Basic Tax Guide for Digital Nomads in Croatia: what every digital nomad needs to know before going to Croatia?
Croatia has become a popular destination for digital nomads, especially after the introduction of the digital nomad visa in 2021. This guide provides an overview of the main tax issues that digital nomads should consider when settling in Croatia, based on current legislation. In addition, we will explore how the pursuit of a flexible lifestyle impacts these professionals' tax and location decisions.
1. Digital nomad visa in Croatia
Since 2021, Croatia has introduced a special visa for digital nomads, allowing remote professionals to reside in the country for up to a year without having to pay Croatian income tax, as long as their income comes from foreign sources. To qualify, you must prove sufficient income and have valid health insurance in Croatia. The relevant legislation is contained in the Croatian Aliens Act (Zakon o strancima).
2. Taxation in Croatia
Croatia follows a territorial taxation system, which means that income earned outside the country is not taxed, as long as the digital nomad does not become a tax resident. According to the Income Tax Act (Zakon o porezu na dohodak), tax residency is established when a person stays in Croatia for more than 183 days in a tax year. If the digital nomad exceeds this limit, he or she may be considered a tax resident, which will entail global taxation.
3. Social Contributions and Other Taxes
Although the digital nomad visa exempts holders from paying income tax, it does not necessarily exempt them from other tax obligations, such as social contributions, especially if the digital nomad chooses to set up a business in Croatia or hire local services. Social contributions are regulated by the Contributions Act (Zakon o doprinosima).
4. Considerations on the Digital Nomad Lifestyle
Digital nomads often choose destinations like Croatia not only for tax reasons, but also for the search for a more flexible lifestyle and the possibility of integrating into new cultures. The decision to settle in a country can be influenced by a number of factors, including the need to find a balance between professional and personal life in an environment that offers welcome and a vibrant community. Croatia, with its rich history and culture, can provide that sense of belonging that many digital nomads are looking for.
5. Practical Tips and Conclusion
For digital nomads who are considering Croatia as a base, it is crucial to understand the legal and tax requirements to avoid unpleasant surprises. It is recommended to consult a lawyer specialising in international tax law to ensure that all obligations are being fulfilled correctly, avoiding problems with the Croatian tax authority.
Croatia offers a unique opportunity for digital nomads, combining tax benefits with a rich culture and welcoming community. For many, this choice can not only optimise their tax situation, but also contribute to a more satisfying and balanced life experience.
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