Tax for renters
In order to be able to rent an apartment, holiday house or luxury villa in Croatia, you must first obtain a Decision on approval for the provision of catering services in the household - Categorization. Read more how to get a Categorization with detailed instructions on our blog here. After the categorization is done, you can start renting out your accommodation, but then you will also have tax obligations. Based on the activity of renting tourist facilities, renters - citizens of the Republic of Croatia are considered liable for income tax and, in certain cases, VAT.
Citizens of the Republic of Croatia can be flat-rate Renters or Renters who must keep business books.
Renters - flat rates
The taxpayer to whom the annual income tax is determined in a flat amount is the lessor on the basis of renting apartments, rooms and beds to travelers and tourists and organizing camps and/or camp-resorts and accommodation units in facilities for Robinson accommodation if the lessor rents apartments, rooms to travelers and tourists and beds, of which the owner is a maximum of 20 beds or beds, and/or to organize a camp on his land with a maximum of 10 accommodation units, i.e. up to 30 guests at the same time and/or to organize accommodation in a Robinson accommodation facility with a maximum of 10 accommodation units that is, up to 30 guests at the same time.
Obligations of flat-rate renters:
- Pays flat tax based on the decision issued by the competent Tax Administration quarterly, until the end of each quarter (31.03., 30.06., 30.09. and 31.12.). The amount of the tax is determined by the local self-government, which is why different flat taxes are paid in different cities and towns.
- Pays the residence tax in a flat amount. The residence tax is calculated according to the number of beds and depending on the class of the tourist resort. The fee is paid for the current year, and the renter is obliged to pay it by January 15. also submit the T2 form.
- Pays VAT on the service of taxpayers from the EU and third countries (Airbnb, Booking.com, etc.). The lessor is obliged to calculate and pay Croatian VAT (25%) on the service received. The deadline for submitting the form is until the 20th day of the current month for the previous month, while the obligation to pay VAT is until the last day of the current month for the previous month (eg until the end of July for June). For this reason, it is best for all renters to contract an booking service with a local tourist agency such as the Home Rent agency.
- Registers guests in e-visitor and issues invoices to guests. The flat-rate lessor is obliged to issue invoices. The invoice must have the following elements: 1) Number and date of issue, 2) Name and surname, address and personal identification number of the renter, 3) Name and surname of the guest, 4) Quantity and name of delivered services, 5) Total amount of compensation, 6) Note: " exempt from VAT according to Article 90. paragraph 2. of the VAT Act".
- The limit for entering the VAT system for renters is HRK 300,000.00 or EUR 39,816.84
Lessors – obliged to keep business books
Income tax on the basis of renting apartments, rooms and beds to tourists and organizing camps based on business books will be determined by the lessor who organizes accommodation for more than 10 people/20 beds, or - organizes a camp on his land with more than 10 accommodation units/for more of 30 guests, or - organizes accommodation in a Robinson accommodation facility with more than 10 accommodation units/for more than 30 guests at the same time, which is liable for VAT or enters the VAT system. As we have already said, the limit for entry into the VAT system is HRK 300,000.00 or EUR 39,816.84.
Renters who cross the threshold for entry into VAT during the season immediately lose their status as Flat-rate Renters and are required to issue invoices with the calculated VAT amounting to 13% and submit reports to the tax administration by the 20th of the current month for the previous month, and pay VAT by the end of the month current month for the previous month.
The obligations of this lessor are:
- Pay income tax: A) 20% up to HRK 360,000.00 (EUR 47,780.28) per year B) 30% above HRK 360,000.00 (EUR 47,780.28) per year
- Calculate and pay VAT in the amount of 13%
- Pay the residence tax