Exploring: What Entrepreneurs Can and Cannot Do Right Now

Uncertainty and confusion are two key words these days in the business world. Uncertainty is still positive – the only certain future is for those companies that have already been extinguished by the wave of the coronavirus. Just this Monday, as many as 70 of them disappeared. Most other entrepreneurs live in uncertainty, which is exacerbated by total confusion. Often, the interpretations of strict epidemiological measures are unclear, ranging from the very move to very free interpretations by various interest groups and the media. Thus, among the hygiene regulations in hair salons, an illegal ban on holding (and reading) newspapers has entered as fake news, which is neither in the measures of HZJZ nor has there been any case in the world of virus transmission through newspapers.

A special chapter in the whole confusion relates to the measures from state support packages. Will I lose the right to support of 4000 kuna per employee if I dismiss someone? What if an employee resigns? Can I, as a user of monthly support, pay out a non-taxable severance? Am I allowed to pay out profits for this year if I have used support measures?

These are just some of the questions posed by support users. The basic dilemma for entrepreneurs is what (not) to do to avoid losing the state ‘boost’. They do not know how to balance their options and state ‘aid-eliminators’. How heated this topic is has been shown by the response to the survey on this topic on Lider’s website.

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Just as restaurateurs and other ‘prisoners’ realized that they would not lose support if they opened their establishments, new doubts arose. To the question of what entrepreneurs fear the most, we received as many as 1132 responses by this Wednesday, which is a relevant number for complex public opinion surveys. The greatest fear is of losing monthly support in the event of dismissals. And that entrepreneurs are not just playing ‘bunker’ is shown by the ‘second-placed’ dilemma – can monthly support be obtained for creating new jobs? Unfortunately, the answer from tax expert Marija Zuber to that offensive question is negative.

As a consultant, she certainly sees the great confusion that reigns in the interpretation of new regulations. She provided Lider with comprehensive answers to ten key questions related to obtaining state support, or the possible loss of some measures. No one loses the right to monthly support with one or two dismissals. An entrepreneur with ten employees loses the right to ‘4000 kuna’ if they have made five dismissals (more than 40 percent), but one who had 11 employees loses support after signing the third dismissal (more than 20 percent). Severance pay for annual leave and all other non-taxable rewards can be paid out and are not in conflict with receiving support.

For those companies hoping to operate in the black by the end of the year, the good news is that as support users, they will be allowed to pay out profits for 2020. Marija Zuber warns that Croatian provisions in this regard differ from the conditions in other European countries, which can be a useful signal for foreign multinationals operating in Croatia to report higher profits here this year, rather than in their home country.

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