Analysis

New round of tax cuts announced in Croatia

A new round of tax cuts in Croatia will lift a burden amounting to a total 10 billion kuna (1.3 billion euros) from taxpayers, while the share of public debt has been reduced from 80.6 per cent to 74.5 per cent.

Under the new measures, young people up to 25 years old will be totally exempt from paying income taxes, while those aged from 25 to 30 will have their tax obligations cut in half.

The general value added tax (VAT) will be reduced from 25 per cent to 24 per cent, while the VAT for the hospitality sector will be cut to 13 per cent.

Furthermore, a 12 per cent rate applies to small and medium entrepreneurs whose annual income is less than 7.5 million kunas (1 million euros).