Act on the Amendments to the Income Tax Act
- Increase of personal allowance – the amount of personal allowance increases from EUR 530.90 to EUR 560.00.
- The amounts of personal allowance for dependent family members and disability are also increased.
- The income surtax is abolished.
- Taxation classes – the threshold for applying a higher income tax rate is increased from EUR 47,780 to EUR 50,400.
- The uniform income tax rates of 20% and 30% are abolished, and the new tax rates on income from employment and other income will be determined by local self-government units within the prescribed ranges.
Possible range of income tax rates:
Local governments | Lower rate | Higher rate |
| Municipality | 15% – 22% | 25% – 33% |
| City with < 30,000 inhabitants | 15% – 22,4% | 25% – 33,6% |
| City with >30,000 inhabitants | 15% – 23% | 25% – 34,5% |
| City of Zagreb | 15% – 23,6% | 25% – 35,4% |
The deadline for reaching a decision on the income tax rate for local self-government units is until the end of November 2023, and it will enter into force on January 1, 2024.
The tax rates applied for taxation of final income are increased as shown in the following table:
Type of income | Rate from 2024 |
| Property income generated from rent and lease payments | 12% |
| Income from property rights | 24% |
| Income from disposal of real estate and property rights | 24% |
| Interest income | 12% |
| Income based on receipts from dividends or profit shares | 12% |
| Income from capital based on capital gains | 12% |
| Income from self-employment – flat rate taxation | 12% |
Tips – the non-taxable amount of tips is determined in the amount of EUR 3,360 per year. The amount of the tip above the non-taxable part is taxed as final other income at a rate of 20%. The obligation to submit information about the receipt of a tip to the Tax Administration via an electronic link established for the purposes of fiscalization of cash transactions is also introduced.
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Please keep in mind that legislation tends to change frequently. This article is therefore necessarily based on our understanding and correct interpretation of the law and practice at the time of issuing this atricle. This article will not be updated due to changes in legislation that occur after this article is published.