Non-taxable benefits in kind effective from September 1, 2019

Interest rate on related-party loans
22/03/2018
Tax amendments applicable from January 1, 2021
27/12/2020

Amendments to the Income Tax Acts, effective from September 1, 2019, have introduced new non-taxable remuneration that employers can pay to their employees. Thus, income tax will not be paid on:

  • accommodation cost for employees incurred during employment contract, regardless of whether the employer has arranged the accommodation or the employee has concluded a rental contract. Accommodation costs are recognized up to the amount of actual payment to the lessor’s or to the employee’s bank account.
  • meals for employees up to HRK 5,000.00 per year as a lump sum (should be paid on employee’s bank account once a year or monthly up to HRK 416,00) or up to HRK 12,000.00 per year provided that the invoices for the food services are issued to the company and paid through bank account. These two costs are mutually exclusive on an annual basis.
  • costs of child care paid to employee’s bank account up to the amount of actual expenditure and on the basis of authentic documentation of preschool institutions and other legal or natural persons with licence.
  • holiday vouchers for employees, in accordance with special regulations of the Ministry of Tourism amounting to HRK 2,500.00 per year.

Starting from September 1, 2019 current provisions on the non-taxable income of seasonal workers in tourism are revoked as the new non-taxable benefits will be applied to all employees regardless of industry.

After more than 20 years, non-taxable daily allowance for business trips and for work in the field are increased from HRK 170.00 to HRK 200.00. Allowance for business trips that last more than 8 but less then 12 hours will be 100.00 kn.

Darka Cecić
Darka Cecić
Darka Cecić - CPA, CIA and educator on seminars and trainings with tax and financial reporting themes with more than 25 years of extensive experience in accounting and audit field. Continuously upgrades her knowledge through numerous education inland and abroad. Sharpened skills on audit engagements in SME and large companies from various industries and international groups.

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