Government Presents Tax Reform

zravko-maric31 October 2016, VG Intelligence Weekly Issue 28

During the Government cabinet session, Minister of Finance Zdravko Maric presented guidelines of the Government’s first reform to be implemented – tax reform. The goals of the reform are to reduce the overall tax burden, foster competitiveness, and simplify the tax administration. The profit tax rate will be reduced from 20% to 12% for farmers, craftsmen and SMEs with an annual income below €400,000, while the profit tax rate for other categories of taxpayers will be reduced from 20% to 18%. The income tax rates will be reduced from 25% to 24%, and from 40% to 36%. The value-added tax (VAT) rate is to be reduced from 25% to 13% for certain products and services (such as agricultural production inputs, electricity supply, garbage collection, etc.), while for hospitality industry services, sugar and movie tickets the reduced rate of 13% and 5% increases to 25% and 13%. Starting from 2018, only two VAT tax rates would apply in Croatia – the general 24% and the reduced 12% VAT tax rates.  To implement the reform, 15 different acts should either be amended or new legislation adopted…

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