Freelancers in Croatia are not required to register formally unless they wish to set up a sole trader business. Croatia allows freelancers to work through an ugovor o djelu, or contract for specific work, without formal registration. However, freelancers can also register as sole traders.
*Please be aware that we do not update this information in real time, so you should verify that the law has not changed recently.
Taxation and VAT Obligations for Freelancers in Croatia
Freelancers working in Croatia must adhere to the country’s tax requirements, which include both income tax and VAT obligations. Please review the new ranges established after the official introduction of the EURO as legal tender in Croatia. Tax rates can vary depending on the type of contract:
Income Tax: Freelancers earning under 300,000 HRK (around €40,000) can qualify for a favorable tax rate.
Artists and other freelancers under copyright contracts may see different effective tax rates, with some income taxed at 30% or 55% depending on the contract type.
Social Contributions: Freelancers must contribute 10% to pension and social funds.
VAT: Freelancers with an annual income above the VAT threshold must register and collect VAT.
The standard VAT rate is 25%, but certain services may be eligible for reduced rates of 13% or 5%.
Freelancers earning under 26,400 HRK annually pay a reduced income tax rate of 12%.
Invoices in Croatia must comply with VAT laws, including accurate details about both freelancer and client. Each invoice should include:
Freelancer and client information
VAT details (if applicable)
Description of services rendered
Payment terms and relevant tax rates
For freelancers looking to establish a sole trader business, the process involves a few key steps:
Register with the Local Business Office: Complete the necessary forms and submit them to the Croatian Craft Register.
Provide Personal Documentation: This includes ID, certifications, and any licenses relevant to your freelance work.
Create a Business Plan: Outline your costs, equipment, and operational needs.
Obtain a Business Bank Account and Stamp: Required for official documentation and transactions.
Marketing and Bookkeeping: Begin client outreach and establish a system for managing finances and records.
Choose a Freelance Structure: Either work through individual contracts or establish as a sole trader.
Consider the Digital Nomad Visa if planning to stay longer term.
Understand Your Tax Obligations: Register for VAT if income exceeds the threshold and calculate income tax based on earnings.
Set Up Invoicing and Finances: Maintain compliance with invoicing requirements and manage financial records.
Market Your Services: Use both digital and traditional methods to attract clients.
Consult with a Tax Advisor: Get guidance on tax benefits or incentives specific to freelancers in Croatia.
With a flexible registration process and competitive tax rates, Croatia provides a freelancer-friendly environment with opportunities to connect with both local and international clients.