - | 13 |
France | 20 | 5,5/10 | 2,1 | - |
Germany | 19 | 7 | - | - |
Here are explanations of the different types of VAT rates mentioned in this table.
Standard rate
The standard VAT rate applies to the supply of most goods and services. Each country defines its own rate, but it cannot be lower than 15%.
Reduced rate
Reduced VAT rates apply to the supply of specific goods and services. In most cases, they don’t apply to electronically supplied services. Reduced rates cannot be lower than 5%.
Super-reduced rate (special rate)
Some of these countries apply special VAT rates on certain supplies including:
- Super-reduced rate
- Zero rate
- Parking rate
Parking rate
Some countries apply parking VAT rates to certain supplies of goods and services, instead of the standard rate. They are also called intermediary rates. Parking rates cannot be lower than 12%.
Contributions on salaries
Generally speaking, employers in the EU pay contributions to the state on behalf of their employees. This usually includes pension, health insurance, and income tax – but can vary.
Below are tables that show the rates for employer and employee contributions.
Employer Payroll Contributions
Employer payroll contributions or contributions paid on top of salary are paid by the employer. In Croatia, they are called doprinosi na plaću.
Country | Contribution type | Rate (%) |
---|---|---|
Croatia | Health insurance TOTAL | 16,5 16,5 |
Czech Republic | Social security/Pension Sickness Unemployment Health insurance TOTAL | 24,8 2,1 1,2 9 33,8 |
France | Health, maternity, disability, death | 13 |
Autonomy solidarity contribution | 0,3 | |
Old age insurance (ceiling of 3.428 €) | 8,55 | |
Family benefits | 2,45 - 5,25 | |
Unemployment | 4,05 | |
Wage Guarantee Insurance | 0,15 | |
TOTAL | 29,5 - 31,3 | |
Portugal | Social security Labor accident insurance Wage guarantee fund TOTAL | 23,75 1,75 1 26,5 |
Netherlands | Invalidity insurance fund - Small employers - Medium to large employers Unemployment fund - AWf layer - AWf high Healthcare insurance act | 5,49 7,05 0,34 5,34 6,75 |
Work resumption fund | 0,21 - 3,36 | |
Sickness benefits act | 0,17 - 2,72 | |
Child care premium | 0,5 | |
TOTAL | 13,46 - 25,72 | |
Poland | Retirement pension Pension | 9,76 6,5 |
Disability | 0,67 - 3,33 | |
Labor fund | 2,45 | |
Guaranteed employee benefits fund | 0,1 | |
TOTAL | 19,48 - 22,14 | |
Austria | Health insurance Accident insurance Old-age pension insurance Unemployment insurance | 3,78 1,2 12,55 3 |
Insolvency guarantee funds contribution | 0,55 | |
TOTAL | 21,08 | |
Germany | Health insurance | 7,9 |
TK-specific supplementary contribution rate | 0,6 | |
Pension insurance Unemployment insurance Long-term care insurance Insolvency charge TOTAL | 9,3 1,2 1,525 0,12 20,645 | |
Slovenia | Pension Health Insurance Unemployment Work Injury Maternity TOTAL | 8,85 6,56 0,06 0,53 0,1 16,10 |
Denmark | Type | In DKK |
Mandatory social security Public social security schemes Industrial injuries insurance Maternity leave fund | 2.271,60 5.300 5.000 1.150 | |
TOTAL | 13.721 DKK | |
Hungary | Social contribution tax TOTAL | 13 13 |
Employee Payroll Contributions
Employee payroll contributions or contributions collected from the salary are paid at the expense of the employee. In Croatia, they are called doprinosi iz plaće.
Country | Contribution type | Rate (%) |
---|---|---|
Croatia | Pension - generation solidarity (pillar I) Pension - individual capital (pillar II) TOTAL | 15 5 20 |
Germany | Health insurance TK-specific supplementary contribution rate Pension insurance Unemployment insurance Long-term care insurance Church tax TOTAL | 7,9 0,6 9,3 1.2 1,525 0 - 9 22,05 - 31,05 |
Netherlands | Old age pension Orphans and widow/widower pension Long term care General unemployment fund TOTAL | 17,9 0,1 9,65 Up to 2,7 27,65 - 30,35 |
Poland | Retirement Pension Sickness Health insurance TOTAL | 9,76 1,5 2,45 9 22,71 |
Slovenia | Pension Health insurance Unemployment Maternity TOTAL | 15,5 6,36 0,14 0,10 22,1 |
Hungary | Health care Pension fund Unemployment fund TOTAL | 7 10 1,5 18,50 |
Austria | Health insurance Old-age pension insurance Unemployment insurance TOTAL | 3,87 10,25 3 17,12 |
France | Old-age insurance Social security surcharge Social security debt reimbursement contribution | 6,9 9,2 0,5 |
TOTAL | 16,1 | |
Portugal | Social security TOTAL | 11 11 |
Czech Republic | Social security/Pension Health insurance TOTAL | 6,5 4,5 11 |
Denmark | Social security | 1.135,80 DKK p.a. |
TOTAL | 1.135,80 DKK |
Personal income (working) tax
Personal income is calculated on salaries and wages a person earns. Tax rates for Croatia plus 10 EU/EEA countries are listed in the table below.
