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

Euro bills
Image by Ibrahim Boran

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:

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.

CountryStandard rate (%)Reduced rate (%)Super reduced rate (%)Parking rate (%)
Croatia255/13--
Hungary275/18--
Denmark25---
Portugal236/13-13
Poland235/8--
Slovenia225/9,5--
Czech Republic2110/15--
Netherlands219--
Austria2010/13-13
France205,5/102,1-
Germany197--

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.

CountryContribution typeRate (%)
CroatiaHealth insurance
TOTAL
16,5
16,5
Czech RepublicSocial security/Pension
Sickness
Unemployment
Health insurance
TOTAL
24,8
2,1
1,2
9
33,8
FranceHealth, maternity, disability, death13
Autonomy solidarity contribution0,3
Old age insurance (ceiling of 3.428 €)8,55
Family benefits2,45 - 5,25
Unemployment4,05
Wage Guarantee Insurance0,15
TOTAL29,5 - 31,3
PortugalSocial security
Labor accident insurance
Wage guarantee fund
TOTAL
23,75
1,75
1
26,5
NetherlandsInvalidity 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 fund0,21 - 3,36
Sickness benefits act0,17 - 2,72
Child care premium0,5
TOTAL13,46 - 25,72
PolandRetirement pension
Pension
9,76
6,5
Disability0,67 - 3,33
Labor fund2,45
Guaranteed employee benefits fund0,1
TOTAL19,48 - 22,14
AustriaHealth insurance
Accident insurance
Old-age pension insurance
Unemployment insurance
3,78
1,2
12,55
3
Insolvency guarantee funds contribution0,55
TOTAL21,08
GermanyHealth insurance
7,9
TK-specific supplementary contribution rate0,6
Pension insurance
Unemployment insurance
Long-term care insurance
Insolvency charge
TOTAL
9,3
1,2
1,525
0,12
20,645
SloveniaPension
Health Insurance
Unemployment
Work Injury
Maternity
TOTAL
8,85
6,56
0,06
0,53
0,1
16,10
DenmarkTypeIn DKK
Mandatory social security
Public social security schemes
Industrial injuries insurance
Maternity leave fund
2.271,60
5.300
5.000
1.150
TOTAL13.721 DKK
HungarySocial 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.

CountryContribution typeRate (%)
CroatiaPension - generation solidarity (pillar I)
Pension - individual capital (pillar II)
TOTAL
15
5
20
GermanyHealth 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
NetherlandsOld 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
PolandRetirement
Pension
Sickness
Health insurance
TOTAL
9,76
1,5
2,45
9
22,71
SloveniaPension
Health insurance
Unemployment
Maternity
TOTAL
15,5
6,36
0,14
0,10
22,1
HungaryHealth care
Pension fund
Unemployment fund
TOTAL
7
10
1,5
18,50
AustriaHealth insurance
Old-age pension insurance
Unemployment insurance
TOTAL
3,87
10,25
3
17,12
FranceOld-age insurance
Social security surcharge
Social security debt reimbursement contribution
6,9
9,2
0,5
TOTAL16,1
PortugalSocial security
TOTAL
11
11
Czech RepublicSocial security/Pension
Health insurance
TOTAL
6,5
4,5
11
DenmarkSocial security1.135,80 DKK p.a.
TOTAL1.135,80 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%
CountryRuleRate (%)
CroatiaUp to 360.000 KN
More than 360.000 KN
20
30
AustriaUp 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
SloveniaUp to 8.755 €
8.755 € - 25.750 €
25.750 € - 51.500 €
51.500 € - 71.160 €
More than 71.160 €
16
26
33
39
50
NetherlandsUp to 69.398 €
More than 69.399 €
37,07
49,5
PortugalUp 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
GermanySingle 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
FranceUp to 10.225 €
10.226 € - 26.070 €
26.071 € - 74.545 €
74.54 € - 160.336 €
More than 160.336 €
0
11
30
41
45
DenmarkNational 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
PolandUp to 120.000 PLN
More than 120.000 PLN
17
32 + 15.300 PLN
Czech RepublicUp to 1.867.728 CZK
More than 1.867.728 CZK
15
23
HungaryFlat rate15

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.

CountryRuleRate (%)
CroatiaUp to 7.500.000 KN
More than 7.500.001 KN
10
18
NetherlandsUp to 395.000 €
Above 395.000 €
15
25,8
AustriaStandard25
FranceFixed25
DenmarkStandard22
PortugalFlat21
Local municipality surchargeUp to 1,5
Reduced rate on first 15.000 € for small and medium companies17
PolandStandard19
SloveniaStandard19
Czech RepublicStandard
Dividend income from non-resident entities
Income of certain investment funds
19
15
5
GermanyFixed
Solidarity surcharge
15
5,5
HungaryFlat9

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.

CountryRuleRate (%)
CroatiaCapital gains + surtax10
NetherlandsProfits, homeownership
Up to 69.398 €
More than 69.398 €

Substantial interests
Savings and investments

37,07
49,5

26,9
31
AustriaCapital gains27,5
FranceCapital gains from sale of securities +
exceptional income tax for high earners
Dividends
30
4
30
DenmarkUp to 52,7
PortugalCapital gains, dividends, and interests28
PolandSpecific income sources (personal service or management contract)20
SloveniaCapital gains, interest, dividends, and rental income25
Czech RepublicDividends and interest from abroad15
GermanyCapital 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
HungaryCapital gains, dividends, interests15

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.

CountryRuleRate (%)
CroatiaStandard3
NetherlandsStandard
For long-term residence and starters younger than 35
8
2
PortugalDepends on the purchase price, location, and whether it is 1st or 2nd home1 - 8
GermanyDepends on the federal state3,5 - 6,5
FranceStandard5
HungaryProperty value up to 1 billion HUF
Portion of the value that exceeds 1 billion HUF
4
2
AustriaStandard
Transfer within close family
Entry to land register
3,5
2
1,1
PolandStandard2
SloveniaStandard2
DenmarkStandard0,6
Czech RepublicAbolished with retroactive effect for properties registered in the cadastre as of December 2019 onwards0

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.

CountryRuleRate (%)
CroatiaNo property tax0
NetherlandsPrivate residence
Other types of immovable real estate
2
6
HungaryGeneral4
DenmarkDepends on the municipality1,6 - 3,4
Possible special coverage charge on certain non-residential properties minus the value of the land and value threshold of 50.000 DKKUp to 1
FrancePrimary home
Secondary home
~1
~3
GermanyDepends on the municipality0,26 - 1
SloveniaDwellings and residential property0,1 - 1
PortugalUrban areas0,3 - 0,45
Rural areas0,8
AustriaAgricultural 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
PolandDepends on the municipalityvaries
Czech RepublicDepends on property size and type, purpose of usage, and locationvaries

Want to know definitively what taxes you’ll need to pay while living in Croatia?

Taxes in Croatia can get a bit sticky, especially when you throw in all the laws and treaties. It can be very hard to know exactly what you might have to pay to the Croatian government.

We can connect you to an expat-vetted tax advisor and accountant who can perform a full evaluation of your tax liability in Croatia based on your personal situation.

To be connected with our tax wizard, please complete the below form to get started.


View our other tax articles


Sources:
https://europa.eu/youreurope
https://taxsummaries.pwc.com/
https://www.papayaglobal.com/

Please note: All information provided by Expat in Croatia is only for the purposes of guidance. It does not constitute legal or financial advice in any form. For legal advice, you must consult with a licensed Croatian lawyer. For financial advice, you must consult with a licensed Croatian tax advisor or accountant. We can recommend one if you contact us.

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