The taxation system for Ukrainians in Croatia

Croatia, as a member state of the European Union, attracts Ukrainian citizens with various opportunities for life, work, and business.

One important aspect to consider when moving to Croatia is the taxation system.

Croatia has a comprehensive tax system that includes value-added tax (VAT), personal income tax, corporate tax, and other taxes.

For Ukrainian citizens who are or plan to be in Croatia, it is important to understand this system and know the main types:

• Personal income tax (PIT) in Croatia is a standard 25%, but it is levied on a progressive basis, which means that the level of taxation depends on the level of income. For residents of Croatia, the tax rates may be different depending on the amount of their income.
• Value-added tax (VAT) is the general system of taxation of goods and services in Croatia – 25%. Some products and services are taxed at reduced VAT rates of 5% and 13%, such as several activities related to catering, tourism, and accommodation. There are also other categories of products that are completely exempt from VAT.
• Corporate tax is another important aspect of the taxation system in Croatia. For businesses operating in Croatia, 10% applies if the company has a turnover of approximately EUR 1 million per year and 18% for companies whose turnover exceeds this amount.
• Other county taxes belong to the budgets of 20 counties and the city of Zagreb.
• Inheritance and gift tax – those who receive an inheritance or gift may be subject to inheritance and gift tax of 4%.
• Vehicle tax – vehicle owners pay motor vehicle road tax at the time of annual registration, ranging from €3.98 to €199.08 per year.
• Ship tax – ship owners must pay ship tax once a year. This tax ranges from €13.27 to €663.61 per year.
• Gaming machine tax – owners of coin-operated machines used for entertainment must pay a levy of €13.27 per machine per month.

In general, individual entrepreneurs in Croatia are subject to taxation under general conditions. Their business income is taxed at ordinary personal income tax rates.

In relation to corporations operating in Croatia, they are taxed at corporate tax rates. This rate may depend on the size of the company’s profit and other factors.

Ukrainian citizens working in Croatia are subject to taxation at their place of work. This means that their income from work in Croatia is subject to taxation according to the rules of that country.

At the same time, Ukrainian citizens who have income in both Croatia and Ukraine may face the problem of double taxation.

To prevent this, Ukraine has a double taxation agreement with Croatia, which defines the taxation rules for persons with income in both countries.

Also, Ukrainian citizens working in Croatia may be entitled to various tax benefits and exemptions depending on their situation.

For example, some groups of employees may be entitled to exemption from taxation for a certain period of time.

For Ukrainian citizens living or working in Croatia, it is important to have an understanding of the taxation system and use certain strategies to optimize tax payments.

The taxation system in Croatia is complex and varied and requires careful understanding and planning by Ukrainian citizens residing or planning to reside in this country.

With the help of proper planning and consultations with tax specialists, Ukrainian citizens can optimize their tax payments and effectively manage their finances.