Croatia does have a municipality surtax on income, which varies. You can view those rates for each municipality and city here.
The surtax is charged according to the following rules:
- Municipality – Up to 10%
- Town under 30.000 inhabitants – Up to 12%
- City over 30.000 inhabitants – Up to 15%
- City of Zagreb – Up to 18%
Country | Rule | Rate (%) |
---|---|---|
Croatia | Up to 47.780,28 € More than 47.780,28 € | 20 30 |
Austria | Up to 11.000 € 11.001 € - 18.000 € 18.001 € - 31.000 € 31.001 € - 60.000 € 60.001 € - 90.000 € 90.001 € - 1.000.000 € More than 1.000.000 | 0 20 30 40 48 50 55 |
Slovenia | Up to 8.755 € 8.755 € - 25.750 € 25.750 € - 51.500 € 51.500 € - 71.160 € More than 71.160 € | 16 26 33 39 50 |
Netherlands | Up to 69.398 € More than 69.399 € | 37,07 49,5 |
Portugal | Up to 7.116 € 7.116,01 € - 10.736 € 10.736,01 € - 15.216 € 15.216,01 € - 19.696 € 19.696,01 € - 25.076 € 25.076,01 € - 36.757 € 36.757,01 € - 48.033 € 48.033,01 € - 75.009 € More than 75.009,01 € | 14,5 23 26,5 28,5 35 37 43,5 45 48 |
Germany | Single person Up to 9.984 € 9.985 € - 58.596 € 58.597 € - 277.825 € More than 277.826 € Married person Up to 19.488 € 19.488 € - 115.836 € 115.836 € - 549.224 € More than 549.224 € | 0 14 42 45 0 14 42 45 |
France | Up to 10.225 € 10.226 € - 26.070 € 26.071 € - 74.545 € 74.54 € - 160.336 € More than 160.336 € | 0 11 30 41 45 |
Denmark | National tax * Bottom tax * Top tax Local tax * Labor market tax * Municipal tax Share tax Up to 56.500 DKK More than 56.500 DKK | 12,11 24,971 8 24.971 27 42 |
Poland | Up to 120.000 PLN More than 120.000 PLN | 17 32 + 15.300 PLN |
Czech Republic | Up to 1.867.728 CZK More than 1.867.728 CZK | 15 23 |
Hungary | Flat rate | 15 |
Profit tax on companies
A corporate income tax called porez na dobit is a tax that companies pay to the state budget for the profits they earn. This tax is paid on the company’s taxable income which implies the company’s revenue reduced by operating costs including the ones for sold goods, administration, selling and marketing, research and development, and depreciation.
The combined corporate income tax for the countries we observe are the following.
Country | Rule | Rate (%) |
---|---|---|
Croatia | Up to 995.421,06 € More than 995.421,06 € | 10 18 |
Netherlands | Up to 395.000 € Above 395.000 € | 15 25,8 |
Austria | Standard | 25 |
France | Fixed | 25 |
Denmark | Standard | 22 |
Portugal | Flat | 21 |
Local municipality surcharge | Up to 1,5 | |
Reduced rate on first 15.000 € for small and medium companies | 17 | |
Poland | Standard | 19 |
Slovenia | Standard | 19 |
Czech Republic | Standard Dividend income from non-resident entities Income of certain investment funds | 19 15 5 |
Germany | Fixed Solidarity surcharge | 15 5,5 |
Hungary | Flat | 9 |
Passive income tax
The passive income tax called porez na pasivni prihod is calculated on incomes that are not gained as a regular salary. It is an income that is subsequently earned for certain actions that you made in the past.
This includes passive income earnings from:
- Sold or rented properties
- Stock and investment fund dividends
- Copyright to written and sold books
- Written articles
- Online courses
- Social networks
- Capital gains
- Partnership in business
- Certain types of cryptocurrency gains
- Sale of certain rights or concessions
Tax rates for the countries we observe are the following.
