Last Updated on 27 March 2020
The Croatian Government enacted detailed rules on the possibility to apply for deferred payment of taxes. This measure includes income and profit tax, public fees (includes pension and health insurance, concession fees but not custom fees and excise duties) as well as VAT (under certain conditions).
Businesses wishing to be granted deferred payment of the stated tax and public fees must fulfil the following conditions:
- no due tax debt exceeding the amount of HRK 200 (approx. EUR 25);
- decrease in revenue of more than 20% in the month preceding filing for deferral in comparison to the same month of the previous year or a projection that in the next three months revenue will decrease more than 20% in comparison to the same period of the previous year; and
- in relation to deferral of VAT payments, the entrepreneur’s provision of goods and services in the previous year may not exceed the VAT net amount of HRK 7.5 Mio (approx. EUR 1 Mio).
In case a business fulfils the above-stated conditions, payment of the stated taxes and public fees will be deferred for a period of three months following the due date of each obligation, without applying any interest rate. In case of a longer duration of the COVID-19 pandemic, the stated period may be prolonged for an additional three months and the deferral may encompass tax obligations that became due in the duration of the additional three-month period.
In case businesses are not able to fulfil the deferred tax obligations upon their (prolonged) due date, they will be able to file a request for payment in instalments. The Tax Administration may allow up to 24 instalments, without applying any interest rate. Such a request may be filed to the Tax Administration in the period of five days following the due date of the tax obligation the entrepreneur is not able to fulfil.
In addition, the Croatian Agency for SMEs, Innovation, and Investments introduced several measures with the aim to assist businesses in maintaining liquidity. Such measures include a deferral on all instalments on current loans granted to small and medium enterprises until 31 December at least and providing guarantees in the amount of 80% of the principal amount of loans used for maintaining liquidity (with the maximum amount of EUR 1 Mio) which are provided by 16 financial institutions.
Also, the stated agency is introducing a new loan (“COVID-19 loan”) for providing working capital to small and medium enterprises. The maximum amount of such loans is EUR 25,000, the interest ranges from 0.5% to 1% and the duration of the repayment period is set to three years, with a possible one-year deferral.
On its session of 26 March the Croatian Government announced new measures will follow during the course of next week which, according to government sources, might include temporary amendments to the Croatian Labor Act that will allow employers to define certain aspects of employment unilaterally during the COVID-19 epidemic.