Financial services are needed by most companies opened by local or foreign investors and our team of accountants in Croatia is ready to offer professional financial services for different types of legal entities.
Taking into consideration the great number of foreign companies establishing branches and subsidiaries in Croatia, it is highly recommendable to be updated with the accounting rules in order to run correctly a business in this country. The Commercial Code imposes certain accounting standards to Croatian companies. They also have to submit annual balance sheets and other accounting documentation with the Trade Register.Ourcompany formation agents in Croatiacan give you complete information about accounting in Croatia.
Who requires accounting services in Croatia
Local and foreign business owners with commercial activities
Applicable accounting legislation in Croatia
- European IAS (International Accounting Standards),
- IFRS (International Financial Reporting Standards)
Types of accounting services we offer
- maintaining company accounts,
- annual financial statements,
- tax minimization methods,
- tax registration
Tax advice and compliance
- regular oversee of tax legislation,
- business guidance in matters of taxation,
- tax-saving strategies
We offer support for tax registration
Companies must be registered for the payment of VAT, corporate tax, and other related obligations.
Financial planning for company owners in Croatia
For clients who want to make smart and risk-free investments in Croatia
Risk assessment and evaluation
Our accountants in Croatia can detect possible business risks and provide specific measures.
Types of audit services
- internal control system audits,
- external and financial audits,
- regulatory audits,
- special purpose audits
Tax minimization methods available
- strategic tax management imply advance payment of credits,
- registration of charities,
- retirement accounts,
- travel deductions
Personalized financial consultancy services
- new business approach,
- integration of new technologies,
- support for investments with high returns
Investment consultancy for high-net-worth individuals
Dedicated services for better management of assets
Financial and analysis reports for companies
Such reports can reveal the financial direction of the business and can be used to attract investors.
Human resources services available
- drafting employment contracts,
- employee administration-related issues
Expertise provided by certified accountants (YES/NO)
Fiscal year in Croatia
It starts on January the 1st and ends on 31st of December.
Accounting services available in Croatia
Our accountants in Croatia provide a wide range of services for those who need financial services, among which:
• Maintaining accounts for a Croatian company;
• Payroll administration;
• Filling of accounts with the Tax Authorities in Croatia;
• Tax minimization solutions. More can be discussed with our accountants in Croatia.
Our accountants in Croatia deliver personalized services in compliance with your company's needs and the legal provisions of the Company Act. You can also find useful the following infographic about accounting in Croatia:
Payroll in Croatia
Payroll in Croatia is governed by the Labor Act, the Income Tax Act, and the Health Insurance Act. Employees in Croatia are also subject to both income tax and social security contributions. Employers must withhold these taxes from their employees' salaries and remit them to the relevant tax authorities. The health insurance rate is 16.5%. Employers must ensure that their employees' salaries meet or exceed the minimum wage.
The minimum wage salary in Croatia is divided into various components, like the bruto and neto aspects. Bruto refers to the overall salary figure, including all tax deductions, health insurance contributions, pension payments, and the final amount that you receive in your paycheck. On the other hand, neto is the amount of salary that will be deposited into your bank account each month after all taxes and contributions have been made. Currently, the minimum wage in Croatia in 2023 is HRK5,274.15/ EUR 700.
Payroll processing in Croatia involves calculating employees' salaries, subtracting taxes and other deductions, and issuing pay slips. This process must be completed on a regular basis, usually monthly. These records must be available for inspection by the relevant authorities.
Croatian employers support social security contributions. These social security contributions also encompass work-related accident insurance, pensions, as well as benefits related to family and maternity. Pension contributions are deducted from the employee's gross income by the employer during the payroll process. The rate of this deduction is 20% of the employee's gross income, with a monthly cap of HRK 61,806.11 / EUR 8,203.08 and an annual cap of 741,673.28 / EUR 98,436.96.
To simplify the payroll process in Croatia, many employers use payroll service providers who handle payroll calculations and ensure compliance with all relevant laws and regulations. You can contact our accounting firm in Croatia for specialized payroll services and management.
