Croatian business association pushes for higher profit‑tax threshold

The Udruga Glas poduzetnika (UGP) warns that inflation has pushed an increasing number of Croatian companies into a higher profit‑tax bracket without a real rise in profitability. The current corporate‑income‑tax rate is 10 % for firms with revenue up to €1 million and 18 % above that level. Since the threshold was set in 2021, cumulative inflation of nearly 30 % has caused many firms to exceed the €1 million mark purely due to price increases, while their real purchasing power and profit often stagnate or fall.

UGP has formally submitted a proposal to the Ministry of Finance urging the government to raise the lower‑rate threshold to between €1.3 million and €1.5 million. The association argues that adjusting the threshold to reflect inflation would prevent an unintended tax burden, preserve competitiveness, and ensure a predictable, fair fiscal system for micro, small and medium‑sized enterprises.

The proposal calls for a prompt review of the tax brackets to align them with current macro‑economic conditions and to assess the impact of fiscal measures on businesses facing high operating costs and inflationary pressures.