ZAGREB, Nov 27 (Hina) - Amendments the Croatian government will move regarding changes to the income tax law propose that earnings declarations be formulated by the Tax Administration and not submitted by citizens, that the purchase
of medicines should not be a tax benefit, and that a fourth, 45 percent income tax rate on monthly pays exceeding 21,000 kuna (EUR2,840) be introduced.
ZAGREB, Nov 27 (Hina) - Amendments the Croatian government will
move regarding changes to the income tax law propose that earnings
declarations be formulated by the Tax Administration and not
submitted by citizens, that the purchase of medicines should not be
a tax benefit, and that a fourth, 45 percent income tax rate on
monthly pays exceeding 21,000 kuna (EUR2,840) be introduced. #L#
The government's amendments propose binding the Tax Administration
to organise earnings records from its own files and files of state
administration and local self-government bodies.
This will take time but the concept which had citizens submit
earnings declarations themselves has been abandoned, Deputy
Finance Minister Damir Kustrak told reporters on Thursday.
Property, depending on the type, has already been recorded anyway,
he said.
As regards tax benefits, the government's amendments propose the
base may be reduced to pay private health insurance or to cover the
costs of health services and the purchase of orthopaedic aides, for
which citizens have to produce bills. The tax base could thus be
reduced to a maximum 12,000 (EUR1,620) in one year.
On the other hand, tax benefits would not be recognised for the
purchase of medicines, which Kustrak justifies with difficulties
in proving the need for a specific drug, etc.
The government also proposes introducing another, 45 percent
income tax rate on wages over 21,000 kuna
The amendments further propose taxing monthly wages below 3,000
kuna at a rate of 15 percent, those below 6,750 at a 25 percent rate,
those below 21,000 kuna at 35 and those above it at 45 percent.
Interest on housing loans would also be subject to tax benefits,
namely those below 12,000 kuna annually.
Kustrak further said that changes to the income tax law and the law
on compulsory contributions would increase net salary amounts by
2.5-3.25 percent.
The government will adopt an amendment moved by the Croatian
Peasants' Party proposing that farmers who receive income
subsidies pay contributions at a privileged rate. They would pay
health and pension contributions at half the usual rates.
The amended income tax law should go into force in January 1 and
would apply to salaries for January, which are paid in February.
(hina) ha sb