Croatian Government confirmed yesterday further set of measures that are aimed at job protection and postponement or relief of taxes to aid the economy. Note that it is estimated that cost of all measures announced by the government for the three months could amount to HRK45 bn which is app. 11% of GDP.
The Croatian Prime Minister on Wednesday revealed the second set of measures to aid the economy while combating the coronavirus pandemic, which is the largest crisis of its kind in the world in recent years. He stated that for Croatia this is the biggest crisis since the Homeland War and the situation is demanding since they cannot with any certainty foresee how long the crisis will last. Therefore, the government has approved the proposed measures yesterday.
The approved measures are following:
- The amount of HRK 8.5bn is dedicated for job retention in March, April, and May. The support for wages in the amount of HRK 3,250 in March, is raised to a net salary of HRK 4,000 for April and May. At the same time, the state will pay the contributions on HRK 4,000 net income, which amounts to HRK 1,460 per employee. In total, the Croatian government will pay HRK 5,460 per employee for April and May.
- All taxpayers, which are due to regulation during current crises forbidden to produce goods or provide services or if the pandemic significantly impedes their business, will be fully or partially exempt from paying corporate income tax, payroll taxes and salary contributions due in April, May and June 2020. The companies with a drop in revenues between 20% to 50% will have the right to defer taxes and will be able to pay them in 24 monthly annuities with no interest. Businesses with a revenue of less than HRK 7.5m and with a drop in revenue higher than 50% will be fully exempted from corporate income tax, payroll taxes and salary contributions.
- Payment of the value added tax may be deferred until the invoices issued are collected.
- The deadline for submission of the 2019 annual financial statements is postponed to 30 June and the obligation to pay a fee to the Financial Agency (FINA) for their publication is abolished.
In addition to above-mentioned measures, the Government proposed to monitor implementation of the measures and economic aid packages brought to combat coronavirus crisis on the Financial Agency’s (FINA) digital platform. This platform will enable submitting an application for appropriate measures, collecting the information necessary for the decision making and creating a reporting system for monitoring the implementation of the measures.