CROATIA Law and Practice Contributed by: Marko Paulinović and Dino Vukoša, Buterin & Partneri
or eliminated under EU directives or double tax trea - ties. Rental income for natural persons, derived from real estate located in Croatia, is subject to personal income tax at a rate of 12%, calculated on a tax base reduced by lump-sum deductible expenses of 30%. The rental of houses, apartments and rooms for tourist purposes is subject to lump-sum taxation. Capital gains from the sale of real estate are also tax - able in Croatia, as income from property, at a rate of 24% where the property is disposed of within two
years of acquisition or where more than three proper - ties of the same type are sold within a five-year period. For legal entities, gains from the disposal of real estate form part of the corporate income tax base. 8.5 Tax Benefits Croatian tax rules provide some benefits for real estate ownership, including depreciation of buildings for companies (up to 10% annually) and potential VAT recovery on new properties.
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