The Minister of Finance submitted a tax reform package with the main objective of simplifies the tax system On 27 October 2016, and those are given below:
Corporate income tax
The corporate income tax rate will be reduced from 20% to 18% and the lower corporate income tax rate of 12% will apply to small businesses. The business amusement expenses like expenses for gifts, holidays, sporting activities and recreation will be deductible up to 50% of the cost and currently the rate is 30%.
Personal income tax
The individual income tax rates will be reduced from 25% to 20% in the second tax schedule bracket and from 40% to 36% in the top bracket. A general personal payment of HRK 3,800 (currently HRK 2,600) per month will be approved to all taxpayers. In addition, incentives for parents with dependent children will be available in cities with an average city surtax rate of 12%.
