Profit tax
Croatian companies pay profit tax at 10% or 18%. The lower rate applies to companies with annual revenue up to EUR 1,000,000; the higher rate applies above that. The tax base is accounting profit adjusted under the Profit Tax Act.
VAT
The standard VAT rate is 25%, with reduced rates of 13% and 5% for certain supplies. A company must register for VAT once its taxable supplies exceed EUR 60,000 a year. It can also register voluntarily, and then stays in the system for at least two years.
Even a company outside the VAT system usually needs an EU VAT identification number if it buys or sells services across borders. We check this at the start.
Taking profit out
Dividends paid to individuals are subject to 12% income tax, withheld when paid. For non-resident members, the rate can differ under a double tax treaty between Croatia and their country of residence.
Director's pay
A director who works for the company is normally employed and paid a salary, with social contributions and income tax. The right setup depends on the director's residence, other employment and insurance position.
E-invoicing (Fiscalisation 2.0)
- Since 1 January 2026, VAT-registered businesses established in Croatia must issue, receive and fiscalise e-invoices for domestic B2B transactions.
- Businesses outside the VAT system must already receive e-invoices and must start issuing them from 1 January 2027.
- Invoices to consumers remain under the existing fiscalisation rules.
Sources: Croatian Tax Administration; published analyses of the 2024 and 2025 tax changes and the Fiscalisation Act.