The Law on Value Added Tax (2012; entry into force from 2013) stipulates a standard VAT rate of 21%. A reduced rate of VAT at 12% shall be applied to the supply of school literature and original literature issued in the form of printed publication or electronic publication (literary works – fiction, children’s literature, scientific and popular science literature, reference literature, religious literature, literary memoirs – and their translation), except supply of the abovementioned literature online. The reduced tax rate is also applied to supply of newspapers, magazines, newsletters and other periodical publications in the form of printed publication or electronic publication (except for the supply of the abovementioned periodical publications) which are issued at least once in three months and one-off circulation that exceed 100 copies. Reduced rate of tax shall be applied to accommodation services in tourist accommodation sites as well.
VAT is not imposed on the following cultural services: theatre and circus performances, concerts, events intended for children, events of amateur art groups and events intended for charity purposes, visits to State recognised museums, libraries, exhibitions, zoological gardens and botanical gardens including cultural and cultural education measures organised by such institutions, services of provision of public access to and use of the information present in the library collection; the royalty received by the author for his work and use thereof, as well as the consideration received by the performer and phonogram producer for the subject of related rights and use thereof (Article 52).
There have been several changes in the law in recent years due to the economic crisis. At the end of 2009, the Parliament endorsed a national macro-economic stabilisation plan proposing an increase in VAT from 18% to 21%; in 2011 VAT was increased to 22%, and in 2013 was reduced to 21%. The reduced VAT rate was increased from 5% to 10% in 2009 and from 10% to 12% in 2011.
The Micro-enterprise Tax Law was introduced in 2010, small enterprises (also in the field of creative and culture industries) may benefit from this tax.
The Law on Personal Income Tax (adopted in 1993, came into force in 1994) determines income tax levels. The tax is imposed on income acquired by a natural person. A progressive personal income tax is introduced, the lowest rate being 20% (it is also imposed on the income generated from authors’ royalties).
Cabinet Regulation Number 899 on Procedures for the Application of the Norms of the Law On Personal Income Tax (by the Law on Personal Income Tax) stipulates that a taxpayer has the right to deduct from the amount of author’s fees (royalty) the expenditures of the author of scientific, literary and artistic works, discoveries, inventions and industrial models related to the creation, publication, performance or other utilisation of the works (25-50% depending on the type of the author’s work).
Law on State Social Insurance (adopted in 1997, in force from 1998) determines the
status of self- employed people, who earn their income by individual work
(includes those who receive royalties – copyright or neighbouring rights
remuneration). In 2019, the total rate of social insurance payable is 35.09%:
24.09% by the employer and 11% by the employee. Social insurance payments for
self- employed persons and those receiving authors’ fees are minimum 5%.
The Law on Enterprise Income Tax (2017; came into force in 2018) stipulates that the tax is 20% of taxable income. The tax shall not be imposed on state or municipality funded institutions and on associations or foundations having no purpose to make profit. Article 12 defines tax relief for donors.
The Public Benefit Organisation Law (2004) defines public benefit activity: it is an activity that provides a significant benefit to society or a part thereof, especially if it is directed towards charitable activities, protection of civil rights and human rights, development of civil society, education, science, culture and promotion of health and disease prophylaxis, support for sports, environmental protection, provision of assistance in cases of catastrophes and extraordinary situations, and raising the social welfare of society, especially for low-income and socially disadvantaged person groups.