Croatia flat-rate entrepreneurs tax reforms spark political backlash

Croatia flat-rate entrepreneurs tax reform Tomislav Ćorić Ivana Marković

The Croatian government’s anti‑inflation package introduces changes to the taxation of flat‑rate entrepreneurs (paušalci). Finance Minister Tomislav Ćorić announced that entrepreneurs with annual revenue up to €40,000 will see no increase in tax contributions from 1 January 2027, covering about 83.4 % of the sector. For higher brackets, contributions rise by €1,336 (30 %) for the sixth bracket and €3,033 (66 %) for the top bracket. Ćorić defended the measures, saying the reforms improve fairness and will have little impact on the state budget.

Opposition SDP MP Ivana Marković criticised the changes, accusing the government of penalising small, legally‑registered landlords and renters while informal rentals remain unchecked. The Association of Entrepreneurs (UGP) demanded transparency – publication of impact analyses, MSP‑test results and the criteria used to draft the reforms – and warned it could organise protests if its demands are ignored. Several business groups, including the Croatian Chamber of Crafts, expressed support for the most‑affected brackets being left unchanged. The package also includes a new tax on excessive profit margins for medium‑ and large‑size firms.

Entities: Association of Entrepreneurs (UGP) · City of Bjelovar · City of Zagreb · Croatia · Croatian Government · Croatian Union of Employers (HUP) · Flat‑rate entrepreneurs (paušalci) · Glas poduzetnika (UGP) · Ivana Marković · Ministry of Finance (Croatia) · Ministry of Finance of Croatia · State Inspectorate of Croatia

Claims

What the coverage asserts, and how well corroborated each claim is across sources.

[● 5 SOURCES] UGP demanded publication of impact analyses, MSP‑test results and criteria used for drafting paušalci tax changes. (existing)
[● 3 SOURCES] SDP representative Ivana Marković criticised the tax measures, saying they penalise small legal landlords and paušalci while informal rentals remain unchecked. (existing)
[● 4 SOURCES] Higher tax brackets for flat‑rate entrepreneurs will increase contributions by €1 336 (30 %) for the sixth bracket and €3 033 (66 %) for the highest bracket. (existing)
[● 5 SOURCES] The tax changes are part of an anti‑inflation package announced in May 2024 that also includes measures on short‑term tourism rentals and profit‑margin taxes. (existing)
[● 2 SOURCES] UGP warned it may organise protests if its demands for transparency and participation are not met. (existing)
[● 3 SOURCES] Flat‑rate entrepreneurs (paušalci) with annual revenue up to €40,000 will not face increased tax contributions from 1 January 2027. (belongs)
[● 4 SOURCES] Finance Minister Tomislav Ćorić announced the concession for low‑income paušalci and the higher‑bracket tax increases. (belongs)
[○ 1 SOURCE] UGP also requested transparent, uniform criteria for closing business premises and equal treatment across Croatia. (UGP statement)
[○ 1 SOURCE] UGP demanded that the government disclose criteria used for closing business premises and ensure consistent application nationwide. (new)
[● 3 SOURCES] SDP politician Ivana Marković accused the government of targeting honest small landlords and flat‑rate entrepreneurs with new tax measures while informal rentals remain unchecked. (new)
[○ 1 SOURCE] The anti‑inflation package also introduces a tax on excessive profit margins for medium and large firms. (new)
[● 2 SOURCES] Finance Minister Tomislav Ćorić announced that flat‑rate entrepreneurs with annual revenue up to €40,000 will not face increased tax contributions from 1 January 2027. (new)