Hi,
from 1st Jan 2021, Croatia it has introduced a 12 residency permit for business owner (called digital nomads in the regulation), or in another words for "digital nomad is a third-country national who is employed or performs work through communication technology for a company or his own company that is not registered in the Republic of Croatia and does not perform work or provide services to employers in the Republic of Croatia."
The new rule come with a, on the paper, very good tax benefit, as it provides an exemption of income tax for people that digital nomad but it doesn't eneter into details of other tax consideration.
Is there anybody that is familiar with it, in particular:
- Does the tax exception also applies to other sort of income, like for example rental income from property not located in Croatia
- One of the requirement of the legislation is to have a company. Most entrepreneur pay themselves as dividend. Is such dividend part of the 0% tax income in Croatia (obviously you may still be subject of withholding in the country where the company is resident)
- Being the setup such as you have a foreign company and you are tax resident, probably the biggest question here is that usually such setup would incur PE for the company in such country (Croatia), so the company could be considered tax resident in Croatia and pay taxes also in Croatia (according to the Double Tax Treaty between Croatia and the country of incorporation). Moreover it could open to exit taxes in the incorporation country. Does the law say anything about that, or do you have any idea about what are the general guidelines for this? I guess this could be the biggest deal breaker for anybody that has such setup, that is pretty much everybody given that this is a requirement for the digital nomad visa itself.
I looked online but could not find any more specific information
from 1st Jan 2021, Croatia it has introduced a 12 residency permit for business owner (called digital nomads in the regulation), or in another words for "digital nomad is a third-country national who is employed or performs work through communication technology for a company or his own company that is not registered in the Republic of Croatia and does not perform work or provide services to employers in the Republic of Croatia."
The new rule come with a, on the paper, very good tax benefit, as it provides an exemption of income tax for people that digital nomad but it doesn't eneter into details of other tax consideration.
Is there anybody that is familiar with it, in particular:
- Does the tax exception also applies to other sort of income, like for example rental income from property not located in Croatia
- One of the requirement of the legislation is to have a company. Most entrepreneur pay themselves as dividend. Is such dividend part of the 0% tax income in Croatia (obviously you may still be subject of withholding in the country where the company is resident)
- Being the setup such as you have a foreign company and you are tax resident, probably the biggest question here is that usually such setup would incur PE for the company in such country (Croatia), so the company could be considered tax resident in Croatia and pay taxes also in Croatia (according to the Double Tax Treaty between Croatia and the country of incorporation). Moreover it could open to exit taxes in the incorporation country. Does the law say anything about that, or do you have any idea about what are the general guidelines for this? I guess this could be the biggest deal breaker for anybody that has such setup, that is pretty much everybody given that this is a requirement for the digital nomad visa itself.
I looked online but could not find any more specific information
