COVID-19 Croatia Update

Croatian Government Proposes the April Financial Package

Last Updated on 3 April 2020 15:00 CET

The Croatian Government proposed the second package of economic measures on 2 April, aimed to preserve jobs and reduce liquidity risks caused by the COVID-19 financial crisis in the private sector.

Starting with April, the salary amount financed by the Croatian Government will be increased to an amount of HRK 4,000 (approx. EUR 530), while the measure itself pertains to salaries for March, April, and May. Businesses that submitted the application for this measure until 5 April will receive salaries pertaining to the entire three-month period, while applications submitted until 5 May will apply to salaries pertaining to April and May. Consequently, applications submitted until 5 June will apply only to the salary for May.

The costs of public fees (state pension and health insurance) related to the stated amount of financed salary will also be covered, which brings the total amount of state financing to HRK 5,640 (approx. EUR 750) per employee.

In addition, the new measures will allow a release of tax payment obligations pertaining to profit tax, personal income tax, and public fees to entrepreneurs affected by the COVID-19 epidemic. Businesses with a decrease in revenues of more than 50 percent in comparison to the same period of the previous year and with previous year revenue lower than HRK 7.5 Mio (around EUR 1 Mio) will be granted a release of the stated tax payments for April, May, and June. On the other hand, businesses with acquired revenue of more than HRK 7.5 Mio will be granted a release in the amount pro-rated to the percentage of their fall in revenues (e.g. revenue fall of 60 percent will correspond to a release from 60 percent of tax payment obligations amount).

Businesses with a fall of revenue ranging from 20 to 50 percent in comparison to the same period of last year will have the option of a three-month deferral and possibility of a payment in instalments without interest, which is already enacted as part of the March package. Those businesses with a revenue fall under 20% are considered liquid enough to survive the crisis without intervention.

In addition, it is announced that VAT payments will become due upon invoice collection, and not upon its issuance as was the case until now. The deadline for submission of annual financial reports will be prolonged until 30 June and in relation to 2019 onwards will be cost-free.

Also, in order to provide solidarity, cuts are announced in the public sector, which will be subject to further discussion with trade unions and other stakeholders.

These measures are currently under discussion in the parliament and are supposed to be enacted beginning of next week.


The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.