Tax relief and economic measures offered by the Croatian government due to COVID-19 & Zagreb earthquake

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LAST UPDATED: 11/08/2020

The coronavirus epidemic has just begun in Croatia and the biggest impact is expected in the coming weeks. COVID-19 has already left a huge bruise on the Croatian economy, but the full consequences have yet to reveal themselves. Job losses have already begun in the private sector. While public sector jobs are still safe, that may change.

Since the start of this economic crisis, the state has already implemented several tax relief measures to help businesses and individuals get through the impacts of the COVID-19 epidemic. The goal of these measures is to save jobs and balance the already shaken economy.

Before we dive in, the government has set up a web site for all things COVID-19 and Croatia, which you can check out here. The latest updates on absolutely everything will be posted there first.

If you are a business owner and you need help to navigate which tax relief measures you qualify for and how to apply, we can connect you a legal expert who can help you sort it all out. Contact us here.

Most vulnerable business sectors affected by COVID-19

Unfortunately, the economic effects are being felt across the business spectrum. While tourism will be the hardest hit, as products and services move through the supply chain most businesses will feel the hurt of this. The business sectors most impacted by the coronavirus pandemic include:

  • Anything related tourism, which includes:
    • Vacation apartment rentals
    • Hotels
    • Tour agencies
    • Restaurants
    • Caffe bars
  • Catering (Ugostiteljstvo)
  • Entertainment (Zabava)
  • Arts (Umjetnost)
  • Culture (Kultura)
  • Transport (Prijevoz)
  • Public Relations
  • Real estate agencies (Iznajmljivanje)
  • Household appliances (Bijela tehnika )
  • Small businesses (Mali poduzetnici)

Generally speaking, all businesses will be impacted in one way or the other. With highly recommended self-isolation and the state-mandated closing of all non-essential businesses, fewer people are out spending money and there are fewer places to spend money.

Active Croatia tax relief measures

The Croatian government has decided to implement several tax relief measures to help alleviate the financial burden that businesses across the country are feeling.

It is important to note that the available relief measures are changing frequently as the situation develops and as the parliament (Sabor) has time to address and finalize the details of each measure.

This list is constantly changing. We will update it weekly as we get new information. If the program is already accepting applications, we’ve noted that it is “IMPLEMENTED” to the right of the program name.

#1 ZABA will offer special loans for victims of Zagreb earthquake – IMPLEMENTED

Owners of houses and apartments damaged in the Zagreb earthquake can now get a special loan at ZABA (Zagrebačka banka). This loan is for properties in the area of Zagreb, Zagreb county, and Krapina-zagorje county.

All information is available at ZABA’s pages under the category “Najčešća pitanja” (FAQ).

If you have any questions, call +385 800 0024 or send an email to [email protected]


#2 Unemployment benefits for fired workers – IMPLEMENTED

Residents who have lost their job can register for unemployment through HZZ via email. They must apply to the closest office to their address. The list of all HZZ’s offices and their email addresses can be found here.

You will need to provide:

  • Filled out application form (Signature not required)
  • Identifikacijski dokument (identification document) – Valid ID card issued in Croatia or another EEA member state or Switzerland, a passport or a residence card for third-country nationals
  • Potvrda o boravištu (Residence certificate) – This is necessary if the person applies somewhere outside the place/address stated in an identification document

#3 Reduction of reserve requirement – IMPLEMENTED

HNB (Croatian National Bank) has reduced the usual reserve requirement rate from 12% to 9%. This will make things easier for the Croatian banking system and help the economy to survive the crisis. By lowering the reserve requirement rate, more money will circulate and the liquidity of the banking system will be increased.

#4 Postponing payment of PDV – IMPLEMENTED

All companies will have the option to delay payment of PDV until invoices are paid, to remove the burden from the taxpayer. This change in policy is only temporary and thus far, the government has not yet defined an exact timeline for how long they will allow this postponement.

  • For March, the delay expires in July
  • For January to March, the delay expires in July
  • For April, the delay expires in August

This measure expires in August.

#5 Delay of financial reporting deadlines – IMPLEMENTED

This measure is offered to all businesses.

