Croatia Corporate Tax (2026): Rates, Withholding Tax & Compliance Guide for Founders

If you are researching Croatia corporate tax in 2026, the system is relatively straightforward, but it is important to understand how corporate income tax (CIT), withholding tax (WHT), and compliance rules interact — especially if you are a Croatian resident founder, foreign investor, or operating a foreign-owned d.o.o.

This guide provides a clear, legally grounded overview based on official sources such as Porezna uprava, OECD guidance.

What Is the Croatia Corporate Tax Rate in 2026?

As of 2026, the Croatia corporate tax rate operates under a two-tier structure based on annual revenue:

• 10% – applies to companies with annual revenue up to EUR 1,000,000
• 18% – applies to companies with annual revenue exceeding EUR 1,000,000

This structure has remained consistent from 2025 into 2026.

Resident companies are taxed on worldwide income.
Non-resident companies are taxed only on Croatian-source income.

Overview of the Croatia Tax System

Before looking specifically at corporate income tax, it is important to understand the broader Croatia tax system. Croatia operates a structured, EU-aligned tax framework consisting of corporate income tax (CIT), value-added tax (VAT), personal income tax, and social security contributions. Companies may also face withholding tax on cross-border payments, transfer pricing obligations, and sector-specific levies.

The system is administered by the Croatian Tax Administration (Porezna uprava) and follows EU directives and OECD standards, particularly in areas such as permanent establishment, anti-avoidance rules, and global minimum taxation.

For a full breakdown of how these components interact, see our detailed guide on the Croatia tax system.

Croatia Corporate Tax System Overview

Corporate income tax (profit tax) in Croatia is governed by the Profit Tax Act and administered by the Croatian Tax Administration (Porezna uprava).

Key features:

• Tax period: calendar year (unless special approval granted)
• Currency: Euro (EUR)
• Tax base: accounting profit adjusted under Croatian tax rules
• Loss carryforward: up to 5 years
• Monthly advance payments required

Croatia is not structured as a tax haven jurisdiction. Instead, it operates a predictable EU-aligned tax framework.

Croatia Corporate Tax Rate 2026 (CIT Explained)

Corporate Income Tax Rates

Annual Revenue (Tax Period)	CIT Rate
Up to €1,000,000	10%
Above €1,000,000	18%

The threshold applies to total revenue generated during the tax period.

Small Business Advantage

Companies below the €1 million revenue threshold benefit from the reduced 10% corporate tax rate. This is particularly relevant for startups, consulting companies, and early-stage foreign-owned d.o.o. structures.

Tax Base Clarification

Taxable profit is not simply accounting profit. Adjustments may apply for:

• Non-deductible expenses
• Depreciation rules
• Transfer pricing adjustments
• Related-party transactions

Resident vs Non-Resident Companies

Understanding tax residency is critical when assessing Croatia corporate tax exposure.

Resident Companies

A company is considered Croatian tax resident if:

• It is incorporated in Croatia, or
• Its place of effective management is in Croatia

Resident companies are taxed on worldwide income.

Non-Resident Companies

Non-residents are taxed only on Croatian-source income.

However, permanent establishment (PE) rules apply.

Practical PE Examples

• A foreign company with employees and an office in Zagreb → likely PE.
• A construction project exceeding 12 months → potential PE.
• A dependent agent regularly concluding contracts → PE risk.

Croatia follows OECD Model Convention principles when determining permanent establishment.

Withholding Tax (WHT) in Croatia (2026)

Withholding tax applies to certain outbound payments to non-resident entities.

Withholding Tax Rates

Payment Type	Standard Rate
Dividends	10%
Interest	15%
Royalties	15%
Certain services to non-cooperative jurisdictions	25%

Dividend Repatriation

Croatia permits full dividend repatriation.

WHT on dividends is generally 10%, but may be reduced under:

• Double Taxation Agreements (DTAs)
• EU Parent-Subsidiary Directive (intra-EU structures)

Proper documentation is required to apply treaty benefits.