Bookkeeping services in Croatia
Accounting and bookkeepingin Croatia are important parts of the daily management of a local company. The services of an accounting firm in Croatia are required because the International Financial Report Standards (IFRS) are mandatory for large companies and those listed on the local stock exchange. All other Croatian companies have to report to the Croatian Committee for Financial Reporting Standards, the main accounting regulation body in the country. The accounting reports submitted with this institution must contain:
- a balance sheet,
- a cash-flow report,
- a profit and loss account,
- a review of the changes involving the authorized capital,
- comments and annexes.
Bookkeeping in Croatia must record all financial transactions, including sales, purchases, expenses, and payments, which are entered into the accounting system.Transactions are categorized into appropriate account categories, such as revenue, expenses, assets, liabilities, and equity. Bank statements are compared to the bookkeeping records to ensure that all transactions are properly recorded and reconciled.Financial statements, such as balance sheets, income statements, and cash flow statements, are prepared based on the bookkeeping records. Bookkeeping records should be kept up-to-date and accurate. Regular review and reconciliation of records should be performed to ensure accuracy. An accountant in Croatia can help your business perform its bookkeeping and prepare its financial statements.
Other important financial documents that Croatian companies must handle are payrolls and human resources management. Outsourcing companies are usually hired for managing payrolls and accounting reports for companies who need accounting in Croatia. Appointing independent auditors to monitor and verify their financial records is another obligation for Croatian companies. Ouraccountants in Croatia can provide a wide range of audit and accounting services for each type of company. You can rely on the support of our accounting company in Croatia for bookkeeping in Croatia. Clients interested in incorporation services in other countries, for example in company formation services in Singapore, can rely on our partners - OpenCompanySingapore.com.
Accession of Croatia to the euro area
On July 12th, 2022, the Council of the European Union granted approval for Croatia's accession to the eurozone, effective January 1st, 2023, and established the conversion rate for the Croatian kuna, one euro equals 7.5345 kunas. Until December 31st, 2023, both euro and kuna prices for goods and services will be displayed. The exchange rate should be prominently displayed when presenting prices, as this is a crucial consumer protection measure.
Our accounting company in Croatia helps your business navigate the transition to the euro and ensure compliance with accounting standards and regulations.An accountant can help you understand the accounting implications of the switch from the kuna to the euro and assist with the implementation of any necessary changes to your bookkeeping in Croatiaandother financial reporting processes.
If you have a UK-based company and are interested in relocating to Croatia after Brexit, it is also possible. You can discuss more aspects with out Croatian accountants.
Below is a video presentation about accounting services we offer in Croatia:
Personalized accounting services in Croatia
If you think of hiring the services of an accounting firm in Croatia instead of creating such a department, it is good to know that additional services can be provided, such as:
•specific financial reports about foreign bank credits with the help of the National Bank in Croatia;
•assistance at the time an audit is performed in the company;
•support in the case of payments in different currencies;
•preparation of quarterly financial reports in compliance with the applicable laws.
We remind that our team of accountants in Croatia has a wide experience in this field and they work in respect with the Croatian Financial Reporting Standards, the Accounting Act and the international laws.
What types of financial reports must be filed in Croatia?
An accounting firm in Croatiahandles a series of reports like the balance sheet, the cash flow report, the profit and loss account, plus the annual financial reports as needed in every company. All the reports reveal significant information about the financial status of the firm, the economic outcomes and a complete image about the ways the company is managed. All the financial reports are imposed for all legal entities with establishments in Croatia, domestic or foreign.
Bookkeeping in Croatia – What you need to know about documents
The internal bookkeeping documents like payment slips, traveling orders, outgoing invoices, payment orders, and payroll are the type documents created in the firm. There are also external bookkeeping documents like supplier invoices, entry notifications or other statements which need to be registered in the company. Bookkeeping is extremely important for a company, and an accounting firm is definitely required for small, medium and large companies in Croatia.
What is the accounting process for a company in Croatia?
All the business activities are recorded with the help of bookkeeping, taking into account varied items like payroll accounts, material expenditures, trade receivables, sales contracts, inventory process, trial balance, financial reports, journals keeping the business activities entries, a general ledger that records the business performance and any financial status change. More about the services of our accounting firm in Croatia can be discussed with us.