Here are the deadlines for financial reporting:

  1. June 30, 2020
    • Bilance
    • Račun dobiti i gubitka
    • Dodatnih podaci za statističke i druge potrebe
  1. 8 months from the last day of business year (if the business year is equal to calendar year, the deadline is August 8, 2020)
    • Godišnji financijski izvještaji
    • Godišnje izvješće
    • Revizijsko izvješće
    • Odluka o utvrđivanju GFI
    • Odluka o raspodjeli dobitka ili pokriću gubitka
  1. 10 months from the last day of business year (if the business year is equal to calendar year, the deadline is October 8, 2020)
    • Konsolidirana GFI
    • Konsolidirano godišnje izvješće together with Revizijsko izvješće
  1. June 30, 2020
    • Izjava o neaktivnosti za prethodnu poslovnu godinu


#6 Agricultural subsidies – IMPLEMENTED

To encourage domestic agricultural production, at least 60% of agricultural and food products must be produced or refined in Croatia or come from Croatian businesses going forward.

The government will buy up all surpluses from companies that produce domestic dairy products.

#7 Loans, credit reprogramming and credit deferral – IMPLEMENTED

All companies whose business is endangered due to the coronavirus crisis can apply for loan and credit measures through FINA to preserve the level of economic activity and liquidity.

Available measures include:

  • Krediti za likvidnost i radni kapital (Liquidity and working capital loans)
  • Reprogram kredita (Credit reprogramming)
  • Odgoda kredita (Credit deferral)

All requests can be sumbitted online, which will then be processed and delivered to banks. Banks will contact applicants with feedback and next steps.

All queries can be asked via email [email protected]


#8 Micro loans for rural development – IMPLEMENTED

Applications for a loan called “Mikro zajam za ruralni razvoj” are open. Funds are intended for micro and small businesses in agricultural, manufacturing, and forestry sectors.

The loan amount ranges from 1.000 EUR to 25.000 EUR with an interest rate of 0,5%. The repayment period is 3 years.

Detailed program is available here.


#9 Enforcement procedures will be stopped – IMPLEMENTED

The government will stop enforcement procedures for citizens who aren’t paying their debts on time.

Zakon o provedbi ovrhe na novčanim sredstvima (Law on Enforcement) has been revised and was published in Narodne Novine.

This change to the law includes:

  • A temporary stop of all enforcement on citizen’s bank accounts
  • A temporary stop of all interest rates

The goal is to help citizens who give a part of their monthly income for enforcement costs. Instead, they can use this extra money for daily living costs.

This program has been extended to October 18, 2020.

#10 Postponing the seasonal toll increase – IMPLEMENTED

Croatian Minister of Sea, Transport and Infrastructure has announced that the seasonal toll on highways will not increase for the summer. The cost to use the toll highways typically increases for the summer season. There is a possibility that the government will even reduce the toll for Croatian citizens but that has yet to be decided. (If they do, we’ll update this post. Let’s hope they do!)

The hold on the season toll increase is valid for the summer only.

The toll at the Krčki most (Krk’s bridge) is also now abolished.


#11 Free dopunsko for low income people – IMPLEMENTED

The government has changed Zakon o dobrovoljnom zdravstvenom osiguranju to allow for low income citizens to have free dopunsko health insurance. Citizens whose monthly incomes are lower than 1.563 kuna (on average per family member in a household) don’t have to pay for dopunsko health insurance. For single people, their monthly income must be lower than 2.000 kuna to qualify.


#12 20.000 kuna per household for earthquake damage – IMPLEMENTED

The government will help finance owners of family houses, apartments, and protected tenants that suffered damage from the earthquake in Zagreb, Zagreb county, and Krapina-Zagorje county. Each household will receive 20.000 kuna. This money is intended for repair of heating, chimneys, boilers and other essentials. The aim is to help citizens return to their homes.

The building manager should apply for this benefit on behalf of buildings. Homeowners should apply for houses.

Applications opened on May 15 and will be closed after 60 days.

All the information and forms are available here.


