Croatia to reduce standard VAT rate in 2020

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Last Friday, July 26, 2019, the Prime Minister of Croatia Andrej Plenkovic and the Finance Minister Zdravko Maric, presented the latest tax reforms, among which there are some VAT rate cuts, which would reduce tax burden by HRK 3.75 billion (EUR 500 million approximately).

One of the reforms is to reduce the VAT rate in the hospitality industry for food preparation and serving to 13%, matching the already reduce VAT rate for hotel accommodations. The current rate for Food & Beverage in hotels is 25% (1).

Besides, at was previously announce (2), the standard VAT rate will be reduced by 1%, from 25% to 24% from January 2020.

Among others tax reforms we can mention the proposal to reduce income tax by 100% to people under 25 year-old and by 50% to those between 26-30 years and a tax on soft drinks.

If you believe these developments impact your business and would like further advice on your next steps do not hesitate to contact us.

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