Country | Rule | Rate (%) |
---|---|---|
Croatia | Capital gains + surtax | 10 |
Netherlands | Profits, homeownership Up to 69.398 € More than 69.398 € Substantial interests Savings and investments | 37,07 49,5 26,9 31 |
Austria | Capital gains | 27,5 |
France | Capital gains from sale of securities + exceptional income tax for high earners Dividends | 30 4 30 |
Denmark | Up to 52,7 | |
Portugal | Capital gains, dividends, and interests | 28 |
Poland | Specific income sources (personal service or management contract) | 20 |
Slovenia | Capital gains, interest, dividends, and rental income | 25 |
Czech Republic | Dividends and interest from abroad | 15 |
Germany | Capital gains from financial investments Movable assets if the sale is within 1 year and real estate if the sale is within 10 years after the purchase date for profits more than 600 € | 25 progressive |
Hungary | Capital gains, dividends, interests | 15 |
Real estate (property) transfer tax
The real estate transfer tax is paid once you acquire (purchase or inherit) a real estate (land or building) for which the VAT is not paid. Tax rates for the countries we observe are the following.
Country | Rule | Rate (%) |
---|---|---|
Croatia | Standard | 3 |
Netherlands | Standard For long-term residence and starters younger than 35 | 8 2 |
Portugal | Depends on the purchase price, location, and whether it is 1st or 2nd home | 1 - 8 |
Germany | Depends on the federal state | 3,5 - 6,5 |
France | Standard | 5 |
Hungary | Property value up to 1 billion HUF Portion of the value that exceeds 1 billion HUF | 4 2 |
Austria | Standard Transfer within close family Entry to land register | 3,5 2 1,1 |
Poland | Standard | 2 |
Slovenia | Standard | 2 |
Denmark | Standard | 0,6 |
Czech Republic | Abolished with retroactive effect for properties registered in the cadastre as of December 2019 onwards | 0 |
Real estate (property) tax
A property tax is a tax that is paid on the real estate property of the individual or a company. It is calculated according to the value of the property or land.
In Croatia, there is no property tax, so owners of real estate properties are not obliged to pay this type of tax. However, holiday homeowners are obliged to pay a tax in the amount of 5-15 kuna per square meter.
The real estate property tax for the countries we observe are the following.
Country | Rule | Rate (%) |
---|---|---|
Croatia | No property tax | 0 |
Netherlands | Private residence Other types of immovable real estate | 2 6 |
Hungary | General | 4 |
Denmark | Depends on the municipality | 1,6 - 3,4 |
Possible special coverage charge on certain non-residential properties minus the value of the land and value threshold of 50.000 DKK | Up to 1 | |
France | Primary home Secondary home | ~1 ~3 |
Germany | Depends on the municipality | 0,26 - 1 |
Slovenia | Dwellings and residential property | 0,1 - 1 |
Portugal | Urban areas | 0,3 - 0,45 |
Rural areas | 0,8 | |
Austria | Agricultural area and forestry * First 3.650 € * Value exceeding 3.650 € Buildings and property Single-family houses * First 3.650 € * Next 7.300 € Leasehold and shared property * First 3.650 € * Next 3.650 € Other properties * First 3.650 € * To the rest special municipal rate is applied * Tax amount is reduced by a general reduction of 25% as stated by law and increased by a 35% inflation adjustment | 0,16 0,2 0,2 0,05 0,1 0,1 0,15 0,1 |
Poland | Depends on the municipality | varies |
Czech Republic | Depends on property size and type, purpose of usage, and location | varies |
View our other tax articles
- All the taxes you might pay in Croatia: Guide for 2022
- Changes to Croatia’s tax laws (Effective starting 2021)
- PDV (Value Added Tax) in Croatia
- Shopping online: What are the taxes and customs fees
- What is a tax stamp and why do you need them
- What is fiscalization and why does it matter to business owners
Sources:
Pravila o PDV-u i stope PDV-a: standardne, posebne i snižene stope
taxsummaries.pwc.com
papayaglobal.com
Please note: Information provided by Expat in Croatia is only for the purposes of guidance. It does not constitute legal or financial advice in any form. Croatian laws and bureaucratic rules often change, and each personal case is individual, so different rules may apply. For legal advice, contact us to consult with a licensed Croatian lawyer. For financial advice, contact us to consult with a licensed Croatian tax advisor or accountant.