#13 Tourism-specific tax relief – IMPLEMENTED

The Ministry of Tourism has implemented the following benefits in the tourism sector:

  1. Exemption from paying tourist fees for private renters

Persons who offer catering services in the household and family farms are exempt from paying 50% of tourist fee in 2020, which they are obligated to pay for the main bed and the accommodation unit in camps or objects arranged in the “robinson” style. They are also exempt from paying tourist fees for additional beds for the year of 2020.

  1. Exemption from paying the variable part of the concession fee for 2019 for those who use concession on tourist land in camps

The variable part of the concession fee won’t be charged according to the prescribed model. Instead it will be the amount of 1 kuna.

There is an exemption from paying the fixed part of the concession fee for 2020 for those who use concession on tourist land in camps.

Paying the fixed part of the concession fee is delayed for 3 months – from August 31 to November 30, 2020.

  1. Exemption from paying the variable part of the concession fee for 2019 for using tourist lands in ownership of JLS (jedinice lokalne samouprave = local authority units)

The variable part of the concession fee won’t be charged according to the prescribed model. Instead it will be the amount of 1 kuna.

There is an exemption from paying the fixed part of the concession fee for 2020 for using tourist lands in ownership of JLS.

Paying the fixed part of the concession fee is delayed for 3 months – from August 31 to November 30, 2020.

  1. Additional changes in the law:
  • The validity period for temporary solutions for catering objects, household facilities and family farms have been extended to the end of 2021. This regards objects that already submitted the request for legalization, but they still haven’t received permanent solutions on legalization.
  • Deadlines for renters who want to keep their category label (stars) must submit the request for the new solution:
    • Until April 8 2022 – those who got old solution for category labels before December 31, 2000
    • Until April 8 2023 – those who got old solution for category labels between January 1, 2001 and December 31, 2004
    • Until April 4 2024 – those who got old solution for category labels after December 31, 2004
  • The directive which regulates amounts that can be used for salary of workers in tourism in relation to the total revenues of the company won’t be applied in 2020 and 2021.

#14 HBOR offers cheaper loans for entrepreneurs – IMPLEMENTED

HBOR – Hrvatska banka za obnovu i razvoj (Croatian Bank for Reconstruction and Development) is offering cheaper loans to entrepreneurs due to the coronavirus crisis. This regards micro, small, and middle entrepreneurs, and those who have up to 3000 employees and their business was operating normally before December 31, 2019. Their business must be declared as critical due to the epidemic by FINA.

The credit maximum is the amount of 35 million kuna and interest rates are 0,75% lower than the regular interest rate amounts. The money can be used for employees’ salaries, paying bills, procurement of raw materials, costs towards suppliers, and other business costs.

Loans can be approved via banks that cooperate with HBOR: ZABA, PBZ, Erste, OTP, RBA, HPB, Addiko, and Sperbank.


#15 A building to house earthquake victims planned for Zagreb – IMPLEMENTED

The city of Zagreb plans to build a new building for citizens whose houses/apartments have been ruined in the earthquake. Building will have 270 apartments minimum and will be placed in Podbrežje (a neighborhood behind Siget). The building will have an underground garage, green roof, video surveillance, and air conditioning.

The building could be ready for living within a year and a half to two years (but the exact deadline still isn’t defined). Besides this building, another building for the earthquake victims should also be built.

#16 Ferry prices won’t increase during summer season – IMPLEMENTED

This year, seasonal ferry prices of all Croatian ferry lines won’t be increased due to the coronavirus epidemic. Lower prices should enable citizens to travel to Croatian islands easier and cheaper. The goal is to support the economy and tourism on Croatian islands and the coast.

#17 Shortened work weeks – IMPLEMENTED

The government has announced a new COVID-19 measure that includes implementing part-time working hours. Companies that are having problems in management and a decrease of business activities would get a subsidy for a part of their employee’s salaries resulting in shortened working hours.

The measure will run from June 1, 2020 and until December 31, 2020. Funding is provided from the European commission program. The highest amount of the subsidy will be 2.000 kuna per employee.

Businesses whose income has decreased by more than 20% will be able to apply for this measure. Working hours must be reduced by at least 10%, but no more than 50%. This measure excludes employees who work remotely.