Can I request accounting consultancy in Croatia?
Yes, ouraccountants in Croatia are at your disposal with accounting consulting services for the company you own in this country. This will ensure that the company aligns with the rules and operations required in this case and that you will receive the services you need. These include:
Optimizing financial and accounting services, as well as revising them where appropriate.
Establishing accounting control systems and procedures in the company.
Accounting and financial due diligence for a better operation of the company's operations.
Application of IFRS rules, in accordance with regulated local rules.
You can discuss more with our accountant in Croatia and find out about the extra services offered in this case.
Some of the essential accounting rules in Croatia
Our accounting firm in Croatia can explain to you from the very beginning what are the important accounting rules without which a company could not operate legally in this country. Let's review some of these:
The fiscal year begins on January 1 and ends on December 31.
IFRS or International Financial Reporting Standards is the set of accounting rules that have been adopted in Croatia as well.
The accounting rules implemented by the Committee for Financial Reporting Standards in Croatia are also observed.
Balance sheet, cash-flow reports, profit, and loss accounts are among the most important accounting documents held by a company in Croatia.
All financial documents must be kept in the company for at least 11 years.
An independent external audit is required for companies with financial documents exceeding EUR 4.3 million annually.
These are some of the most important accounting rules that apply to Croatian companies. Our accountant in Croatia can easily explain what kind of services your company needs.
VAT registration in Croatia
Croatia imposes a 25% VAT on various activities in this country. Therefore, it is essential to register the company to pay this type of tax. Our accountants in Croatia can offer you the necessary support in this direction so that you can align with the respective requirements. For this, you need to prepare some documents, including those of the company, respectively Articles of Association. In addition, the Certificate of Registration of the company in Croatia, as well as some standard forms that require additional information. The whole process can take about 8 days and it is important to have specialist help in this process, to ensure that you follow all the steps for registration for VAT in Croatia.
What is the purpose of the accounting in Croatia?
With the help of the accounting systems, all the financial transactions are recorded, and then used for varied accounting and financial reports in the firm. Moreover, certain financial reports are solicited by the tax authorities and other financial institutions in Croatia. Also, the registration of employees and payroll services are part of the necessary accounting services for a firm. It is important to properly manage the accounting documents of a firm, and consultants in the field are at your disposal as soon as you register a company.
Tax minimization for Croatian companies
The Croatian government has recently implemented a set of fiscal measures aimed at reforming the tax system. The incorporation of new companies, start-ups and small entrepreneurship is strongly encouraged through tax incentives. The corporate income tax rate of 12% is applicable under partocular conditions, to companies in Croatia. Other measures of tax minimization for Croatian companies include:
• Representation expenses – 50% of their total amount can be deducted;
• Personal transportation expenses – 30% can be deducted;
• Agreements on interest rates between affiliated companies by using a transfer pricing method or an interest rate prescribed by the Ministry of Finances;
• Treaties for the avoidance of double taxation.
Other tax minimization strategies for Croatian companies
Before presenting other tax minimization tools that might be beneficial for your business in Croatia, we remind that the general corporate income tax or CIT is set at an 18% rate, one of the lowest in Europe. However, companies with profits not exceeding HRK 7,5 million are subject to even a lower CIT, set at a 12% rate, and representing a great tax advantage. However, there are still plenty of tax minimization tools that can be adopted in a Croatian company in order to cut the amount of taxes. For instance, donations or charities might represent great options for foreign entrepreneurs in Croatia who look for different tax minimization options for their businesses. Another great choice might represent the advanced payment of credit loans because company owners can be exempt from different fees. You can also concentrate on reinvesting the profits in the company and enjoy the tax cuts involved. It is a great idea to create a tax minimization plan, with the support of our company formation agents in Croatia who have experience in this field. We also remind you that our specialists can handle the registration process of companies in Croatia, regardless of the field in which you want to activate.
Investing in the company to cut the taxes
Another great tax minimization tool accepted and used by company owners in Croatia involves the equipment investment. This means that you can benefit from tax cuts or exemptions if you reinvest a part of the profits in the company. This is often the choice of local and international investors in Croatia who are looking for the proper tax minimization option for their company. If you would like to know more about this kind of strategy, feel free to talk to one of our company formation agents in Croatia. Our experts are at your disposal if you want to start a business in Croatia and know more about the tax structure in this country.
