Croatia is an appealing place for many digital nomads for various reasons. However, how does Croatia look from a tax point of view: let’s have a closer look at Croatia tax residency.
Key Points on Croatia Tax Residency for Digital Nomads
- Croatia offers personal income tax rates between 15% and 35,40%
- There are different systems and rates that can apply to freelancers; lowering the aforementioned rates
- Social contributions in Croatia are rather high; just like in many other European countries
- Overall, Croatia isn’t the most interesting country purely from a tax point of view
- The digital nomad visa can offer relief of taxation for foreigners but we need to see how this looks under the updated rules
Understanding Croatian Tax Rules
If you obtain Croatia tax residency, there are a ranges of taxes that can apply to you. Which taxes apply, will depend on your situation. Let’s have a look at the most common ones.
Personal Income Taxes
Croatian income tax rates for professional income are a combination of taxes on different levels. There is the federal tax rate but on top of this municipalities will also add their income tax.
Therefore, the exact tax rate will heavily depend on the place you decide to live. Yet, Croatia overall has two income brackets:
- Income under EUR 50.400: tax rate between 15% and 23,60%
- Income above EUR 50.400: tax rate between 25% to 35,40%
The exact rate for each bracket will depend on your municipality.
Particular groups of people (e.g. students) will just pay taxes based on the rate of the lower bracket. Furthermore, freelancers can also opt to pay corporate tax and there is a specific lump sum regime for freelancers with low income.
If you receive investment income (e.g. dividends, interests, capital gains) you will pay a flat rate of 12% in taxes.
Lump Sum Tax for Freelancers
Croatia has a specific tax regime in place for freelancers. The regime is called Paušalni obrt and is applicable to freelancers making up to €40.000 per year.
By applying this regime, you will pay a lump sum tax per quarter. The exact amount of tax is based on five income brackets:
- <EUR 8.500: EUR 264
- EUR 8.500-12.000: EUR 396
- EUR 12.000-15.000: EUR 660
- EUR 15.000-30.000: EUR 924
- EUR 30.000-40.000: EUR 1.320
Do note that these brackets and the amounts due can be updated. Therefore, you always need to double check the exact amounts but these give you a good indication.
However, this basically means that someone making exactly EUR 40.000 per year would pay 3,30% in tax. Yet, on top of is you’ll still have to pay social contributions.
Tax Exemption for Digital Nomads
If you apply for the Croatia Digital Nomad Visa you actually get an exemption from income tax.
At least, this used to be the case. Nevertheless, Croatia did make some changes to its digital nomad visa from March 2025. Before you could only stay up to a maximum of 12 months. Since the update, this increased up to 36 months or three full years.
Before Croatia would give you an exemption for income taxes because you could only stay for one year. They didn’t want to come running after you for taxes for just one year and they would assume you kept paying taxes in your home country.
However, the new change now allows you to really stay in Croatia longterm. At this point in time, it is still unclear what this means from a tax point of view.
Therefore, you rather be a bit more cautious if you really want to apply for the digital nomad visa under the new provisions.
Social Contributions in Croatia
The social contributions depend on the fact if you are an employee or a self-employed individual.
For employees, the employer will pay 16,5% in contributions calculated on the employee’s salary. On the employee’s side, the total percentage is 20%. However, here some corrections and maximum thresholds apply.
As a self-employed individual, you alone are responsible for paying your social contributions. Therefore, you’ll pay pay 36,5% in total which is basically equal to the employer’s and employee’s share. Yet, just like for employees some maximum threshold of around kEUR 11 applies.
Nevertheless, if you apply the flat tax regime (Paušalni obrt) you just pay a fixed amount of around EUR 230 per month or EUR 2.760 per year.
Croatian Corporate Income Tax
The general corporate tax rate in Croatia is 18%.
However, small companies with a revenue up to one million Euro can benefit from a preferential tax rate of 10%.
Nevertheless, you do need to account for a withholding tax on dividends of 10% in case you want to take money out of your company. Nonetheless, some double tax treaties allow you to lower this tax rate if the shareholder lives abroad.
How to Become Tax Resident in Croatia
If you want to become a tax resident in Croatia, you need to take a few steps. Let’s have a closer look at what that actually means.
Meet Criteria for Croatia Tax Residency
Croatia considers you as their tax resident if you spend at least 183 days in the country.
Unlike in most countries, Croatia sometimes even takes into account multiple tax years to assess if you meet this criteria.
However, even if you wouldn’t actually spend the aforementioned amount of time there, you could still qualify as a tax resident.
This is the case if you own or rent a property there that you have at your disposal for at least 183 consecutive days. This second element is something to keep in mind if you consider obtaining a holiday home in Croatia.
A double tax treaty could make sure you are not actually taxed in Croatia. Nevertheless, you should definitely assess this upfront.
Register with Tax Authorities
In order to manage all your financial and tax obligations connected to Croatia tax residency, you’ll need to apply for a Personal Identification Number (OIB) with the Croatian tax office.
You’ll also have to fill out questionnaire TU in order to inform the tax office of your change of tax status from non-resident to resident taxpayer.
Is Tax Residency in Croatia Convenient for Nomads? (My Unbiased Opinion)
Croatia is an attractive place for digital nomads; more about that later on.
From a tax point of view, Croatia tax residency might also look attractive from a first look. It offers acceptable personal income tax rates and a low corporate tax rate for small companies.
Nevertheless, many digital nomads forget about also taking into account social contributions on their professional income or dividend tax if they work with a company.
If you add all of this together, you’ll still end up paying a big amount in different kind of taxes.
If you really want to spend a lot of time in Croatia and you can accept the tax consequences, that’s of course fine.
However, if you are mainly looking for a country to optmize your taxes, there are probably better options for you than Croatia.
How is Croatia for Digital Nomads?
Croatia attracts many digital nomads for various reasons:
- Cost of living: although prices have gone up significantly in many hotspots in Croatia, it still offers a more affordable lifestyle than many Western European countries.
- Infrastructure: Croatia has good internet connectivity and many places cities have coworking spaces; also offering some digital nomad community.
- Language: because of the popularity of Croatia, the country receives many international visitors. Therefore, English is widely spoken in the more popular areas.
- Nature: Croatia has a long coast line with a crazy amount of islands. So, if you like beaches, you’ll immediately feel at home.
- Digital nomad visa: as already mentioned before, Croatia offers a digital nomad visa. Since recently, it’s even possible to stay in Croatia with a digital nomad visa for up to three years.
Let Me Help You With Your Tax Setup
Do you need help with assessing if Croatia tax residency is right for you? Or, maybe you want to get a better understanding of all the different options out there?
Reach out if you finally want to take care of your tax setup as a digital nomad so you can stop worrying about your taxes!
