The Ministry of Finance has opened for public consultation draft laws that, from 2027, change taxes and contributions for craftsmen with income above €40,000.
From next year, craftsmen operating under the lump-sum system with annual income up to €40,000 will not see increased obligations to the state, while those with higher incomes will have to set aside significantly more. According to the proposals of two laws that the Ministry of Finance opened for public consultation on August 1, 2026, the new provisions will apply from January 1, 2027, reports Klikni.hr.
The change affects two groups of lump-sum taxpayers. The first group has income between €40,000 and €50,000, and the second between €50,000 and €60,000. In the tax system, the recognized expense-the amount deducted from income before tax is calculated-is reduced. The previous 85% expense rate for all lump-sum taxpayers will, from 2027, apply only to those with income up to €40,000. For the middle tier, this percentage drops to 70%, and for the highest tier to 55%.
At the same time, contributions, calculated via a coefficient multiplied by the average salary, are also increasing. For insured persons with income up to €40,000, the coefficient remains at the current 0.40. For the middle tier, the coefficient rises to 0.45, and for the highest to 0.50. The basis for calculation in 2026 is the average salary for 2025, which is €1,993, according to Klikni.hr.
A craftsman with income of €39,000 remains in the lowest tier, and nothing changes for them. They currently pay approximately €291 per month in contributions and €720 per year in tax, totaling around €4,212 annually.
A craftsman with income of €49,000 currently pays the state around €4,374 per year, and from 2027 will pay around €5,728. That's an increase of about €1,354, or 31%. Their contributions rise from €291 to €327 per month, while tax increases from €882 to €1,800 per year.
A craftsman with income of €59,000 currently sets aside around €4,554, and from 2027 will pay around €7,605. The difference is approximately €3,051, which is a 67% increase. Their contributions rise from €291 to €364 per month, and tax from €1,062 to €3,240 per year.
The Ministry cites as a reason that the number of independent craftsmen has increased from 100,297 to 164,117 in eight years, almost exclusively due to lump-sum taxpayers. According to the draft, a lump-sum craftsman at the highest level has a net income about 43.5% higher than a worker with the same gross income. The proposer believes that the tax changes will bring local government units an additional approximately €23.5 million in revenue.
In the context of the tax burden on entrepreneurs, an analysis by the think tank Tax Foundation shows that Croatia has some of the best capital investment incentives in Europe. Among 33 analyzed countries, Croatia ranks second with a weighted figure of 87.2%, just behind Lithuania at 88.2%. Italy is third with 76.3%, reports Financije.hr.
Estonia, Georgia, and Latvia have a 100% incentive level because they only tax distributed profits, not reinvested ones. The lowest figures are recorded by Norway at 60.7%, Poland at 59.3%, and Hungary at 58.3%. The average for all analyzed countries is 72.1%. In Croatia, incentives for machinery and intangible assets are 96.5% each, while for industrial buildings they are 73.8%. For comparison, Slovenia's total write-off figure is 65.3%, and the US average is 94.5%.
