To prevent the spread of COVID-19 in Croatia several measures are introduced – all public gatherings and sport events are prohibited, as well as the operation of children’s playgrounds, sports and recreational centers and religious gatherings. All schools, faculties and kindergartens are closed (distance learning is used).
Following business activities are suspended: all cultural activities (museums, theatres, cinemas, libraries, reading rooms), exhibitions, shows and fairs; catering activities with the exception of food preparation and delivery services; service activities that are in close contact with customers (hairdressers, beauticians, barbers, pedicures, massage parlours, saunas, swimming pools); all sports competitions and organized trainings, sports centers, fitness and recreation centers; dance schools; driving schools and foreign language schools.
Employers are required to organize work from home where possible, to cancel meetings or organize teleconferences and use other technologies to hold remote meetings; to cancel business trips outside the country and to prohibit workers who have fever and respiratory distress from coming to workplaces.
As of 24th March – citizens are not allowed to leave their respective local government units (this does not apply to commuting, health workers, press and citizens who require immediate medical care). Local transportation is temporarily suspended. Taxi transportation is allowed, but with special instructions; taxi providers are obliged to implement strict safety measures.
Considering that a large part of economic activities is affected by COVID-19 situation (whether suspended or because of transport disruptions it is not possible to carry out certain businesses), the Government has launched a series of measures aimed at maintaining the economy’s liquidity and helping to preserve jobs within the companies.
Government support to companies in the amount of HRK 3,250 per job retained that was valid for March is now raised to HRK 4,000 net for months April and May. Additionally, to this amount the Government will cover all contributions (pension, health, etc.), provided that employers do not lay off workers. The implementation of this measure over the period of three months will cost the Government 8.5 billion HRK with the aim to preserve jobs.
The companies who are unable to work due to the COVID19 situation will be fully exempted from tax obligations (income and earnings taxes and contributions) for the months of April, May and June, whereas the companies whose work is significantly impeded due to situation, will be exempt to certain extent.
Companies with a 20 to 50 percent drop in revenue are entitled to postponement of payment with possibilities for payment through interest-free instalments of up to 24 months.
Companies that generate less than HRK 7.5 million in revenue (93% of businesses) and have a revenue drop of more than 50% are completely exempt from tax payments.
Companies making more than HRK 7.5 million (7% of them) are exempt from tax payments in proportion to the drop in their revenues in April, May and June. In the case of a 20 to 50 percent drop in income, tax payment postponement is allowed, and the companies have the right to a 24-month instalment payment of their tax obligations without interest rates. In the case of 50 to 100 percent drop in income, they will pay their tax obligations proportionally (for example; if they had a 75 percent drop in income, then out of a total of 100 percent payable taxes they will pay 25 percent).
Furthermore, also medium and large companies, need to pay VAT only after payment from issued invoices has been collected.
The deadline for the submission of the annual financial statements for 2019 is postponed to 30 June.
Public authorities will procure at least 60 percent of agricultural products from domestic Croatian production or processing. As an extraordinary measure, all surplus of milk will be purchased from domestic milk producers.
Special support is also being introduced for the tourism and agriculture sectors, which are among those most affected by this situation.
In order to assure and maintain the liquidity of the business sector, the Croatian Bank for Reconstruction and Development has offered quality support programs for companies. Banks offered a moratorium on repayment of loans to citizens and businesses for a minimum period of three months.
All relevant information on COVID-19 in Croatia can be found on www.koronavirus.hr. The page is daily updated with most important information for citizens and entrepreneurs.