Vacation Vouchers: It’s a Shame That Employers and Employees Do Not Take Advantage of This Opportunity

Another non-taxable income that employers in private companies have the option to pay, which would be beneficial for a large number of citizens given the ongoing inflation for the upcoming summer holidays, concerns vacation vouchers. In addition to the holiday allowance, also a non-taxable part of income that we have already written about in Lider, many employees (and some employers) are not even aware that during the summer months they have the option to receive so-called vacation vouchers.

What is it actually about? Vacation vouchers are better known to the public as ‘Croatian tourist cards’, a project introduced in 2020 during the coronavirus pandemic by the Government of the Republic of Croatia and the Ministry of Tourism and Sports, with the intention of increasing the spending of Croatian citizens in hospitality and tourist services throughout Croatia. The initial idea was for employers to provide their employees with additional income that they could use in domestic tourism, but as Vladimir Nol, director of the Tax Consulting Department at Mazars, states, the idea has not yet come to fruition in practice.

– The non-taxable amount was introduced a couple of years ago, but the vouchers have not yet taken off in practice as we had hoped. Initially, there were many ambiguities regarding certain aspects of the entire model, so it is understandable that there was not immediately significant resonance in practice. However, all problems seem to be resolved, so we currently do not see any obstacles to expanding this model. It is a shame not to take advantage of such opportunities – says Nol.

The purpose of such vouchers has been widely debated, and last year, according to reports from Hina, rumors emerged that they were not accepted anywhere, which was then denied by the Ministry of Tourism and Sports.

– The whole idea is for workers to open a special account at a bank, the employer deposits the non-taxable amount into that account, and the worker spends the deposited funds on tourist services such as accommodation, food and drink consumption in hospitality establishments, services from travel agencies and tour operators, package deals, etc. – says Nol.

The voucher can therefore be spent in restaurants, cafes, hotels, camps, tourist agencies, and even for charter services, i.e., boat rentals, but on the sole condition that the establishment accepts card payments. With the tourist card, discounts can be obtained at 72 establishments in Istria, 16 in Dalmatia, at ten locations in continental Croatia, and only one in Gorski kotar. Mostly, these are accommodation facilities, but there are also hospitality ones.

Accessing Vouchers at Two Banks

Such cards, through which employees can receive up to 331.81 euros in one year, are issued for a period of four years, and as can be read on the Croatian Tourist Card website, every craftsman and self-employed person can also pay the same amount for the same purpose to their workers and themselves. Likewise, farmers and freelancers, such as artists, athletes, journalists, translators, lawyers, scientists, writers, and many others, are entitled to the Croatian Tourist Card.

The Croatian Tourist Card, or voucher, is currently offered by two Croatian banks. Hrvatska poštanska banka, as well as Podravska banka, charge a fee of 6.64 euros, or 50 kuna, for opening a CRO Visa card.

However, the tourist card cannot be used for online payments, nor can cash be physically withdrawn or deposited onto it. Additionally, employers do not order the cards; instead, employees independently choose the bank where they will open an account related to the Croatian Tourist Card, as stated on the official websites. Employees, on the other hand, have the option to independently add money to the card and spend it.

A Range of Other Income

Options for paying vacation vouchers for employees in private companies do exist, but the decision on whether to pay vouchers or not, and to whom, is made by each employer individually. Although vouchers in the form of a tourist card were primarily intended to encourage spending by domestic tourists in Croatian destinations, from the employers’ perspective, many of whom struggle with attracting and retaining workers, they offer an additional opportunity for paying non-taxable income and are a benefit for employees.

Nol notes that employers also have a range of other non-taxable amounts that tax regulations offer, which they can pay to their employees. These include, in addition to the mentioned allowances and vacation vouchers, rewards for work results (up to 995.43 euros annually), contributions to voluntary pension insurance (up to 796.44 euros annually), and supplementary and additional health insurance (up to 331.81 euros annually).