December 15, 2020 - The Croatian digital nomad visa is getting closer, and the news is getting better. Especially regarding taxation, as KPMG Zagreb explains.
Four months to the day after Dutch entrepreneur Jan de Jong sent an open letter to Croatian Prime Minister Andrej Plenkovic asking him to introduce a digital nomad visa, Narodne Novine (National Gazette) published confirmation of the latest concrete step towards the realisation of that visa on December 11 - a change in the Croatian tax code to include the tax obligations of digital nomads.
Recall that 44 days after that LinkedIn post, Plenkovic met with de Jong and then tweeted his intention to introduce the digital nomad visa for Croatia. A proposed amendment to the Aliens Act was introduced to Parliament the following day, which soon resulted in a change in the law, effective January 1, 2021. The framework for the visa was in place in terms of legislation.
But we were (still are) not there yet. There were plenty of details to be ironed out. What would be the conditions of the visa, how to apply, what about tax obligations etc? As all these things had not been ironed out, it is understandable that further official announcements are pending all the final details being worked out. The most important of these I would summarise as:
Will the visa be physically available on January 1, 2020, or just in terms of legislation framework?
What are the conditions of the visa, for example minimum income requirement?
How much will the visa cost?
How to apply for the visa?
What about tax obligations in Croatia for digital nomads living there?
Big questions, and until we have the answers to them all, we will not have a full picture. But details are emerging, as the various ministries put into place the legal framework. And here is a big one to announce - a law change to reflect the tax obligations to Croatia for digital nomads. Rather than me trying to explain it, the news and explanation would carry a little more weight and authority if it came from a tax authority. Kristina Grbavac, Director of Taxation Services at KPMG Croatia kindly agreed to speak at our recent Digital Nomads for Dubrovnik conference, and I asked her to keep me updated on any update in the tax law for digital nomads. Here is what she sent me:
From 1 January 2021, anyone who is not a citizen of the EU, Iceland, Lichtenstein, Norway or Switzerland could be eligible for a Croatian digital nomad visa of up to one year, as long as the person does not work for or provide services to a Croatian company. The digital nomad could extend this visa for another one year after a six-month physical hiatus out of Croatia.
Coupled with the change in the immigration legislation there has also been a change in the tax legislation: from 1 January 2021 anyone working in Croatia under a digital nomad visa will be exempt from paying Croatian tax on income earned from activities directly related to the status of being a digital nomad.
The legislation passed voting in the Parliament on 4 December 2020, it was approved by the President of Croatia and published in the National Gazette (138/2020) on Friday, 11 December 2020.
Here are the links to:
Relevant is Article 2:
- primitke fizičkih osoba ostvarene po osnovi obavljanja nesamostalnog rada ili djelatnosti za poslodavca koji nije registriran u Republici Hrvatskoj temeljem stečenog statusa digitalnog nomada sukladno posebnom propisu.".
Translation - The income earned by natural persons realised on the basis of performing non-independent work or activities for an employer who isn't registered in the Republic of Croatia on the basis of the acquired status of ''digital nomad'' in accordance with a/the special regulation.
Further changes in the tax legislation are expected which would relieve digital nomads from tax reporting obligations in Croatia. Given the tremendous changes in legislation made for digital nomads, it seems to us that it is only a matter of time until this will be confirmed.
With all of this, Croatia is becoming one of the top countries of choice for digital nomads
For those of you with any questions about tax and digital nomads, I recommend you ask Kristina, rather than me. You can contact her on This email address is being protected from spambots. You need JavaScript enabled to view it.
So what do we know about the visa for sure, what about unofficially, and what do I expect the answers to those remaining unanswered questions to be?
What we know for sure.
The legislation has been passed to allow for the digital nomad visa from January 1, 2021. This is NOT the same thing s saying the visa WILL be available - more on that below.
The Croatian tax code has now been legally amended to reflect digital nomad tax status - see above.
What we know unofficially from Jan de Jong's latest update on LinkedIn.
Having initiated the visa story with that LinkedIn post, de Jong has played an active role in pushing things forward, holding several meetings with ministries to sort out all the details. While not exactly the same as an official ministry announcement, his regular LinkedIn updates on the subject have come with the authority of someone at the heart of the discussions. And yesterday's update gave some information on two of the key unknowns - when will the visa be available, and how to apply?
Currently the Ministry of Finance is working on making the changes to the tax laws - which shall be completed by the end of this year.
Ministarstvo turizma i sporta / Ministry of Tourism and Sport and the Ministry of Interior shall together make efforts to develop an official website where digital nomads can find all information about Croatia’s visa program. On this website it shall also be possible for digital nomads to apply for the visa.
The objective is to have this website live by March, 2021.
You can see the full post on Jan's LinkedIn.
What do I expect from the remaining key unanswered questions?
I refer you to an article I wrote last week regarding the foundation of the Croatian Digital Nomad Association and a visa update. For those without the time to read, my thoughts were that there would be no tax obligation in Croatia (see above), there would be an online application process (see above), and that while technically it could be available on January 1, sometime in the first quarter was more likely (see above). The other things I would expect - but yet to be announced - are:
Minimum income in the region of 1,500 to 2,500 euro a month.
I would expect the visa to cost a maximum of 100 euro.
Guidelines on what constitutes a digital nomad to quality for the visa will be published in due course.
Health insurance will be required.
No criminal record will be required.
No working with Croatian companies or inside Croatia under the terms of the visa.
Please note, these are my opinions, we are still waiting for the official announcements.
None of these things have been officially announced yet, but as the tax law change shows, things are moving forward. Perhaps not quick enough for digital nomads used to instant gratification, but in terms of changing Croatian law, this is cutting edge.
I am sure that when all the details are finalised, the full initial guidelines will be published. We will, of course, bring those to you as soon as we have them, and you can follow the latest on the dedicated TCN digital nomad section.
