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RENTERS of flats, rooms and beds to travellers and tourists and OPERATORS OF camps and/or camp-site platforms and Robinsonian accommodation units

GUIDELINES ON TAX COMPLIANCE FOR CITIZENS (RESIDENTS) WHO ARE RENTERS 

1. When does the renter have to report to the Tax Administration?

After a citizen - resident (hereinafter: the renter) has obtained a Decision on the authorisation to provide hospitality domestic services (from the Office of Public Administration or City Office for Economy of the City of Zagreb), he/she should submit a copy of the Decision to the competent Tax Administration Local Office within 8[1] days from the day of issuing the authorisation for the performance of business activity, for the purpose of registering in the taxpayers' register. The application for registering in the taxpayers' register (RPO​ Form) should be filled out and submitted with the copy of the Decision.

2. Who determines the flat rate income tax and how?

The decision on the amount of flat rate o​f income tax is issued by the representative body of a unit of local self-government. The taxpayer to whom annual income tax is determined at flat rate is the person renting flats, rooms and beds to travellers and tourists and operators of camps and/or camp-site platforms and Robinsonian accommodation units if the following cumulative conditions are met:

• that the renter is not value added tax (VAT) taxpayer on the basis of renting activities, under the VAT Act 

• that the renters are authorised by the competent office to provide citizen's domestic services in accordance with the provisions of the act governing hospitality industries 

• that the renter does not determine income from self-employment activity as the difference between receipts and expenses on the basis of prescribed financial records

• that the renter rents out to travellers and tourists apartments, rooms and beds, which he/she owns, up to 20 beds, and/or organise accommodation in a camp on own land, with up to 10 accommodation units at most, i.e. for 30 guests simultaneously, and/or organise accommodation in a Robinsonian accommodation facility up to 10 accommodation units, or 30 guests simultaneously.

3. What if the said conditions are not met?

Income and income tax are determined in the manner prescribed for self-employment activities for the renter who doesn't meet all of the said conditions, but gains income from property by renting apartments, rooms and beds to travellers and tourists and organising camps.

4. How is annual flat rate income tax determined?

Annual flat rate income, annual flat rate income tax and income tax surtax are determined by means of a decision brought by competent Tax Administration Local Office. Annual flat rate income tax and income tax surtax determined in a decision is final tax and therefore annual tax return cannot be filed on this basis.
Annual flat rate income tax is determined as the product of the number of beds or camp accommodation units and/or camp-site platform accommodation units or Robinsonian accommodation units and the amount of flat rate tax per bed or accommodation unit. The decision on the amount of flat rate of income tax is adopted by the representative body of a regional self-government unit. The amount of flat rate tax cannot be less than HRK 150.00, nor more than HRK 1,500.00. If the representative body fails to adopt a decision on the amount of flat rate tax (per bed / accommodation unit in a camp / Robinsonian accommodation unit), the amount of flat rate tax is determined in the amount of HRK 750.00.

Amount of annual flat rate income tax is increased by the amount of income tax surtax. 

5. How is annual flat rate income tax determined?

Annual flat rate income tax and income tax surtax are paid on quarterly basis, that is, proportionate to the number of quarters for which the liability is determined.

6. What happens when the authorisation to provide citizen's hospitality domestic services is terminated, or the number of beds or accommodation units change during the year?

When the competent office issues a decision on the authorisation to provide citizen's hospitality domestic services during the year, or a decision to terminate the authorisation to provide hospitality domestic services, the annual flat rate income tax and income tax surtax is determined proportionally to the number of quarters in which the renter was holding the Decision on the Authorisation.

If the renter changes the number of beds or camp accommodation units during the year (increase or reduction of capacity on the basis of issued decisions of competent offices), the Tax Administration will revoke the existing decision as of 1 January of the following year and adopt a new one.

7. Is the renter obliged to issue invoices?

The renter with determined annual flat rate tax on income gained from property on the basis of renting apartments, rooms and beds to travellers and tourists and organising camps, is obliged to issue invoices for provided services. 

The details required in invoices are:

1. number and date of issuing

2. name (title), address and personal identification number of the entrepreneur who supplied the goods or performed services and the designation of the place where the supply of goods or services was performed (number of the point of sale, business premises, shop, etc.)

3. name and surname/name of the recipient of service

4. amount and the common trade name of the delivered goods and the type and quantity of performed services

5. total amount of fee 

Note: exempted from VAT under Article 90, paragraph 2 of the VAT Act.

