The Croatian Chamber of Trades and Crafts has submitted a series of recommendations as part of the ongoing public consultation on proposed tax changes.

HOK argues that the planned increase in tax costs should be adjusted for entrepreneurs in the two highest revenue brackets, which together affect around 16,000 flat-rate entrepreneurs.

According to the chamber, nearly 85% of flat-rate entrepreneurs would continue to face their current level of taxes and contributions under the proposed system. HOK estimates that this would leave that group with almost €27 million more per year compared with a broader increase in costs.

However, the organisation is seeking different rules for entrepreneurs with annual revenues between €40,000 and €60,000.

HOK Proposes Lower Taxable Income

For entrepreneurs earning between €40,000 and €50,000, HOK is proposing that 75% of expenses be recognised, rather than the proposed 70%.

For those earning between €50,000 and €60,000, the chamber is calling for 65% of expenses to be recognised instead of the proposed 55%.

Under HOK’s proposal, taxable flat-rate income would consequently fall to €12,500 for the €40,000–€50,000 bracket, compared with the proposed €15,000.

For entrepreneurs in the €50,000–€60,000 bracket, taxable income would be €21,000 instead of the proposed €27,000.

Call to Maintain Contribution Coefficient

HOK is also calling for the existing 0.40 contribution coefficient to remain the uniform mandatory basis for all flat-rate entrepreneurs.

The chamber argues that entrepreneurs who want to make higher contributions already have the option of voluntarily selecting a higher contribution base.

In addition, HOK has proposed extending a planned 17.5% increase in blue diesel allowances to commercial fishermen as well as farmers.

The organisation is also seeking to raise the revenue threshold for businesses eligible for the 10% corporate income tax rate to €2 million.

HOK president Dalibor Kratohvil said the proposals are intended to create a tax system that is more predictable and proportionate for entrepreneurs.

The proposed measures remain under consideration as part of Croatia’s legislative process and ongoing public consultation.