Last reviewed - 02 February 2021

Croatia, a parliamentary republic in Central Europe that sits along the Adriatic Sea, is bordered by Slovenia to the north, Hungary and Serbia to the east, and Bosnia and Herzegovina and Montenegro to the south. Croatia is divided into 20 counties and the city of Zagreb, which is also the capital of Croatia. The official language of Croatia is Croatian, and the currency is the kuna (HRK).

Croatia was part of the Austro-Hungarian Empire until the end of World War I. In 1918, the Croats, Serbs, and Slovenes formed a kingdom known after 1929 as Yugoslavia. Following World War II, Yugoslavia became a federal social independent state. Croatia declared its independence from Yugoslavia in 1991.

On 1 July 2013, Croatia became the 28th European Union (EU) member state.

According to the first estimate for 2019, the gross domestic product (GDP) is 2.9% higher than in 2018. In the last quarter of 2019, the real GDP was 2.5% higher than in the same quarter of 2018. The largest positive contribution to the GDP volume increase in the fourth quarter of 2019 was realised by household’s consumption expenditure and an increase in export of goods and services. 

The realised annual export growth rate for the first ten months of the previous year was 6.4% higher than in the same period of 2018, when it amounted to 4.6%. Therefore, one can still speak of a more dynamic growth of exports in 2019. In the first ten months of 2019, Croatia was among the EU member states that achieved higher rates of growth in commodity exports. Namely, only nine member states achieved more dynamic or equal growth. Such dynamics in Croatia were mostly influenced by the increased export of pharmaceuticals, motor vehicles, and motor vehicle parts, as well as other means of transport (i.e. ships). Some industries, however, recorded a significant drop in the value of exports, with the oil industry being the most prominent in 2019. In line with the recovery in domestic demand and exports, the value of total imports also increased by 5.6% annually. Imports of petroleum products, food products, and motor vehicles increased the most, while, due to falling prices and reduced processing of crude oil, the value of imports in mining and quarrying (crude oil, natural gas, and other ores) declined significantly. Under the influence of the described trends in exports and imports, in the first ten months of 2019 there was an increase in the trade deficit by 4.3% (i.e. HRK 2.5 billion) compared to the same period of the previous year. This, however, represented a positive shift from previous cumulative prior year periods (e.g. compared to half a year, when annual deficit growth was 9.9%).

In the first ten months of 2019, state budget generated total revenues of HRK 116.0 billion, which, together with total expenses of HRK 110.6 billion, created a budget surplus of HRK 5.4 billion. Compared to the same period of the previous year, total revenues increased by 8.1%, while total expenses increased by 7.6%, which resulted in an increase of the budget surplus by 18.8%. At the end of September 2019, public debt reached HRK 296.8 billion, which is HRK 12.6 billion or 4.4% more than at the end of September of the previous year. At the same time, domestic debt increased by 6.6% with a much more modest growth in external debt by 0.8%, which confirms the stronger orientation of the government on borrowing in the domestic financial market. This has positive implications on reducing the risks associated with the external borrowing. At the end of Q3 2019, general government debt stood at 74.9% of GDP, close to levels at the end of 2018. Based on the data available at the end of September last year and the data on bonds issued and repaid by the end of the year, it is estimated that positive developments in public debt continued in 2019, which will result in a continued decline in the public debt to GDP ratio by about 3% compared to the end of the previous year.

Following very strong growth at the beginning of the year, investment activity continued to decline in the third quarter of 2019 for the second quarter in a row. Capital investments increased by 5.0% annually. Monthly indicators on construction works on buildings and on other construction objects, whose annual growth rate was about 7.0%, indicate that not only the private sector but also the general government achieved growth in investment activity. 

