Tax on capital income is withheld at source without a right for the individual to claim expenses or personal allowances. An obligation to submit an annual personal income tax return does not arise. A non taxable threshold for dividends and profit shares of HRK 12, per annum was abolished as of 1 January ; therefore, a non-taxable threshold applies on the personal income tax returns for that will be submitted in year.
Gains arising from the disposal of real estate and property rights if the disposal takes place after three years of the date of acquisition. With effect from 1 January , interest on saving accounts is treated as income from capital, subject to income tax at the rate of 12 percent, plus city surtax if applicable. The tax is withheld by the payor. Interest on a positive balance on giro accounts, current accounts and foreign currency accounts up to 0.
Loan interest received by individuals from other individuals or legal entities is generally subject to withholding tax. The same approach should be taken for rental income sourced from abroad. If so, please discuss? As of 1 January , capital gains from the disposal of financial assets, acquired after 1 January and disposed of within 3 years from the date of acquisition, will be treated as income from capital subject to tax of 12 percent, plus city surtax if applicable.
If both spouses pay personal income tax, it is possible to share additional allowances for children and other dependents of the immediate family. Croatian domestic tax law indicates that foreign earned income, which is taxed abroad, is also taxable in Croatia but a tax credit for taxes paid abroad may be applied to reduce tax otherwise payable in Croatia; however, the amount of tax credit may not exceed the amount of Croatian tax payable on that foreign income.
A similar principle is used in the case of assignees.
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Assignees must report the receipt of income and they are liable to pay tax within eight days from the date the income was received. For example: monthly, annually, both, and so on. In the case of individuals employed by Croatian employers, tax is due monthly or more often if payments are made more frequently. In the case of assignees, tax is due monthly or more often if payments are received more frequently.
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Tax Considerations for IP Transfer
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What is the tax year-end? What are the compliance requirements for tax returns in Croatia? Tax rates What are the current income tax rates for residents and non-residents in Croatia? There is no de minimus number of days rule.
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Any pre-assignment days are included in the number of days when determining tax residence. What if the assignee comes back for a trip after residency has terminated? Any post-assignment days are included in the number of days when determining tax residence. Not applicable.
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