New Tax Reform For Business Expenses In Croatia

Businesses that operate in Croatia must be aware of the new tax reform changes that have increased allowances for business expenses.

Name

Tax reform of allowances for business expenses

Jurisdiction

Croatia

Why now?

Daily allowance rates have increased for domestic business trips and new non-taxable allowances for employees have been introduced, starting 1 September 2019.

What's the business impact?

Businesses must be aware of these changes and how the rate increases could affect their books.

What to do now?

Employees must be notified of these changes by HR departments and the relevant policy documents must be updated.

Specifics

a). Daily allowance for domestic business trips

Duration

Daily allowance - valid for all trips until 31.08.2019.

Daily allowance - valid for all trips from 01.09.2019.

More than 12 hours

170 HRK

200 HRK

More than 8 and less than 12 hours

85 HRK

100 HRK

b). New non-taxable allowances

Type of allowance

Non-taxable amount

Fees to cover the costs of catering, tourism and other services intended for employees' vacation in accordance with the regulations of the Ministry of Tourism

Up to 2.500 HRK per year

Fees to cover the cost of accommodation and meals for employees

Up to 5.000 HRK per year

(no additional documentation needed)

Fees to cover meal costs incurred by employees during work with employer based on documentation

Up to 1.000 HRK monthly provided that the invoices are issued to the employer and are paid on non-cash basis. Non-taxable receipts are recognized for the month in which the meal is provided.

Fees to cover accommodation costs incurred by employees during work with employer based on documentation*

Up to the amount of actual costs, provided that the invoices for the accommodation services are issued to the employer and are paid on non-cash basis. Non-taxable receipts are recognized for the month in which the accommodation service was provided.

Compensation to cover the employee's costs for...