Tomislav Coric, Finance Minister, at a government meeting on May 28, 2026. Photo: Government of the Republic of Croatia
Croatian Finance Minister Tomislav Coric presented a package of anti-inflation measures on Thursday that includes a tax on “excessive” profit margins, changes to the taxation of flat-rate businesses and short-term rental providers, and the abolition of pension taxation from next year.
Coric said that Croatia is experiencing a period of heightened geopolitical tensions and an energy price shock affecting almost all economies around the world.
Croatia, led by the Croatian Democratic Union, HDZ, has one of the highest inflation rates in the European Union, standing at 5.4 per cent in April. The government hopes the measures will help curb further price growth.
Speaking about the planned tax on excessive profit margins, Coric said it would apply to large and medium-sized companies. “Excessive profit margins, where they exist, will be taxed at a rate of 50 per cent,” Coric said. The tax would apply to all companies whose profits exceed the average of the previous three years by more than 15 per cent.
He also announced changes to the flat-rate taxation system in tourism. “The flat-rate tax in the second group will increase from 70 to 100 euros, and in the first group from 100 to 150 euros,” the minister said, referring to private accommodation providers.
Hana Matic, vice president of the association “Save Small Landlords,” told N1 television that small landlords are furious.
“This is an arrogant and shameless move by people who do not understand the sector. After increasing flat-rate taxes for landlords by as much as 500 per cent last year, they demanded price reductions of 10 to 20 per cent, and now they are announcing another tax increase,” Matic said. “What’s next? Will they start beating us up?” she added.
There are around 130,000 private accommodation providers in Croatia’s tourism sector.
Drazen Jovic, president of the Independent Croatian Trade Unions, NHS, supported the planned measures on Thursday, particularly the tax on excess company profits. However, he added that the burden of inflation should not be shifted onto workers through a possible wage freeze in the public and state sectors. “The unions unanimously support the introduction of a tax on excess profits. This is something the NHS has been advocating for years,” Jovic said.
“Yes, the time for belt-tightening is coming. Some of us warned that it would, especially during the pre-election period, when money was being handed out left and right,” former Prime Minister and former HDZ president Jadranka Kosor wrote on X.
