Marija Zuber: Apartment landlords are exempt from paying the second installment of the flat-rate tax

Citizens renting rooms, apartments, and accommodation units in camps and Robinson-style accommodation to tourists conduct this activity in accordance with the Hospitality Services Act. They do not need to register a business; they operate based on the approval of the relevant economic office. In special circumstances caused by the SARS-CoV-2 virus epidemic, the state has eased their tax position regarding the obligation to pay the annual flat-rate income tax and tourist fees. The obligation to pay the tourist membership fee for 2020 has not yet been reduced for them.

Citizens renting rooms, apartments, and accommodation units for tourist purposes are not VAT payers as long as their deliveries in the previous or current year do not exceed 300,000 kuna. If they meet this condition, they pay income tax in a flat amount determined by the local unit in whose area the rental facility is located.

No application is submitted

The representative body of the local unit decides on the amount of the flat-rate income tax per bed, accommodation unit in the campsite, and accommodation unit for Robinson-style accommodation, with the annual tax not being less than 150 kuna and not more than 1500 kuna per year per bed and accommodation unit. This amount increases by a surtax if prescribed by the decision of the local unit where the rental facility is located. The Income Tax Act stipulates a rule that the local unit cannot change the tax amount during the year for that year. The decision on the amount of the annual flat-rate tax can be changed until December 15, and this new decision applies from January 1 of the following year.

The flat-rate income tax is an annual tax, paid quarterly, in four installments due on the last day of the quarter (March 31, June 30, etc.). Like other taxpayers, landlords could request a deferral of income tax payment for three months from the Tax Administration at the beginning of the declared epidemic. Those who requested it and provided that their deferral was approved, postponed the obligation to pay the first annual tax installment from March 31 to June 30, without late interest. If they did not request a deferral or it was not approved, the first installment of the annual tax for 2020 was due on March 31, 2020. For the second installment of the annual tax, which is due on June 30, 2020, all landlords who pay tax in a flat amount are exempted by the amendment to the Implementation Regulation of the General Tax Act published in the Official Gazette No. 43/20. No application is submitted for this exemption; it is applied automatically.

Lower tourist fee

The fiscal position of landlords has also been eased by measures related to the payment of the tourist fee (the new name for the accommodation fee). By the Regulation on the deferral or exemption from the payment of the tourist fee, published in the Official Gazette No. 36/20, persons providing hospitality services in households are exempt from paying half of the annual flat-rate amount of the tourist fee for the main bed and accommodation unit in the campsite, camping resort, and Robinson-style accommodation.

For extra beds, landlords are fully exempt from paying the tourist fee for 2020. Otherwise, for household accommodation, the annual tourist fee ranges from 350 to 1000 kuna per bed, and for accommodation in camps, camping resorts, and Robinson-style accommodation from 500 to 1000 kuna per year per accommodation unit. This measure reduces the fiscal obligation for landlords for 2020 by fifty percent per bed/accommodation unit or completely cancels it for extra beds.

Membership fee remains the same

Flat-rate landlords from January 1, 2020, also pay the tourist membership fee in an annual flat amount. For each bed in a room, apartment, and house, the annual membership fee is 45 kuna, and for each accommodation unit in a campsite, camping resort, and Robinson-style accommodation, eighty kuna per year. For extra beds, the membership fee is set at fifty percent of these amounts. The annual flat-rate membership fee can be paid in a lump sum (in which case it is due on July 31 of the current year) or in three installments (due on July 31, August 31, and September 30).

Since the measures of the Government of the Republic of Croatia regarding operations under special circumstances relate to fiscal obligations due by June 20, 2020, they do not cover the tourist membership fee paid by landlords. If the regulation is not amended by then, the obligation is due on July 31, and for installment payments, the last installment is due on September 30, 2020.

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