Furthermore, favourable developments in the labour market marked the end of 2019. Quarterly employment growth accelerated in the fourth quarter. The number of employees increased the most in construction, information and communication activities, and trade. Employment has also seen an increase in industry after two consecutive quarters of its decline. The decrease in registered unemployment also accelerated in the last quarter of 2019. The decrease in the number of unemployed was equally affected by more pronounced deletions from the CES register and increased new employment. The lower number of unemployed persons also lowered the administrative unemployment rate from 7.8% to 7.3% of the workforce in the third quarter of 2019. The year-end was marked by a slowdown in nominal gross wage growth (0.4% versus 1.1% in Q3) due to a wage stagnation in the private sector, while public sector wage growth intensified. The annual consumer price inflation rate in December 2019 accelerated significantly, amounting to 1.4%, which is 0.7% more than in November.

In December 2019, as compared to November 2019, the prices of goods and services for personal consumption, measured by consumer price index (CPI), decreased by 0.1% on average. As compared to December 2018, that is, at the annual level, they increased by 1.4%, while on the annual average, they increased by 0.8%. Within the CPI, in December 2019, as compared to November 2019, the prices of goods decreased on average by 0.2% while the prices of services increased by 0.1% on average. 

Foreign exchange interventions of the Croatian National Bank mitigated the appreciation pressures on the exchange rate as a result of the surplus in the current account in the payment balance, capital inflows from EU funds, and reduction of euroisation. At the end of November 2019, the kuna/euro exchange rate was 7.44 EUR/HRK, which is 0.3% more than at the end of the same month in 2018, while the average exchange rate in the first 11 months of 2019 was 7.41 EUR/HRK and was almost equal to the exchange rate achieved in the same period of the previous year. The exchange rate of the kuna against the US dollar and the Swiss franc at the end of November 2019 was higher than at the end of the same month in 2018, reflecting the weakening of the euro against these currencies in the global financial markets.

The client base of PwC Croatia includes some of the largest Croatian and multinational companies in Croatia. We have more than 230 professionals in Croatia who are focused on providing innovative advice and solutions. Our teams of local and expatriate professionals have the skills and the experience in all areas of taxation, corporate and personal, direct and indirect, to help clients grow and develop.

Quick rates and dates

Corporate income tax (CIT) rates
Headline CIT rate (%)

18 (10% for companies realising less than HRK 7.5 million in revenues)

Corporate income tax (CIT) due dates
CIT return due date

Within four months of company's year end.

CIT final payment due date

Within four months of company's year end.

CIT estimated payment due dates

Monthly instalments paid by the end of the month for the previous month.

Personal income tax (PIT) rates
Headline PIT rate (%)

36% increased for municipal tax (levied at the rates ranging from 0% to 18%, depending on taxpayer's place of residence).

Personal income tax (PIT) due dates
PIT return due date

End of January or end of February, depending on taxpayer's circumstances.

PIT final payment due date

Generally, 15 days from the day of tax assessment receipt.

PIT estimated payment due dates

Dependent on the income type and taxpayer's circumstances.

Value-added tax (VAT) rates
Standard VAT rate (%)


Withholding tax (WHT) rates
WHT rates (%) (Div/Int/Roy)

Resident: 0 / 0 / 0 (corporate);

12 / 12 / 24 (individuals);

Non-resident: 12 / 15 / 15 (corporate);

12 / 12 / 24 (individuals);

For further information, see the Income determination section in the Individual summary and the Withholding taxes section in the Corporate summary.

Capital gains tax (CGT) rates
Corporate capital gains tax rate (%)

Capital gains are subject to the normal CIT rate.

Individual capital gains tax rate (%)

12% increased for municipal tax (levied at the rates ranging from 0% to 18%, depending on taxpayer's place of residence).

Net wealth/worth tax rates
Headline net wealth/worth tax rate (%)


Inheritance and gift tax rates
Inheritance tax rate (%)


Gift tax rate (%)


NA stands for Not Applicable (i.e. the territory does not have the indicated tax or requirement)

NP stands for Not Provided (i.e. the information is not currently provided in this chart)

All information in this chart is up to date as of the 'Last reviewed' date on the corresponding territory Overview page. This chart has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this chart, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.