Croatia/ 5.1 General legislation  

5.1.5 Tax laws

Although legal incentives exist to encourage private support for culture, it can still be considered "marginal" compared to the funding provided by the public sector. The same is true for foundations and funds, despite the Law on Foundations and Funds that was passed in 1995, amended in 2001.

Freelance artists have the right to receive specific tax benefits. An income of less than 20 000 HRK a year is not taxed (approximately 2 740 EUR). Compensation for per diems and travel expenses is not considered part of the income. 25% of authors' fees are not taxed, and another 30% are recognised as business expenses.

Donations made for cultural purposes to associations and other legal entities engaged in cultural activities are not taxed. Donations of up to 2% of the donor's total annual income are recognised as such by law, while donations exceeding this sum must have a certificate issued by the Ministry of Culture.

A zero VAT rate on books has been introduced and additional taxes on cinema tickets have been abolished. In 2012, the regular VAT rate, which applies to other cultural goods and services, was changed from 23% to 25%.

To date, much of the debate on the impact of EU enlargement on culture has been focused on tax policies and a possible re-introduction of a higher VAT rate on books.

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