HZZ implemented this measure with the following requirements:

It will be valid from June 1, 2020 to December 31, 2020.

The amount of the subsidy is 2.000 kuna per employee.

The requirements for applying for this measure include:

  • Businesses must have an economic activity and employ 10 or more employees
  • Businesses that have 10-50 employees may apply if the request is submitted for at least 20% of employees
  • Businesses that have 51 and more employees may apply if the request is submitted for at least 10% of employees
  • There is a restriction for users on dividend payment for a period between May 29, 2020 and December 31, 2021

List of required documentation available here.


#18 Shortened work weeks for micro businesses – IMPLEMENTED

The amount of the subsidy is up to 2.000 kuna per employee.

This measure is valid for August 2020.

Here are the requirements for applying:

  • Business must have up to 10 employees (9 or less)
  • The decrease of the revenue for June 2020 and June 2019 must be higher than 50%
  • This is valid for employees who started to work before June 2020

The request can be submitted between August 5 and August 31, 2020.

List of required documentation is available here.

Applications can be submitted online.


#19 COVID-19 subsidy for new employees in Split – IMPLEMENTED

The city of Split is offering non-refundable subsidies for existing companies to hire new employees in the area of the city of Split.

Business that can apply are:

  • Craft businesses (obrt)
  • Limited liability companies (j.d.o.o. and d.o.o.)
  • Micro, small, and medium businesses

The amount of the subsidy is 4.000 kuna per new employee. The employment must be contracted for full-time employment for a period of at least 4 months.

The deadline is December 31, 2020 or until the funds are used.

More information and all the documentation needed is available here.


#20 HBOR extended the moratorium for loans – IMPLEMENTED

HBOR has extended the moratorium of loans:

  • Fortourism businesses to June 30, 2021 (for additional 16 months)
  • For clients from other business sectors to September 30, 2020 (for additional 7 months)
  • For clients that have a positive COVID-score determined according to FINA’s calculation through December 31, 2020

Those with these loans will get HBOR’s instructions on the conditions for extending the moratorium and a form to fill out and send back to HBOR. Those who use HBOR’s loans via leasing companies or commercial banks will need to submit the request to companies/banks.

Besides the moratorium, HBOR has enabled the extension of loan deadlines, a grace period and loan repayment period to entrepreneurs. Users are released from paying the usual fees for a period of 6 months, and users from tourist sectors are released for a period of 16 months.

The COVID-score is FINA’s methodology for calculating the level of threat to businesses’ activities/management due to the COVID-19 epidemic. The COVID score is calculated for each request/business according to the available information delivered from that business/company. This score is then used for approving additional financing, postponement or rescheduling of existing credit obligations of vulnerable business entities.


#21 Salary support to preserve employment for July and August – IMPLEMENTED

HZZ will continue their salary support in July and August for businesses whose revenue has decreased by at least 60% in June 2020 when compared to June 2019.

This measure includes the following sectors according to the NKD:

  • H – Prijevoz i skladištenje (Transport and storage)
  • I – Djelatnosti pružanja smještaja te pripreme i usluživanja hrane (Accommodation and food service activities)
  • J – Informacije i komunikacije (Information and communication)
  • M – Stručne, znanstvene i tehničke djelatnosti (Professional, scientific and technical activities)
  • N – Administrativne i pomoćne uslužne djelatnosti (Administrative and support service activities)
  • R – Umjetnost, zabava i rekreacija (Arts, entertainment and recreation)
  • S – Ostale uslužne djelatnosti (Other service activities)

Limited liability companies, trade business, self-employed persons and other businesses that pay income tax can apply for this subsidy.

The amount of the subsidy is up to 4.000 kuna per employee.

Requests can be submitted from July 12, 2020 to August 31, 2020 via this online application.

More information is available at HZZ.


#22 Subsidy from the city of Zagreb for earthquake consequences –  IMPLEMENTED

The city of Zagreb is giving subsidies for the purchase of materials and construction supplies to help its citizens rebuild their homes damaged by the earthquake.

The amount of the subsidy is up to 50.000 kuna. Requests must be submitted to Gradski ured za gospodarstvo, energetiku i zaštitu okoliša (The City Office for Economy, Energy and Environmental Protection). The deadline is September 15, 2020.