Services to Non-Cooperative Jurisdictions

A 25% withholding tax may apply to payments for certain services (e.g., consulting, auditing, market research) made to entities in EU-listed non-cooperative jurisdictions.

Pillar Two – 15% Global Minimum Tax

Croatia has implemented the OECD Pillar Two framework.

This introduces a 15% global minimum tax for multinational groups with consolidated revenues exceeding EUR 750 million.

Important points:

• Applies to large international groups
• Ensures effective tax rate does not fall below 15%
• Not relevant for SMEs or standalone Croatian d.o.o. structures

For most founders, this provision does not apply unless operating within a large multinational group.

Croatia VAT rate (Brief Overview)

Although separate from corporate income tax, VAT is a key part of the Croatian tax system.

VAT rates:

• Standard rate: 25%
• Reduced rates: 13% and 5%

VAT registration is mandatory once thresholds are exceeded or in specific business activities.

For a full breakdown, see our detailed guide on the Croatia tax system.

Payroll & Social Contributions

Corporate tax is separate from payroll taxation and social security contributions.

Employers must calculate and remit:

• Employee pension contributions
• Health insurance contributions (HZZO)
• Income tax on salaries
• Employer contributions

Failure to structure payroll correctly can create compliance exposure separate from corporate income tax obligations.

Transfer Pricing & Related-Party Transactions

Croatia follows OECD-aligned transfer pricing principles.

Key rules:

• Arm’s length principle applies
• Related-party transactions must be properly documented
• Documentation required for certain thresholds
• Increased audit focus in recent years

Foreign-owned d.o.o. companies should pay particular attention to:

• Management service fees
• Intercompany loans
• IP licensing structures

Improper pricing adjustments can increase the effective corporate tax burden.

Compliance & Filing Deadlines

Understanding deadlines is as important as understanding rates.

Annual Corporate Income Tax Return

• Form PD
• Due within 4 months after the end of the tax period

For calendar-year taxpayers: deadline is generally end of April.

Monthly Advances

Corporate tax advances must be paid monthly based on the prior year’s liability.

Additional Compliance

• Annual financial statements
• VAT filings (if registered)
• Transfer pricing documentation (if applicable)

Croatian tax authorities expect strict adherence to filing deadlines.

Practical 2026 Checklist for Foreign Founders

If you are starting or operating a Croatian company, use this checklist:

• Confirm whether your revenue qualifies for 10% or 18% rate.
• Assess whether your foreign parent creates PE exposure.
• Review dividend structure and treaty benefits.
• Confirm VAT registration status.
• Evaluate transfer pricing documentation.
• Determine whether Pillar Two rules apply.
• Monitor monthly CIT advances.
• Prepare annual Form PD on time.

This structured approach helps prevent compliance risks and unexpected tax exposure.

FAQ – Croatia Corporate Tax

What is the Croatia corporate tax rate in 2026?
10% for revenue up to €1,000,000.
18% for revenue above €1,000,000.

Does Croatia tax worldwide income?
Yes, for resident companies. Non-residents are taxed only on Croatian-source income.

How are dividends taxed in Croatia?
Generally 10% withholding tax, potentially reduced under tax treaties or EU directives.

What is the filing deadline for corporate tax?
Within four months after the end of the tax period.

Can a foreigner own a Croatian company?
Yes. Foreign ownership of a d.o.o. is permitted under Croatian law.

Is Croatia a low-tax jurisdiction?
Croatia is an EU-aligned tax system with moderate rates, not a tax haven.

Final Thoughts

The Croatia corporate tax rate 2026 framework remains stable and predictable. With a 10% rate for smaller companies and 18% for larger enterprises, Croatia offers clarity for founders and investors.

However, corporate tax does not operate in isolation. Withholding tax, VAT, payroll contributions, transfer pricing, and permanent establishment rules all shape your effective tax position.

Proper structuring from year one, particularly for foreign-owned d.o.o. companies is essential.

If you would like to understand how the Croatia corporate tax system applies to your specific structure, our team at Mandracchio Capital is here to help.