Options and tax liabilities of private renters – nonresidents

What are, in accordance with Croatian tax provisions, liabilities of citizens nonresidents of Croatia (citizens of EU member states and European economic area) when renting out flats, rooms and beds to travelers and tourists or organizing camps in Croatia?

  1. INCOME TAX – It is obligatory, within 8 days from the receipt of the Decision on provision of services in the household, to report to a competent tax administration office considering the location of the real estate, and to register oneself as an income taxpayers.

Income tax is determined as a difference between receipts and expenses (based on a treasury principle – at the moment of payment respectively billing).

A tax obligation is determined based on an annual income tax return application. While compiling the application, receipts and expenditures are abutted (tax payer is being acknowledged with a monthly personal deduction in the amount of 2.600,00 kn), and a tax base is being determined. Such a determined tax base is then used to calculate and liquidate the income tax.

The application for the previous years is furnished in February, and tax payment liability starts on the day the income tax return was delivered (from 1/1/2016).

Tax rates:

To 26.400,00 kn 12 %
From 26.400,00 to 158.400,00 25 %
More than 158.400,00 40 %

Business books and records (pursuant to the Income tax Act):

– Book of receipts and expenses

– Record of claims and obligations

– Book of turnover (not necessary if the Book of receipts and expenses is promptly led on a daily basis)

– Inventory of fixed assets

! Possibility – entry to the income tax system (needs to be approved by the Tax administration)

Income tax is determined as a difference between receipts and expenses (based on business event occurrence).

Tax rate – 20% of the determined tax base.

  1. VALUE ADDED TAX – It is obligatory, fifteen days prior to performing a first inland shipping, to apply with the registry of value added tax payers and to apply for a VAT ID number. Requests are submitted in the District office in Zagreb.

Non residents are obligated to issue invoices and keep business books in accordance with the Value added tax Act.

The basis for value added tax liquidation are fees for delivered goods, respectively services performed.

VAT rate amounts to 13% for accommodation services, respectively accommodation with breakfast and similar.

Tax payer has the right of acknowledging a pretax for input accounts.

Business books (pursuant to the VAT Act):

– Book of input accounts for received goods and services

– Book of output accounts for issued goods and services

– Special records for imported goods

– Special records on gaining goods from other member states, delivered and performed services from and to other member states and third states, and on received deliveries on which transfer of inland tax liabilities applies.

  1.  CONTRIBUTIONS – If a nonresident in his state pays the obligatory contributions, and the Republic of Croatia has an international agreement on social security with that state, he/she is not obligated to pay contributions in Croatia.

Note: If international agreements in force in the Republic of Croatia do not regulate otherwise, the stated tax liabilities are valid.

Persons not residents of the Republic of Croatia, living in a non EU member state, respectively European economic area, are in purpose of rendering these services obligated to establish a trade or a company.