VAT (PDV)

Tax VAT(PDV) in Croatia is 23% and affects payments made on all goods and services except bread, milk, books, and various charitable enterprises. Employers are required to report, withhold and pay authorities all taxes and contributions on behalf of employees for their incomes. Personal income tax on an employee's salary is determined at the following rates: 12% for a net income up to 3 200kn, 25% for the difference between net 3 200kn and 8 000kn and 40% for net income between 8.000kn and 22 400kn. Thresholds for tax rates are variable, meaning that the law determines them on the basis of the deductions allowed, an amount that changes once a year. City surtax is applicable; Zagreb residents are taxed 18%. 20% of social contributions are withheld from the employee's gross income and the employer pays an additional 17.20%. The minimum start-up capital for a limited liability company is the counter value in kunas of 20 000kn. A foreign founder deposits the capital into a temporary account with an authorized business bank. Once the company is Croatian registered business, the founder can freely transfer such funds into regular company accounts.