Croatian corporate income tax in 2026: what your company really pays

Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad

You are weighing a Croatian d.o.o. against a craft, or you already run one and want to know the 2026 bill. This guide covers the rates, the tax base, withholding and filing dates. It also explains the residence trap for founders who manage a foreign company from Croatia.

Croatia corporate income tax in 2026: the key figures

What changed for 2026

• The Profit Tax Act was amended by NN 151/2025, in force since 1 January 2026. It touched arts. 2, 6, 7, 13, 14.a and 18, including a new rule that the taxpayer bears the cost of an advance pricing agreement (art. 14.a). The 10% and 18% rates and the EUR 1,000,000 threshold are unchanged.
• E-invoicing is mandatory for VAT-registered companies since 1 January 2026. They must issue and receive domestic eRačun invoices under Fiscalisation 2.0.
• The related-party interest rate for 2026 is 2.65%, the benchmark the Croatian National Bank publishes for intra-group loans.

Is this guide for you?

Read on if you…

• plan a d.o.o. or j.d.o.o. in Croatia and want the real after-tax picture;
• run a foreign company while living in Croatia and wonder whether it has become Croatian;
• own a craft approaching EUR 1,000,000 of receipts, where profit tax becomes compulsory.

Probably not your case if you…

• freelance with receipts up to EUR 60,000, where a flat-rate craft is often simpler (see legal forms of business in Croatia);
• only hold Croatian shares as an investor; read capital gains tax in Croatia.

Who pays corporate income tax in Croatia, and at what rate?

Taxpayers

The Profit Tax Act covers Croatian companies, Croatian permanent establishments of foreign businesses, and some individuals. A craftsman can opt into profit tax. It becomes compulsory once the previous year's receipts exceed EUR 1,000,000, under art. 2(4) of the consolidated Profit Tax Act.

A company is resident when its seat is entered in a Croatian register or its place of effective management is in Croatia. Residents are taxed on worldwide profit. Non-residents are taxed on profit of a Croatian permanent establishment and on Croatian payments subject to withholding.

Two rates, one revenue test

The Tax Administration's profit tax page sets out the two rates:

• 10% if revenue in the tax period is up to EUR 1,000,000;
• 18% if revenue is above EUR 1,000,000.

Here's the catch: the test is revenue, not profit, and it is all or nothing. One euro over the line moves every euro of profit to 18%.

The dividend layer

Profit you pay out to yourself as an individual is capital income, taxed at a flat 12%.

How is the taxable profit calculated?

The base is accounting profit, revenue minus expenses before profit tax, adjusted under the Act. Eligible smaller taxpayers may instead use the cash basis (novčano načelo) under art. 5. Then income counts when paid, not when invoiced.

Main add-backs in 2026

• Entertainment (reprezentacija): 50% is added back (art. 7).
• Vehicles used by managers and staff: 50% of costs is added back, excluding insurance and interest (art. 7).
• Donations: deductible up to 2% of the previous or current year's revenue (art. 7).
• Fines imposed by authorities: fully added back (art. 7).
• Shareholder loans: interest is non-deductible where loans from a 25%+ shareholder exceed four times that shareholder's equity share (art. 8).
• Net borrowing costs above 30% of EBITDA or EUR 3 million, whichever is higher. The excess carries forward three years.

Depreciation

Art. 12 sets maximum straight-line rates: 5% for buildings, 20% for personal cars, 25% for equipment and intangibles, 50% for computers and software, 10% for other assets. You may double these rates. Excess depreciation is taxable. Day-to-day cost rules are in business expenses in Croatia.

Losses

A tax loss carries forward for five years under art. 17. There is no carry-back. Use losses in the order they arose.

Incentives worth knowing

Under the Investment Promotion Act, qualifying projects can cut the profit tax rate for up to ten years:

• EUR 150,000 to 1 million with 5 new jobs: 50% reduction;
• EUR 1 to 3 million with 10 new jobs: 75% reduction;
• over EUR 3 million with 15 new jobs: 100% reduction;
• micro enterprises: 50% for five years from EUR 50,000 and 3 new jobs.

For projects started from 2025, the relief covers only profit from the project itself, not capital, rent, interest or IP income.

What withholding applies when your company pays abroad?

A Croatian payer withholds tax on certain payments to foreign companies, as the Tax Administration lists:

EU directives can bring this to zero. Dividends need a 10% holding kept for two years. Interest and royalties to associated companies need a 25% holding kept for two years. Croatia also has 72 tax treaties that apply, which may reduce rates further. See international tax treaties of Croatia.

How is Croatian corporate tax filed and paid?

The tax year is normally the calendar year. A different 12-month period can be agreed with the Tax Administration.

