Personal Income Tax

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Personal Income Tax
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Personal income tax - PIT

• PIT is paid on worldwide income in case of tax
  residency in Croatia

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Resident taxpayers

• Resident taxpayer a person who registered
  his/her residence in Croatia who intends to spend
  more than 183 days over a period of two years in
  Croatia

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Non-residents

• A non-resident is a person who has neither a
  legal residence nor a customary habitat in
  Croatia, but earns a taxable income in Croatia
• A legal residence, according to tax laws, is the
  ownership or use (note a lease contract applies)
  of a housing unit for at least 183 days
  continuously actual occupation of the unit is
  not necessary.
• A customary habitat is implied when the
  circumstances lead to the conclusion that the tax
  payers residence is not temporary. In the sphere
  of tax laws, this is concluded after a continuous
  residence of at least 183 days

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New tax rates

• The Croatian Government has published the new
  Personal Income Tax Act (the Act). The Act is in
  force from 1 July 2010.
• The new tax rates are 12, 25 and 40, applied
  progressively as follows
• 12 to the monthly tax base of up to HRK 3,600
• 25 to the monthly tax base of HRK 3,600
  10,800 and
• 40 to the monthly tax base of above HRK 10,800.

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Surtax

• On the total amount of thus calculated pay, a
  surtax is charged in certain municipalities (18
  in Zagreb)

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Personal non-taxable allowance

• Each individual has the right to a personal
  non-taxable monthly allowance of HRK 1,800 and
  further allowances for a dependent spouse and
  children residing in Croatia

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Taxable base

• Income tax is based on the income earned by a
  taxpayer for paid work, independent activities
  and from property rights
• Paid work salaries and pensions
• Independent activities freelance work, crafts,
  agriculture
• Property rights (renting, intellectual property
  rights)

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• Income tax is NOT levied on interest earned on
  hard currency and Croatian current and savings
  accounts, dividends on shares and costs of
  various kinds of social care

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Fringe benefits

• Employers may give employees certain benefits
  that qualify as non-taxable earnings under tax
  regulations

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Benefits in kind

• Benefits in kind received by an employee from his
  employer are subject to income tax. These
  include
• the use of business buildings and means of
  transportation
• Low interest on loans granted by the employer
• Gifts and entertainment provided by the employer
• Shares received from the employer

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Vocabulary

• Legal residence prebivalište
• Customary habitat uobicajeno boravište
• Personal allowance osobna olakšica
• Dependent spouse uzdržavani supružnik
• Freelance work rad na temelj ugovora o djelu
• Current account tekuci racun
• Fringe benefits beneficije iz radnog odnosa
• Benefits in kind nenovcana davanja
  zaposlenicima

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Complete the following text

• All taxpayers are entitled to a personal
  a________ in the a________ of 1,800.00 kn per
  month, while taxpayers who support a s_______,
  children and other family members, can, in
  addition to the basic personal allowance, also
  d______ from their taxable i_______ the personal
  allowances for supported family members.

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• All taxpayers are entitled to a personal
  allowance in the amount of 1,800.00 kn per month,
  while taxpayers who support a spouse, children
  and other family members, can, in addition to the
  basic personal allowance, also deduct from their
  taxable income the personal allowances for
  supported family members.