Double tax treaties signed by Croatia
Besides the great taxation system applicable in Croatia, investors can also benefit from the protection of the double taxation treaties signed with countries worldwide, to avoid taxation twice on incomes. Such treaties are extremely helpful for foreign companies with establishments and operations in Croatia. Armenia, Belarus, Chile, Bulgaria, Albania, Austria, Bosnia and Herzegovina, Canada, Czech Republic, China, Denmark, Finland, Georgia, France, Estonia, Germany, Hungary, Greece, India, Ireland, Iceland, Indonesia, Italy, Kosovo, Kuwait, Jordan, Latvia, Lithuania, Luxembourg, Malaysia, Macedonia, Mauritius, Malta, Moldova, Morocco, Montenegro, Norway, the Netherlands, Poland, Romania, Spain, Switzerland, Syria, Turkmenistan, Turkey, UK and Ukraine are a few of the countries that signed double taxation agreements with Croatia and that protect both companies and residents in this state.
We have gathered information, facts and statistics about the business and the economy in Croatia that you might find it useful when deciding on investments in this country:
•for 2021, the FDI inward flow was USD 569 million;
•the “2019 World Doing Business" report ranks Croatia 58th among 190 worldwide economies;
• The total FDI stock for 2021 in Croatia was USD 38.89 million;
• The sectors that attract the most foreign direct investmentsinclude: financial services, wholesale trade, real estate, and telecommunications;
• The leading countries in terms of investments are: the Netherlands, Austria, Italy, and Germany, according to the Croatian National Bank.
Taxable profits of foreign companies in Croatia
Every company based in Croatia is subject to the local taxation system. Foreign enterprises must pay company tax on all their profits from Croatia and abroad. Taxable profits of foreign companies in Croatia include the money resulted from investments, doing business and selling assets for more than they cost (chargeable gains).
Why choose our accounting services in Croatia?
It is extremely important to have the accounting matters in mind at the time you decide for a company in Croatia as a domestic or international entrepreneur. This is a significant part of the overall business activities for which complete attention is needed, especially as a taxpayer in this country.
An accounting firm in Croatia will manage all the financial records in the firm in a professional manner and in compliance with the business needs for which complete solutions are provided. Our team can help you maintain a good business direction by offering professional advice in financial documents management. Moreover, bookkeeping services are of high importance for generating a series of accounting documents. The similar thing is available for VAT returns and annual financial statements which are needed in the company and for which our team will act in the best interests of the clients.
No matter the type of company you own in Croatia (limited liability company, joint stock, joint venture or partnerships), it is best to solicit complete accounting services from our team of experts and think of the ways in which you can direct your investments. Also, some tax minimization methods may be excellent options for your company in Croatia, in order for you to avoid extra taxes and to develop your business in an efficient and smart manner. Having experience as an accounting firm in Croatia will weigh much in front of entrepreneurs who are looking for professionals in the firm and for persons who can properly and correctly handle all the accounting matters in your company.
Why invest in Croatia
Croatia is a solid business destination and one of the most popular in the European Union. With an attractive charging system, a young and experienced workforce, and quality infrastructure, Croatia is preferred by foreign investors who want to make a profit in this country. Here are some statistics about Croatia's economy:
Croatia had a GDP of USD 68.966 billion in 2021.
The 2021 GDP was 13.1% higher than the previous year.
The unemployment rate is relatively low, approxaimetely 8.68% in 2021.
Please get in touch with our accountants in Croatia for personalized offers and prices related to our services.
Call us now at +385 95 9981 628 to set up an appointment with Ivan Župan, a managing partner at Law Firm ZBA. Alternatively you can incorporate your company without traveling to Croatia.
As a Law Firm ZBA client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Croatia, including accounting services.
The team from CompanyFormationCroatia.com is very qualified and benefits from extensive expertise in this area. I would definitely recommend them to any entrepreneur decided to start his own business here.
Mihai Cuc, Partner of MHC Law Firm www.romanianlawoffice.com