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Croatia
Individual - Deductions
Last reviewed - 02 January 2024The Croatian PIT Act prescribes the following personal allowances (i.e. non-taxable portions of income), special reliefs, exemptions, and incentives.
| Personal allowance, special reliefs, exemptions, and incentives | Tax resident | Tax non-resident |
| Personal allowances (i.e. non-taxable portions of income): | ||
| Personal monthly allowance: | ||
| EUR 560 | Yes | Yes |
| Monthly allowance for a dependent family member: | ||
| EUR 280 | Yes | (1) |
| Monthly allowance for dependent children: | ||
| First: EUR 280; second: EUR 392; third: EUR 560; etc. | Yes | (1) |
| Monthly amounts for a disability of taxpayer/dependent family member/dependent child: | ||
| EUR 168 | Yes | (1) |
| Monthly amounts for a taxpayer/dependent family member/dependent child if such individual has 100% disability on one basis and/or due to disability is entitled to the assistance and care of others: | ||
| Has 100% disability on one basis: EUR 560 | Yes | (1) |
| Amounts of mandatory health insurance contributions up to the amount of prescribed mandatory health insurance contribution, in case where taxpayer is not insured on a different basis. | Yes | Yes (limited to contributions paid in Croatia) |
| Donations made in Croatia for prescribed purposes up to prescribed level. | Yes | Yes |
| Relief for taxpayers in specific age groups: | ||
| Taxpayers up to 25 years of age do not pay 100% of their annual tax liability arising in connection with the portion of their income from employment in the lower tax bracket. | Yes | Yes |
| Taxpayers between 26 to 30 years of age do not pay 50% of their annual tax liability arising in connection with the portion of their income from employment in the lower tax bracket. | Yes | Yes |
| Relief for pension benefit recipients: | ||
| This category of taxpayers does not pay 50% of their annual tax liability arising in connection with the pension benefit. | Yes | Yes |
| Relief for taxpayers that have residence and reside in the territory of local self-government units classified in group I according to the development level as per the special regulation on the regional development of the Republic of Croatia and on the territory of the City of Vukovar established according to a special regulation on the renovation and development of the City of Vukovar: | ||
| This category of taxpayers does not pay 50% of their annual tax liability arising in connection the income from employment (other than pension benefit). | Yes | Yes |
| Exemptions for Croatian disabled war veterans and family members of killed, captured, or missing Croatian Homeland War veterans: | ||
| Individuals that have status of disabled Croatian Homeland War veterans do not pay income tax on employment income and pensions, in proportion to their established disability degree. | Yes | Yes |
| Members of the family of a killed, captured, or missing Croatian Homeland War veteran do not pay income tax on their family pensions or cash compensations up to the amount of the family pension. | Yes | Yes |
| Relief for supported areas and the City of Vukovar: | ||
| For taxpayers carrying out self-employment activities in the City of Vukovar area established according to a special regulation on the renovation and development of the City of Vukovar, employing more than two employees on indefinite-term basis where more than 50% of employees have residence and reside in the territory of local self-government units classified in group I according to the development level as per the special regulation on the regional development of the Republic of Croatia and on the territory of the City of Vukovar established according to a special regulation on the renovation and development of the City of Vukovar are relieved from taxation in respect to income realised from these activities. | Yes | Yes |
| For taxpayers carrying out self-employment activities in the territory of local self-government units classified in group I according to the development level as per the special regulation on the regional development of the Republic of Croatia, employing more than two employees on indefinite-term basis where more than 50% of employees have residence and reside on the territory of local self-government units classified in group I according to the development level as per the special regulation on the regional development of the Republic of Croatia and on the territory of the City of Vukovar established according to a special regulation on the renovation and development of the City of Vukovar, assessed tax in respect to income realised from activities carried out in those areas is 50% reduced. | Yes | Yes |
| Employment incentives: | ||
| Taxpayers who carry out self-employed activities may have their income from the self-employment activities realised in the tax period additionally reduced by the amount of: | ||
| Wages and social contributions paid on wages of certain categories of new employees for a full year as of the start of their employment. | Yes | Yes |
| Wages and social contributions paid on wages of certain categories of new employees for a period of three years as of the start of their employment. | Yes | Yes |
| State grants for education and training as well as grants for practical classes and apprenticeship for crafts. | Yes | Yes |
| Incentives to research and development (R&D): | ||
| Taxpayers carrying out self-employment activities may have their income from the self-employment activities in the tax period additionally reduced by the expenses for R&D, in accordance with a special regulation that regulates state aid for R&D projects. | Yes | Yes |
Notes
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European Union (EU)/European Economic Area (EEA) member state tax resident can increase one's basic personal allowance on the basis of dependent family members. However, for this increase to be available, income included in the process of annual assessment of tax liability needs to:
- represent at least 90% of the taxpayer’s total (worldwide) income realised in the given tax period, and
- be exempt from taxation or tax-free in the country of tax residence that is different from Croatia.
Some of the outlined items can be used only via the process of annual tax liability assessment while others can be used for calculating income tax prepayments as indicated in the Income determination section.
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