A NEW LAW ON TOURIST CONTRIBUTIONS EXEMPTS IT COMPANIES AND IMPOSES OBLIGATION TOWARDS BANKS

Crowe Croatia
6/5/2019
The New Law regarding Tourist Contributions which enters into force on January 01, 2020 has been published in the Official Gazette no. 52 as of May 22, 2019. This Law prescribes a new method of tourist contribution calculations as well as new tourist contribution levels.
The basis of the Law identifies activities for which tourist contributions are payable and eliminates the previous method of division into simplified sales activities and other activities module. From this new timeframe all activities will be divided into five groups.
Banks will also be obliged to pay tourist contribution for income from bank commissions and fees at the tourist contribution rate prescribed or the second group of activities. Furthermore, from January 01, 2020 distinct types of activities will no longer be obliged to pay tourist contributions, such as:

• Accounting, Bookkeeping, Audit and Tax consulting (69.2)
• Computer programming, Computer consultancy and related activities (62)
• IT services (63)
• Translation services (74.3)
• and other

Rates for calculation and payment of tourist contribution will no longer be determined based on both groups and tourist classes, but in accordance with five groups as follows:

1st group: at rate of 0.16150%
2nd group: at rate of 0.12920%
3rd group: at rate of 0.09690%
4th group: at rate of 0.03230%
5th group: at rate of 0.01938%

Legal entities and individuals performing activities in certain areas (I - IV development group of the local self-government units) will pay 20% lower tourist contribution. As the new Law is applicable from January 01, 2020 all monthly instalments for 2019 as well as the annual tourist contribution calculation for 2019 should be made in accordance with the old Law.