INVESTING IN CROATIA: TAXES AND CUSTOMS

In Croatia, most of the taxes are collected from turnover tax (VAT and excise taxes), while taxes on houses, cars and yachts account for the smallest share of taxes. The situation is quite different outside Croatia. There, the income tax and the profit tax account for a lot larger share of taxes than in Croatia (14.6% in the EU, 13.5% in the OECD countries and 7.6% in Croatia), while the turnover tax accounts for a lot smaller share of taxes than in Croatia (12.3% in the EU, 11.3% in the OECD countries and 18.5 % in Croatia). The fact that, in comparison to other countries, Croatia collects the largest percentage of the GDP through contributions is also interesting (11.4% in the EU, 9.4% in the OECD countries and 13.6% in Croatia). After the start of implementation of pension and health systems' reform, the share of mandatory contributions on the national GDP will be reduced.

In 1999, 4.3 billion kuna of customs duties, which accounted for 7% of total tax revenues, flew into the Croatian State budget, which exceeded the sum collected from profit taxes (3.3 billion kuna or 5.4% of total tax revenues). These numbers show that customs duties in Croatia, besides protecting domestic production, also represent very important State budget revenue.

By entering the WTO membership, Croatia has agreed to gradually diminish the customs protection, by what customs will lose the status of foreign trade instrument, and become just one of the sources of State budget revenues. However, by reducing the level of customs' protection, the total amounts of customs duties in the budget will be reduced as well.

This document originates from www.investments.hr website.

BROKER, real estate agency team.