Croatia’s Tax system – World Observatory on the Social Status of the Artist
Tax status
Artists, particularly self-employed artists to whom artistic work is the only or main vocation, enjoy special tax benefits in compliance with the provisions of the Law on Income Tax.
The Law makes provision for reducing taxable fees of artists, whereby in addition to the 40 % flat-rate on artist fee expenses, a 25% flat-rate is also granted on the basis of artistic work. Free-lance artists can choose the more favourable way of working out their income tax. The law does not make provision for them to keep books; rather they decide how they will disclose their income and expenses, namely, by choosing the most favourable option.
Likewise, the tax base of self-employed artists is lowered for the value of a received donation, namely, up to 20.000 annually. The Value Added Tax Law provides for tax benefits on products and services delivered by public institutions in culture, self-employed artists and artistic organizations, including those delivered by institutions for permanent educational and culture in line with special regulations.
Taxes on cultural and artistic activities, as well as specific tax benefits are regulated by tax laws, including the following:
- Law on Profit Tax (“Narodne novine”,/Official Gazette/ n° 127/00),
- Law on Income Tax (“Narodne novine”,/Official Gazette/ n°127/00 and 150/02)
- Law on Value Added Tax (‘Narodne novine”,/Official Gazette/ n° 47/95,106/96,164/98,105/99, 54/00 and 73/00).
The Law on Profit Tax and the Law on Income Tax regulate tax concessions in the field of culture and art, namely tax exemptions and benefits for artists and tax benefits for donors in culture and the arts.
Exemptions regarding temporary import duties on cultural products
The same law provides for tax exemptions.
Exempted from value added tax are goods imported for cultural purposes, including:
- goods given as donations to institutions, associations and non-profit organizations in culture as well as goods bought by them abroad, which however, have to be paid from received foreign money donations
- goods imported as their own works by writers and artists.
There is no tax rate on public film screening services as well as on books and scientific journals.
