Croatia – respond to COVID-19

The Croatian Government presented number of measures to help the economy with the crisis resulting from the COVID-19 epidemic and proposed amendments to relevant laws in order to create legal framework for the intended measures. Some of them were already adopted in the parliament today.

The measures are focused on preserving working places and helping business with expected cash flow and liquidity challenges.

Among others the measures include postponement of payment of taxes, social contributions and other duties and levies. The postponement is currently envisaged for the period of up to 3 months with possible prolongation on additional 3 months. After that it should be possible to pay the duties in interest free instalments.

Businesses may be granted subsidy in the amount of net minimum wage for the employee retention purposes.

Any subsidy received by the businesses from the State is exempt from income tax.

The Government also intends to agree with the Croatian Bank for Reconstruction and Development and commercial banks standstill period of 3 months for repayment of loans both for businesses and affected citizens and insuring availability of the favorable working capital loans especially for the purpose of payment of salaries.

For municipalities, the Health Insurance Fund and Croatian Pension Fund interest free loans will be granted which should enable them to bridge the gap resulting from the measures allowing postponement of paying tax.

The changes and amendments to the Investment Promotion Act on the promotion of the investment should introduce new supporting measures and a grace period of 3 years for those who are already beneficiaries of the mentioned Act.

These are some of the 63 measures announced by the Government to help the economy in relation to COVID-19 epidemic.

The Government is still working on the details and criteria for these measures.

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