At least two copies of invoices have to be issued. Taxpayers liable to annual flat rate income tax from renting apartments, rooms and beds to travellers and tourists and from organising camps are not obliged to fiscalize the invoices issued for the provided services.

8. What financial records should the renter keep?

The renter is obliged to keep the Turnover Records (EP​ Form) and record in it the total amount declared in the issued invoices. The renter records every issued invoice in the Turnover Records, whether or not charged. 

9. Is the renter obliged to pay tourist board membership fee?

Under the provisions of the Act on Tourist Board Membership Fees, the renter is liable to pay tourist board membership fee. The renter is obliged to submit the registration of the tourist board membership fee, calculated on the basis of Turnover Records, to the competent Tax Administration Local Office by the end of February for the previous year. 

10. What if the real estate is being rented out to tourists and for housing in the same period?

The taxpayer - resident, who is engaged in the activity of renting and providing tourist accommodation, that is, renting out flats, rooms and beds to travellers and tourists and organising camps on the basis of decision on the authorisation of the competent office authorising the supply of hospitality domestic services, and who determines, on this basis, the annual income and income tax at flat rate, and in the same period and from the same real estate, gains income from property on the basis of rental or lease, is deemed liable to taxation on both basis.

Example: 

The renter holds a decision of the competent office for providing hospitality domestic services relevant for the entire 2020,  (categorisation), and is entered into the taxpayer's register on this basis, and pursuant to which the Tax Administration has issued a Decision on annual income and income tax on this basis. 

The renter, “off-season" rents out the same real estate / accommodation unit under a rental agreement. Income from rent has to be declared to the Tax Administration in order to determine, by means of a decision, the income tax liability on this basis as well.

For example, the renter rents out a room for the whole year as follows: 

• in the period from 1 January to 30 May 2020, he rents out the room to a natural person, under a rental agreement 

• in the period from 1 June 2020 to 30 September 2020, rents out the room to tourists 

• in the period from 1 October to 31 December 2020, he rents out the room to a natural person, under a rental agreement. 

In the said example, in 2020, the renter is obliged to pay annual flat rate income tax from renting and providing tourist accommodation and to pay tax on income from rent.

Important: From 1 January 2020, tax and surtax on income from tourist rentals in flat rate amount are paid according to the location of the real estate or accommodation unit. Accordingly, the deposit accounts are the accounts of the local unit where the real estate, or accommodation unit is located.​

VAT

If the renter wishes to cooperate with the EU taxpayers (travel agencies, advertising platforms etc.) 15 days before the acquisition of service has started, he/she is obliged to apply for VAT ID number.  Application for registration for VAT purposes (P-PD​V Form) is to be submitted to the Tax Administration Local Office for the purpose of VAT ID Number assignment. EU taxpayer does not account for the VAT on the supplied service, it is the obligation of the renter. If the renter is engaged in business activities with the taxpayers from non-EU countries only, he/she is not obliged to request VAT ID number, but has to calculate and pay Croatian VAT for the performed service. Assignment of VAT ID number is not the same as registering in the VAT Register, and the renter is not automatically registered in the VAT Register upon assignment of VAT ID number. Renters who cooperate with EU taxpayers submit the VAT forms (PDV and PDV-S forms) electronically via security level 3 certificate (for example mToken, Fina Soft certificate, token/m-token devices of banks connected to NIAS system) or security level 4 certificate (for example eOI - e-ID, AKD certificate, FinaCert RDC personal and business certificates). 

Renters who cooperate only with taxpayers from non-EU countries may submit the VAT form in paper. 

Croatian VAT has to be calculated for the acquired service at the rate of 25%. VAT forms (PDV and PDV-S) have to be submitted only for the accounting period when service has been received. Zero forms are not to be submitted. Deadline for submitting forms is by the 20th day of the current month for the previous month, and VAT liability is due by the last day in the current month for the previous month (for example, until the end of February for January). 

​​Instructions for VAT payments:

Amount of calculated VAT is paid into the state budget. IBAN: HR1210010051863000160   

MODEL: HR68

Payee's reference number: 1201-OIB 

• Table showing the amounts of flat rates per units of local self-government

• Decisions on the amount of flat rate of income tax
  

[1] the 8 days deadline applies to all the changes affecting the taxable amount (termination, change in the number of beds etc.)

 Rental of real estate by non-residents

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