Croatia's tax bill would raise costs for higher-earning lump-sum freelancers from January 2027
Amendments to Croatia’s income tax law, sent to the Sabor on 10 September 2026 and reported in detail on 14 September, would reduce the deemed-expense allowance for lump-sum sole traders (paušalni obrt) in the two highest receipt brackets from 1 January 2027. The allowance falls from 85% to 70% in the sixth bracket (annual receipts of €40,000.01 to €50,000) and to 55% in the seventh (€50,000.01 to €60,000). The first five brackets, covering receipts up to €40,000, are untouched, and the minister has said 83.4% of registered obrtnici are unaffected.
Social contributions rise alongside. The contribution coefficient moves from 0.4 to 0.45 in the sixth bracket and to 0.5 in the seventh, lifting monthly contribution liability by 12.5% and 25% respectively. Glas Istre puts the annual cash effect at roughly €1,336 more in the sixth bracket and €3,033 more in the seventh. Separately, the per-bed lump-sum floor for tourist accommodation rises from €100 to €150 in the first category and from €70 to €100 in the second.
Why this matters
The paušalni obrt is the structure most settled freelancers in Croatia actually use, including remote workers who have moved from a digital nomad permit onto a residence route that allows local registration. If your annual receipts sit above €40,000, the combination of a smaller deemed-expense allowance and a higher contribution coefficient raises your effective cost by roughly €1,300 to €3,000 a year depending on which bracket you land in.
The bracket boundaries are the practical detail. Receipts of €39,000 leave you entirely unaffected; receipts of €41,000 move you into the 70% allowance and the 0.45 coefficient. If you are close to the €40,000 line and have discretion over when work is invoiced, the timing of your 2027 billing is worth planning now rather than in December.
Context
This is a bill before the Sabor, not law. It has no Narodne novine citation yet and the figures can change in committee. Reporting indicates the government expects passage by December for a 1 January 2027 start.
Nothing here touches the digital nomad residence permit, which remains exempt from Croatian income tax on foreign-sourced earnings during the permit period and carries an income floor of €3,622.50 per month for 2026. Our Croatia digital nomad visa guide covers that route, and the tax reality behind it explains where the exemption stops.
What to watch
The Sabor’s progress on the bill between now and December. Croatia’s 2027 minimum wage has not yet been set either; the 2026 figure of €1,050 gross stands, and the annual regulation normally arrives in late autumn.