As of 1 January, the nontaxable portion of income will rise from 2,200 to 2,600 kuna, and the ceiling for nontaxable portion of pensions will go up from HRK 3,400 to HRK 3,800.
Also, the highest 40-percent tax bracket will be shifted from HRK 8,800 to start for salaries higher than 13,200.
According to estimates of the Croatian National Bank, amended income tax legislation will "release" some HRK 2.1 billion, which means 0.8% of the country's GDP, and the central bank forecasts that actually 0.3% of GDP would be transferred into personal consumption, while 0.5% will be spent on households' deleveraging or on covering possible higher bills for utilities.
According to estimates of accounting experts, the new tax system will enable recipients of a monthly salary of HRK 5,500 to have now a monthly wage higher by HRK 118, while salaries in the amount of HRK 10,000 will rise by about 300 kuna, and those above HRK 11,000 will go up by an additional HRK 950.
When it comes to the introduction of 12% tax on interest on savings, this measure will encompass some 400,000 savings deposits holders, according to figures provided by the Finance Ministry.
For instance, a holder of a savings account with 50,000 kuna deposited will be obliged to pay 140 kuna annually as tax on interest on savings, while those savings of 100,000 kuna entail paying 350 kuna in annual tax returns.
As of 1 January, businesses can exercise tax relief on reinvested profit provided that they invest this profit into long-term assets and provided that they retain or increase the number of employees.
The amended VAT legislation enables small businesses to pay VAT after they receive the money paid for their goods and services, while so far businesses have had to pay VAT immediately upon the issuance of invoices.