The VAT Entry Threshold Could Increase from 60,000 to 100,000 Euros

The threshold for flat-rate taxation of craftsmen, currently set at 60,000 euros, could be raised to 100,000 euros by the end of the year, unofficial sources report.

This is one of the more significant announcements coming from the relevant ministry, which, alongside this new development, is intensively analyzing how to exit the energy subsidies that have been in place for five years.

According to available public data, small and medium-sized enterprises have a capital surplus of 250 million euros due to these subsidies, exactly the amount they utilize for energy subsidies. Regarding small businesses, energy constitutes about 10 to 15 percent of their total costs. These reportedly include restaurants, hairdressers, and similar activities where the total energy cost represents a very small portion of overall expenses.

From the Ministry of Economy, we learned that assistance measures for electricity, gas, and heating prices through district heating will not be abolished, but that ‘some’ will no longer be able to use them. The government is analyzing how to exit energy subsidies, and a source from the ministry assures that assistance will remain for the most vulnerable. With the complete abolition of measures, the electricity bill for the average household would increase by about 100 euros, and the gas bill by 85 euros. By the end of the month, we will know what the subsidies will look like.

Current energy subsidies are also problematic because companies have a capital surplus in their accounts, often municipal companies, and this is one of the reasons why the Ministry states that they must exit these measures as they stimulate increased consumption.

Limiting the Sale of Chilled Alcoholic Beverages

The Ministry of Economy will also amend the Trade Act by the end of the year to allow for significant restrictions on the sale of chilled alcoholic beverages. Unofficially, we learn that the law will stipulate that cities and municipalities can determine in which areas and exclusively at what times stores and kiosks can sell cold alcoholic beverages.

For example, you can currently buy cold beer at any kiosk, store, or gas station. In the future, this will no longer be possible, meaning they will need a special permit from the city or municipality. The same applies to the times when cold alcoholic beverages can be sold. For instance, a tourist destination or city that has a problem with all-night drinking by tourists may, for example, prohibit sales after 5 PM, or earlier or later.

– City centers will no longer look as they currently do at night due to drunkenness. Such purchases are not possible in some other countries either. You cannot buy alcohol at a kiosk or gas station at a ski resort in Austria – says a source from the ministry.

This will also apply to large retail chains, which will also depend on the decisions of the cities.

Penalties for Energy Inefficient Buildings

A significant new development awaits all co-owners in buildings by the end of the year. Amendments to the law will introduce penalties for buildings that are energy inefficient, such as those with poor facades. The general idea is that a building can ‘buy and sell’ carbon dioxide emissions, as is currently the case for companies. An efficient building could sell its share to one that is not. The inefficient building would earn, while the poor one would pay penalties.

Great attention will be directed, with the help of FZOEU, towards promoting the energy renovation of buildings because the best energy, they say, is the one that is saved. There will reportedly be penalties, but also rewards for this.

Changing Laws, Attracting Investors

Regarding the Procurement Act and the recent controversy with HUP, it is moving very quickly to the Parliament, ‘and it would not hurt Ms. Weber to come out publicly with accurate data,’ says an anonymous source.

Many laws are changing, from the electricity market being aligned with EU practices, one of which is the law on the radioactive waste disposal center. This is one of the more important matters for the Ministry of Economy, considering that Croatia has taken on obligations under an international agreement for the acceptance of radioactive waste in 2028.

As for directing investors and entrepreneurial zones, they are directed to areas where the availability of space in business zones can be seen. Every time an investor approaches them, and all those who want to produce in Croatia, the doors of the Ministry are open to them.

– This is a very custom made approach, and investors are approached individually and given significant support; there are many such projects in the pipeline that the Ministry will be happy to announce as soon as possible. We will strive to bring as many such investors to Croatia as possible and to ensure they offer the best wages – conclude the ministry.