Flat-rate taxation of rental and organization of accommodation in tourism

Property and property rights tax The Law on Income Tax covers, among other things, property and property rights income tax. In this group of tax liabilities ...

Property tax and property rights

The Law on Income Tax covers, among other things, property income tax and property rights. This group of tax liabilities also includes income from renting and organizing accommodation in tourism (provision of catering services in the household and on the family farm).

The Income Tax Act stipulates min. and the maximum amount of tax

The Ordinance on flat-rate taxation of the activities of renting and organizing accommodation for tourists elaborates the method of determining the amount of the flat-rate tax, the method of payment and the users of funds from this tax. The same is stated in the Law on Income Tax and the Law on Financing of Local and Regional Self-Government Units.

The minimum and maximum amount of the flat-rate income tax are determined by the Income Tax Act (min. HRK 150,00, maximum HRK 1.500,00).

It determines the amount of this tax within the given limits representative body of the local self-government unit i to

- per bed

- per accommodation unit in the camp and / or camp-rest area and

- per accommodation unit in a Robinson accommodation facility.

According to the Income Tax Act, the Tax Administration determines the annual flat income tax and the decision is issued based on the decision of the representative body of the local self-government.

This decision determines the amount of annual lump sum income, annual lump sum income tax and surtax on income tax, the amount of quarterly income tax and surtax on income tax, deadlines for payment of quarterly income tax and surtax on income tax, the amount of flat tax per month. accommodation unit, number of beds, ie number of accommodation units in the camp and / or camp-rest area, ie number of accommodation units in the Robinson accommodation facility, for which an annual flat income tax and surtax on income tax have been determined.

Annual flat income tax and surtax on income tax are paid quarterly, until the end of each quarter, in the amount of 1/4 of the annual flat income tax and surtax on income tax, ie in proportion to the number of quarters for which the liability is determined.

Beneficiaries of income tax funds

Local self-government units use 60% of the funds from the income tax, the rest is paid into the budget of the county to which the local self-government belongs to the equalization funds and decentralized functions. Only from this year (finally) it was decided that the tax is paid according to the place of origin of the obligation and not according to the place of residence.

Similarity with a flat tourist tax

The flat-rate tourist tax is defined by the Tourist Tax Act. By the Ordinance on the lowest and highest amount of tourist tax, the Ministry of Tourism has set the framework for determining the amount by representative body of regional self-government. The lowest possible amount is (so far the highest) HRK 350,00 and the highest HRK 1.000,00 per bed in a household, ie the lowest HRK 200,00 and the highest HRK 500,00 per bed on a family farm.

For accommodation units in camps in the household, this amount is a minimum of HRK 500,00 and a maximum of HRK 1.000,00, and for family farms a minimum of HRK 250,00 and a maximum of HRK 500,00.

It determines the height representative body of regional self-government, indebtedness (decision) is issued by the Main Office of the Croatian National Tourist Board via the eVisitor platform. Beneficiaries of tourist tax revenues are:

3,5% "Fund for the Undeveloped"

2,5% "Fund for United Tourist Boards"

Residue:

65% of the JLS tourist board, of which 30% is paid to the JLS account

15% regional (county) tourist board

20% Croatian National Tourist Board

How has the flat tourist tax been reduced due to extraordinary circumstances?

Ordinance on deferral or exemption from payment of tourist tax for persons providing catering services in the household or on the family farm on 23.3.2020. Due to extraordinary circumstances, the Minister of Tourism reduced the already issued flat-rate tourist tax debts by 50%.

What about a flat income tax?

Contrary to the decision of the Ministry of Tourism, the Ministry of Finance insisted that each holder of the tax decision submit a request for delay the first installments of the flat-rate income tax. The request had to be submitted to the corresponding branch office of the Police Administration as of 30.3. because it is 31.3. the first installment was already due. To those who submitted a request 31.3. the same was not accepted with the interpretation that on that day the first installment was due, which is now considered a tax debt, and for that reason the claims are not accepted.

Controversial actions of the Tax Administration

At the beginning of April, the following announcement appeared on the Tax Administration's website: www.porezna.hr
"Renters who have submitted a request for deferral of tax payment until 30.3.2020, for the obligation due on 31.3.2020. they have exercised the right to defer payment of that obligation until 30.6.2020 June XNUMX, and it will not be written off.

Can renters be exempt from paying a flat tax?

The Tax Administration writes off the tax liability related to the second quarter, ie which they would be obliged to pay by the end of the second quarter, ie by 30.6.2020 June XNUMX, to all landlords, without the obligation to submit a special request. years."

Conclusion

So far, it is quite clear that no tourist traffic or revenue is possible until the end of June. This was also confirmed by the Ministry of Tourism by reducing the flat-rate tourist tax by 50% with a special rulebook and abolishing the flat-rate tourist tax on extra beds.

The Ministry of Finance, having in mind almost the same procedure for adopting the amount of the flat-rate income tax as the tourist tax, could and should have reduced the flat-rate income tax by 50% in the same way. This means that the 1st and 2nd installments of the flat income tax should be written off.

Further measures can be taken during June when the situation with tourist travel becomes clearer, which depends on the opening of borders, lifting of measures prohibiting leaving the residence, banning the operation of catering facilities, banning the gathering of more than 5 people and the like.

Author: Nedo Pinezić, www.nedopinezic.com


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