Detailed information and documentation needed can be found at Zagreb’s official pages.


#23 Subsidies for entities that employ persons with disabilities (from July to December) – IMPLEMENTED

A new measure to encourage employment of people with disabilities has been implemented.

Entities that can apply are:

  • Shelter workshops
  • Integrative workshops
  • Work units for the employment of people with disabilities

They can apply regardless of the sector in which they operate. This means that they can come both from the private and public sector.

The amount of the subsidy is up to 4.000 kuna per employee. The measure is active from July 2020 to December 2020.

The documentation needed can be downloaded here.

Applications are submitted online.

More information is available at HZZ.


#24 Law on reconstruction of Zagreb – NOT YET IMPLEMENTED

A law on the reconstruction of Zagreb in response to the earthquake has been proposed and sent to the parliamentary procedure. The law will be debated in the Sabor the first week of August.

The proposed law will finance reconstruction of buildings according to the following structure:

  • Government funds – 60%
  • Local authority units – 20%
  • Homeowners – 20%

Once the law is official, we will update it here.


Expired tax relief and economic measures

The Croatian government has implement many financial measures, some of which have already expired. Below is a list of the measures that were put in place, but now are no longer available.

#1 Early release of income tax refunds – EXPIRED

Issuance of tax refunds started on June 12, 2020. The Minister of Finance Zdravko Marić stated that tax refunds will be paid to all citizens until June 26, 2020 (but no later than June 30, 2020). Citizens will receive “privremeno porezno rješenje” (a temporary tax solution) at their addresses.

This program is no longer available.


#2 Deferment of public contributions – EXPIRED

This measure includes:

  1. Deferment of paying porez na dohodak (income tax)
  2. Deferment of paying porez na dobit (profit tax)
  3. Deferment of paying doprinosi na plaću (contributions on wages)
    1. Zdravstveno osiguranje (health insurance)
    2. Mirovinsko osiguranje (pension)

Private entrepreneurs, self-employed, and freelancers most affected have the option of delaying payment of these taxes for a period of three months. If the situation worsens, it is possible that the deferment will be extended for another three months.

After this period finishes, the taxes must be paid back in installments in a period of up to 24 months without any fees. Taxpayers who are not able to pay for delayed public contributions after the deferment period expires can submit a request for payment in installments. The installment period can last for up to 24 months and includes no fees.

Your company must not have a debt that is higher than 200 kuna to qualify.

Usually these taxes feed into the budget for local authorities. During the period of deferment, the state will pay these contributions directly to local authorities so that their budget is not impacted.

Business owners whose business is endangered can now send the request for 3-months deferral of paying taxes to Porezna uprava.

The request must be submitted within 5 days after the maturity of deferred contributions (starting from June 24 2020). More information is available here.

Here are instructions on how to apply for this deferment:

Zahtjev za odgodom plaćanja uslijed posebnih okolnosti (A request for deferral of payment due to special circumstances) can be sent via:

  • ePorezna
  • Porezna uprava web form
    • Under the section Odabir teme * choose the option ePorezna – JPPU
    • Under the section Odabir podteme * choose the option Zahtjev za odgodu plaćanja
    • Fill in this form and enclose it under the section Priložene datoteke
    • Note: if you are not able to sign and attach the form, a form without the signature will be accepted as well. Be sure to include your contact information in the request and email if necessary.

Frequently asked questions regarding this measure can be found here.

This program is no longer available.

#3 Exemption for obrt trade companies – EXPIRED

HOK (Croatian Chamber of Trades and Crafts) will exempt all owners of obrt (trades) from paying komorski doprinos (chamber contribution) for the next 3 months, starting from April 1, 2020. You can read more about this measure here.

This program is no longer available.


#4 Elimination of real estate interest – EXPIRED

Ministarstvo državne imovine (Ministry of State Property) has decided that during the coronavirus crisis, they won’t charge statutory interest rates on real estate rents and contracts won’t be terminated if the rent isn’t paid.

The deferment is valid 3 months after the payment deadline.

This program is no longer available.


