Croatia government proposes income, profit tax cuts amid pandemic

The Croatian government on Thursday proposed cutting income and profit taxes from the beginning of next year in an effort to boost the business environment and consumer spending amid the coronavirus pandemic.

From Jan. 1, 2021, profit tax for the vast majority of the local companies would be reduced to 10% from 12%.

“This refers to all companies that have an annual turnover of up to 7.5 million kuna ($1.17 million),” Finance Minister Zdravko Maric told a cabinet session.

Income tax rates would be reduced to 30% from 36% and to 20% from 24%.

At the moment, annual salaries higher than 360,000 kuna are taxed at the higher rate.

Parliamentary approval is needed for the changes which is likely to come this month or in early December.

($1 = 6.4147 kuna)