Passed ‘Extra Tax’

The Croatian Parliament passed on Friday at an extraordinary session the Law on Additional Profit Tax under which companies with increased profits will become taxpayers of this tax regardless of the activity they perform.

A total of 96 representatives voted in favor of introducing the ‘extra tax’ while 37 representatives voted against it.

The new levy will be paid by companies that had an annual income exceeding 300 million kuna in 2022, at a rate of 33 percent, but only on profits exceeding 20 percent compared to the four-year average.

The tax is one-time, and the collected funds will primarily go to support end energy customers, especially vulnerable households, so the additional profit tax has an element of solidarity contribution.

Several financial laws were passed, including amendments to the Law on Credit Institutions to ensure that from January 1, 2023, the European Central Bank can supervise credit institutions in Croatia.

The Law on Income Tax was also amended so that salaries no longer have to be mandatorily paid into a current account. Namely, salaries can now be paid into a current account, while all other income can be paid into a giro account.

The tax administration system is now connected in such a way that this is not necessary, and due to the relief of citizens and entrepreneurs who now have to have two or more accounts, this obligation is abolished, and payments can be made to any account the citizen wishes.

The Parliament also adopted two laws that create the conditions for the application of the Schengen legal acquis in Croatia after Croatia became a member of the Schengen area, amending the laws on foreigners and on the supervision of the state border.

Since the entry into force of the Schengen Implementation Agreement, the current Croatian state border with third countries becomes the external border of the European Union.

From the New Year, 73 border crossings will be abolished

As of January 1, 2023, border controls at Croatia’s land and maritime borders with Schengen countries, namely Slovenia and Hungary, will be abolished, and from March 26 of the following year at airports.

From the New Year, a total of 73 border crossings towards Slovenia (58) and Hungary (15) will be abolished.

– For all citizens of Croatia, this means that they will no longer have to show documents when crossing the border – said the Minister of the Interior Davor Božinović earlier in Parliament.

And while border controls at land and maritime borders with Schengen countries will be abolished on the first day of 2023, border controls at airports will be abolished on March 26 of the following year.

The difference in dates is due to the fact that winter and summer flight schedules have been established at the international level, explained Božinović.

At the moment of the change from one flight schedule to another, all flights that are currently flights to Schengen member states become flights within that area.

Thus, the same rules apply as for all other domestic flights; from March 26, the same procedure applies whether flying to Dubrovnik or Amsterdam, he said.

A package of laws related to healthcare reform has been sent for a second reading.