From some Croats who have found jobs in Ireland, Tax Administration demands they pay their income taxes twice.
Software developer Danko Kozar arrived in Dublin in May 2015. He took a job at Amazon, one of the four most successful IT companies in the world. The only thing missing for his complete happiness was for his wife and two children to join him in Ireland, reports Jutarnji List on November 7, 2016.
“The baby was still small, so my wife and I decided that it would make no sense to travel with such a young child because we were not willing to take the risk. Therefore, my family remained in Croatia for a few months, and them later joined me in Ireland”, said Kozar.
Due to the fact that members of his immediate family had remained in Croatia for those few months, Kozar is now one of those Croats who must pay their income taxes to both Croatia and Ireland, which amounts to several thousand euros, calculated on the income which he earned during the time he was separate from his family. Kozar is one of few Croats who have personally inquired about their possible tax liabilities at the Croatian Tax Administration, because he wanted to live and work legally, as prescribed by Croatian law.
The topic of taxes on income earned abroad has been much talked about on the internet in recent days, and it turned out that many Croats are quite uninformed about the applicable laws and regulations. And they say that those Croatian nationals who live and work abroad, but whose immediate family members remain living in Croatia for more than 183 days a year, are considered tax residents who are obligated to pay taxes to Croatia on income earned abroad.
In the worst position are those who live and work in countries with which Croatia has not signed an agreement on avoidance of double taxation, because in this case they have to pay taxes twice: once in the country where they live and work, and then again in Croatia. When it comes to Ireland, Croatia has signed an agreement on avoidance of double taxation with the country, but that does not mean that Croats who emigrated to Ireland are completely exempt. On the contrary – they are still required to taxes to Croatia, but taxes paid in Ireland are deducted from the final tax bill to be paid in Croatia.
However, it seems that there is not much reason for Croats who live abroad to panic and start hiding from the Croatian Tax Administration. If they do not report to the tax authorities that they have been separated from their immediate family, Croatian tax collectors cannot fine them, so the taxes are ultimately paid just by those few among them who specifically want to respect the law.
The Tax Administration has not provided information about the number of Croatian nationals who this year paid taxes on income earned abroad.
