Civilian draftees cannot be reimbursed for transportation costs to work

The only costs that can be paid to a draftee tax-free by the institution, organization, or agency where they serve their civil military service are the costs of official travel. Only health insurance and occupational safety are mandatory.

Written by: mr. sc. Marija Zuber, advisor-editor at the magazine Accounting and Finance
[email protected]

Civilian military service in Croatia has ‘taken root’. A novelty from a few years ago, it is now a form of fulfilling military obligations that more and more young men are choosing, exercising their right not to perform military duties in the armed forces due to religious or moral beliefs. Although the Civil Service Act was adopted in 2003, there are many unknowns and uncertainties, especially regarding where civilian draftees can ‘serve’ their military service and what obligations exist towards them. According to the Regulation on determining legal entities and bodies in which civil service is performed in the Republic of Croatia, civil service is performed in state bodies and bodies of local and regional self-government units, as well as in legal entities that carry out scientific, educational, upbringing, cultural, sports, social, health, sanitary, and humanitarian activities, which are not established for profit.

Civil service can also be performed in associations that have been operating for at least three years in the field of promoting and protecting human rights, health protection and improving the quality of life, caring for persons with disabilities, caring for children, environmental protection and sustainable development, social care, youth activities, democratization, and the development of civil society and culture, but on the condition that the association has business premises, at least two employed persons, a program implemented in the local community, and clear financial operations. When determining the legal entities in which civil service can be performed, care must be taken that the civil draftee does not jeopardize existing jobs or hinder the employment opportunities of unemployed persons in the respective legal entity. The rule is that the civilian draftee performs civil service in the place where they reside, and if that is not possible, then in the place that is closest to their residence. During the performance of civil service, the civilian draftee generally performs tasks that correspond to their knowledge, qualifications, and preferences, and they must not perform civil service in the legal entity where they were employed before being sent to civil service or where they worked one year before being sent to serve civil service.

On overtime without objection

The civilian draftee is obliged to perform tasks according to a specific schedule determined by the responsible person of the institution or organization where they serve civil service. If the needs of the job require it, they are obliged to work in shifts, at night, on Saturdays and Sundays, and in case of need, they are obliged to work overtime. Civil service lasts eight months, with every eight hours counting as one day of civil service. The civilian draftee generally performs tasks related to their education and professional training, often the same or similar tasks performed by persons in employment in the organization where they serve. The difference is in the employment status, as the draftee is not a person in employment, has no right to salary or other monetary and social rights arising from employment. Labor law regulations apply to them only in the part relating to occupational safety, the right to protective clothing, work schedule (the right to weekly rest), and similar. They have no right to annual leave, but they have the right to leave for a duration of 15 days, and due to special efforts, they may also be granted a reward leave of up to ten days. In the case of marriage, the birth of a child, taking an exam, or the death of a close family member, extraordinary leave may be granted, with the decision made by an authorized person.

Work experience is suspended

In terms of social rights from employment, serving civil service is equated with fulfilling military obligations, and according to the law, during military service and during civil service, rights and obligations from employment are suspended. Thus, if the civilian draftee was in employment before being sent to civil service, their rights and obligations with the employer they were employed with before civil service are suspended during the civil service. If they wish to continue working with the employer they were employed with before being sent to serve civil service, they are obliged to notify the employer no later than one month after the end of military obligations.

The period spent in civil service is not counted towards pensionable service. Even if they had an interest and the possibility to be registered as an insured person in the records kept by the relevant pension insurance authorities during the civil service, and contributions for mandatory insurance were paid for them, the time spent in civil service cannot be counted towards insurance service. However, they are mandatorily health insured, have the right to health protection, but due to incapacity to perform civil service caused by illness, they have no right to salary compensation. In the case of illness, worsening of illness, or work injury occurring during civil service, the civilian draftee obtains rights from health insurance according to the regulations governing the rights of persons serving military service in the Armed Forces of the Republic of Croatia.

Unjustly omitted

The civilian draftee serves their term in organizations that are not established for profit but are non-profit organizations in terms of tax regulations. Consequently, although they are not a person in employment, and due to the fact that they do not receive any compensation for work performed within the scope of civil service, that organization can reimburse them for official travel expenses as a tax-free income. However, transportation costs for commuting to and from work cannot be reimbursed tax-free, even though they are obliged to arrive on time at the organization where they perform tasks just like employees who are employed there.

If a non-profit organization reimburses the civilian draftee for commuting costs, that payment is, in tax terms, equated with the payment of other income, subject to mandatory insurance contributions, income tax, and possible surtax. However, in that case, by receiving other income, the civilian draftee loses the status of a person to whom the non-profit organization does not pay any monetary compensation, and thus they cannot be reimbursed tax-free for official travel expenses either. The exception is transportation and accommodation costs on official travel, which non-profit organizations can reimburse as tax-free income for persons receiving compensation, but on the condition that the transport invoice and accommodation invoice are issued to the institution or other legal entity where the person serves civil service.