1. Register the company and obtain its OIB (tax number).
2. Keep books under the Accounting Act, or use the cash basis if eligible.
3. Pay monthly advances by the end of each month, based on last year's return. A company in its first year pays none.
4. File the PD return within four months of year-end, so by 30 April for a calendar year.
5. Pay the balance, net of advances, by the same deadline.

PwC's Croatia tax administration summary (secondary) describes the same calendar. Late payment and inaccurate returns are covered in tax fraud regulations of Croatia.

Does your foreign company become Croatian when you move to Croatia?

It can. Art. 3 of the Act makes a company resident if its place of effective management is in Croatia. If you are the sole director of an Estonian OÜ or a UK Ltd and take every decision from Zagreb, that test is in play.

Short of full residence, your work can create a Croatian permanent establishment, a taxable presence of the foreign company. Profit attributable to it is taxed at 10% or 18%. Treaties settle double claims, usually by the place of effective management.

Honestly? If you will live in Croatia for years, a Croatian d.o.o. at 10%, with a 12% dividend layer, is often cleaner than defending a foreign shell. Compare corporate income taxes in Austria and corporate income taxes in Malta. For a guided setup, see Heavnn's business setup service.

Large groups: the 15% minimum tax

Groups with consolidated revenue of EUR 750 million or more in two of the last four years fall under the Global Minimum Corporate Income Tax Act. It applies to fiscal years starting after 31 December 2023. Small owner-managed companies are not affected.

Common mistakes (and what they cost)

• Crossing EUR 1,000,000 of revenue by a small margin → 18% applies to all profit, 8 points more, EUR 8,000 per EUR 100,000 of profit.
• Deducting 100% of entertainment and car costs → half is added back on audit, with interest on the unpaid tax.
• Lending heavily to your own company → interest above the 4:1 ratio, or above the 2.65% benchmark without arm's-length support, is disallowed.
• Managing a foreign company from Croatia without a plan → Croatia can claim it as resident and tax its profit here.
• Missing the four-month filing deadline → default interest and penalties; see the fraud and penalties guide.

Frequently asked questions

What is the corporate tax rate in Croatia in 2026?

Croatia has two rates. A company whose revenue in the tax period is up to EUR 1,000,000 pays 10% on taxable profit. Above that threshold the rate is 18%. The test uses total revenue, not profit, and applies to the whole year. Dividends paid to individual shareholders are then taxed separately at 12%.

How are dividends from a Croatian company taxed?

Dividends paid to individuals are capital income taxed at 12%. Dividends paid to foreign companies carry 10% withholding. A treaty can reduce it, and EU parents holding at least 10% for two years can be exempt under the Parent-Subsidiary Directive. Check the treaty with the shareholder's country before the payment, not after.

When is the Croatian corporate tax return due?

The PD return is due within four months of the end of the tax period, so by 30 April for a calendar-year company. Any balance is paid by the same date. During the year the company pays monthly advances based on the previous year's return. A company in its first year of operation pays no advances.

Can I run a one-person Croatian company while living abroad?

Legally yes. A non-resident can own and direct a d.o.o. remotely, and Croatian profit stays taxed in Croatia. The bigger question runs the other way. If you manage the company from your home country, that country may treat it as its own resident. Check both countries' rules and the treaty before relying on Croatian rates.

Does Croatia have withholding tax on payments abroad?

Yes. Dividends to foreign companies carry 10%. Interest, royalties and services such as market research, tax and business consulting and audit carry 15%. Fees paid to an EU non-cooperative jurisdiction without a Croatian treaty carry 25%. EU directives and treaties can cut these rates, often to zero, if conditions are met.

How long can a Croatian company carry forward losses?

Five years, under art. 17 of the Profit Tax Act. Losses must be used in the order they arose, and unused amounts expire after the fifth year. There is no loss carry-back. Losses generally cannot pass to third parties, except in mergers, de-mergers and certain acquisitions under the reorganisation rules.

Related guides

• Business expenses in Croatia: what your company can deduct
• Legal forms of business in Croatia compared
• International tax treaties of Croatia
• Tax fraud regulations of Croatia
• Tax landscape overview of Croatia
• Corporate income taxes in Austria
• Corporate income taxes in Malta
• All country tax guides

Sources

• Profit tax – Croatian Tax Administration (Porezna uprava)
• Porez na dobit – Croatian Tax Administration
• Zakon o porezu na dobit, consolidated text – Zakon.hr (legislation portal)
• Global Minimum Corporate Income Tax – Croatian Tax Administration
• Double taxation agreements – Croatian Tax Administration
• Vodič kroz Fiskalizaciju 2.0 – Croatian Tax Administration
• Croatia: corporate deductions – PwC Worldwide Tax Summaries (secondary)
• Croatia: corporate tax administration – PwC Worldwide Tax Summaries (secondary)

This guide is general information, not personalised tax advice. See how we research and review.