From 1 January 2015 new laws come into force in the country. There will be a slight increase to salaries from this month as the nontaxable portion of income rises from 2,200 to 2,600 kuna. The nontaxable portion of pensions will increase from 3,400 to 3,800 kuna, whilst the highest tax bracket (40%), will now apply to salaries greater than 13,200 kuna a month from what was 8,800 kuna. The changes mean than salaries will increase by around 115 kuna for those on the average wage, and by up to 900 kuna a month for those earning more than 10,000 kuna a month.
Also from 1 January 2015 a new tax on savings income comes into effect. Saving deposit holders will have to pay an annual 12% tax on savings interest. As an example, someone with 100,000 kuna deposited will now have to pay 350 kuna in annual savings tax. New Gaming Tax laws also come into effect on Thursday, with tax applicable to all betting wins, even those under 750 kuna which were previously exempt.
There were also changes for businesses, with a right to tax relief on re-invested profit from 1 January 2015. The amended VAT legislation enables small businesses to now pay VAT after they receive the money paid for their goods and services, instead of upon the issuance of invoices.
The transitional period for the payment of VAT on construction land also come to end at the end of 2014. From 1 January 2015 land will attract a 25% Value Added Tax.