#5 Salary support to preserve employment for June – EXPIRED

A new HZZ measure to extend support to June for preserving employment for workers has been implemented. The amount of support for full time workers is 4.000 kuna per employee. For those that employ part-time workers, the amount will be proportional.

If your business used the salary support measure for March, April, and May, you must apply again for June. To qualify, entrepreneurs must prove that their company’s revenue for May 2020 decreased by at least 50% compared to May 2019. Companies that have been open for less than 1 year must compare their revenues for May 2020 with February 2020.

All the details are available at HZZ’s pages.

This program is no longer available.


#6 COVID-19 Loan – EXPIRED

Applications for a loan called “COVID-19 zajam” are open. Its aim is to ensure additional liquidity for micro, small and medium businesses. It is funded by the European Regional Development Fund.

The maximum loan amount is 750.000 kuna with an interest rate of 0,25%. Expiration date is up to 6 months, and the repayment deadline is 5 years.

It is intended to help all micro, small and medium businesses EXCEPT:

  • Fisheries, aquaculture, and primary agricultural production
  • Tobacco and distilled alcoholic beverages
  • Manufacture and trade of weapons
  • Casinos
  • Other businesses excluded by the Program’s terms

This program is no longer available.


#7 Elimination of chamber of commerce fees – EXPIRED

HGK (Croatian Chamber of Commerce) has decided to exempt business owners who are not earning an income during the pandemic from paying membership fees for the next 3 months.

This program is no longer available.


#8 Subsidized employee salaries – EXPIRED

A new measure from HZZ has been implemented called “Potpore za očuvanje radnih mjesta u djelatnostima pogođenima koronavirusom (COVID – 19)”. The purpose of this measure is to give financial support to businesses in an effort to preserve jobs.

This financial support will help subsidize employee salaries for up to 3 months starting March 1, 2020. The amount of the subsidy is 3.250 kuna for March per worker, and will increase to 4.000 per month per worker for April and May. The state will also pay the contributions on top of salary, which amounts to approximately 1.460 kuna per worker per month on a salary of 4.000 kuna. The exact amount varies as local taxes vary by jurisdiction.

The government hopes that businesses will pay their employees more in salary than just this subsidized amount. This program is only available to business owners (companies, trades and independent professions) who KEEP their employees. The companies must have been opened before February 29, 2020.

To qualify for this subsidy, you must prove that your income is 20% lower now than it was at the same time last year.

Requests for March can still be submitted by April 4th. The payment will be made by the 10th. This same schedule will apply to May and June as well respectively.

You can submit your application for support here.

This program is no longer available.


#9 Payment of income tax and salary contributions – EXPIRED

Businesses that earn income in amounts of less than 7,5 million kuna per year (93% of companies) and whose income has fallen more than 50% will be exempt from paying tax liabilities (porezne obveze), which includes income taxes (porez na dobit and porez na dohodak) as well as contributions on salary (doprinosi).

The 7% of businesses that earn more than 7,5 million kuna will be exempt from these tax liabilities in proportion with the fall of their incomes for April, May, and June as compared to the same months last year.

For businesses whose income has fallen 20-50%, tax liabilities will be postponed for 24 months. Those whose income has fallen 50-100% will pay proportionally. For example, if income has fallen 75%, they will pay 25% from the total 100%.

For businesses whose income has fallen for less than 20%, it is assumed that they are strong enough to survive the crisis.

Businesses who qualify on this measure must deliver to Porezna uprava:

  1. Documentation that shows proof of decrease in revenues/receipts in relation to the data available to tax administration – More information is available here
  2. Data showing revenues/receipts of taxpayers that aren’t available to tax administration

This program is no longer available.


Are you a business owner and need help figuring out which measures you qualify for?

As a business owner myself, I know how hard it can be to navigate the system. The Croatian government has implemented some real valuable tax relief measures and subsidies that can help your business during this time if you’re revenue has been impacted by the pandemic. You shouldn’t have to miss out because you don’t know the language or what to do.

We can connect you with a legal expert who can advise you on which measures you qualify and how to apply. Contact us using the below form and get help now.


Has your business been affected by COVID-19? What do you want the government to do to help your business survive?

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