croatia2

COVID-19 Countermeasures in Croatia

Summary

Area
Title
Description
Labour law
Incentive of Croatian Employment Bureau
Incentive of HRK 4,000 for net salary and HRK 1,825 for compulsory social security contributions per month per employee
Tax
Collection of taxes
Postponement of tax payments under certain conditions
Tax liabilities write off
Full write off of tax liabilities for April and May 2020 for the taxpayers whose 2019 turnover was less than HRK 7.5 m and have a fall in turnover of more than 50%. For the taxpayers whose 2019 turnover was higher than HRK 7.5m and have a fall in turnover of more than 50% proportionally to the fall in turnover
Advance payments of corporation and income tax for 2020
Advance payments can be reduced to zero, if the taxpayer is closed and does not realise income
VAT exemptions
Donations of goods needed to fight COVID-19 disease are exempt from payment of VAT. Import of goods needed to fight COVID-19 disease are exempt from import VAT and excise duties
VAT on import
Non-cash payment of VAT on import of all type of goods imported until 20 June 2020
Extended deadlines for filing CPT and annual financial statements
Deadline for filing 2019 CPT return is extended from 30 April to 30 June 2020 and for the payment of CPT liability from 30 April to 31 July 2020. Deadlines for filing annual financial statements are extended for two months
Financial support
Working capital favourable loans
Micro, small and medium entrepreneurs are entitled to preferential loans

Labour market

Incentive of Croatian Employment Bureau

The conditions for the incentive are that the employer has a reduced volume of business activities due to the COVID-19 crisis.

  • Entitled firms: accommodation, restaurants, transportation and storage, health tourism, labour-intensive activities within the manufacturing industry, employers who are unable to perform their activities in accordance with the decisions of the Civil Protection Staff; other employers who can prove the impact of special circumstances
  • Amount: HRK 4000 per month for a full-time employee + social security contributions with respect to this amount. Granted for 3 months
  • How to apply: application to the Croatian Employment Bureau, business difficulties have to be proven. The drop in revenue must be greater than 20%. This incentive is available only to employers who will maintain employment contracts.

Tax provisions

Tax Deadline Extension

Some taxes’ payments have been postponed 3 months from the original due date. Such deferred amounts may be paid in instalments over a period of up to 24 months. Deadline for filing financial statements for 2019 to FINA will be prolonged.

  • VAT liability is due within three months, starting with the VAT liability due in April 2020.
  • VAT liability will be due for payment upon collection of receivables per issued invoices. This applies to all taxpayers.
  • Liabilities due for taxes (other than VAT), contributions and other public charges (excluding customs duties and excise duties) are due 20 June 2020
  • Entrepreneurs whose 2019 turnover was less than HRK 7.5 m and have a fall in turnover of more than 50% will be for free from payment of corporate profit tax, personal income tax (wage taxes) and social security contributions for the period from April to June 2020.
  • Entrepreneurs whose 2019 turnover was higher than HRK 7.5 m and have a fall in turnover of more than 50% will be free from payment of corporate profit tax, personal income tax (wage taxes) and social security contributions proportionally to the amount of fall in turnover for the period from April to June 2020.

Financial support

ESIF micro loans for working capital

  • Entitled firms: Micro (less than 10 employees, operating income or assets up to EUR 2 million) and Small businesses (less than 50 employees, operating income or assets up to EUR 10 million) that have at least 1 employee, 50% private ownership and who did not have accounts blocked more than 30 days in the last 6 month period nor outstanding public liabilities
  • Amount: From EUR 1,000.00 to EUR 25,000.00
  • Interest rate: 0.5% - 0.75% - 1.00%
  • Grace period: Up to 12 months
  • Maturity: Up to 3 years including grace period
  • Collateral: Promissory note (and other collateral depending on risk assessment)
  • Purpose: Working capital. Prohibited use for VAT financing, refinancing of existing liabilities, settlement of public liabilities or liabilities to financial institutions.

COVID-19 loans for working capital

  • Entitled firms: Micro (less than 10 employees, operating income or assets up to EUR 2 million) Small (less than 50 employees, operating income or assets up to EUR 10 million) and Medium businesses (more than 50 employees, operating income or assets exceeding EUR 10 million) which recorded decrease in revenues of more than 20% in the first quarter or forecast such decline in the following periods; have at least 1 employee, 50% private ownership and who did not have accounts blocked more than 30 days in the last 6 month period.
  • Amount: Up to HRK 750,000.00 (approx. EUR 100,000.00)
  • Interest rate: 0.25%
  • Grace period: Up to 12 months
  • Maturity: Up to 5 years including grace period
  • Collateral: Promissory note
  • Purpose: Working capital, including VAT. Prohibited for refinancing of existing loans/leases and payment of liabilities incurred prior to 2020

Contact Us

Reno Budic
Reno Budić
Managing Partner
Strategic Advisory