We checked what the presidential candidates think about the proposal of the Minister of Finance Marko Primorc, that returnees to Croatia will not have to pay income tax for 5 years. We also asked them what they consider crucial for the ratification of the Double Tax Treaty with the USA and whether returning pensioners should pay tax on pensions earned abroad.
The opinions of the presidential candidates on these topics are divided, and these are their answers.
Ivana Kekin, a candidate of the "Možemo" platform, believes that the exemption from the obligation to pay income tax will create new inequalities and injustices in society.
"A bill has arrived in the Parliament, which proposes to release the obligation to pay tax on income from self-employment for a period of 5 years for those of our fellow citizens who will return to the country after having spent at least 2 years continuously abroad. The government interprets this as an incentive to return to the homeland, i.e. as a demographic measure, but it is very questionable what effect this measure will have in reality.
Essential demographic measures are affordable housing, the availability of education, especially preschool, the availability and quality of public health services, the quality of the education system, the availability of cultural content, as well as equal opportunities on the labor market. Exemption from income tax liability for as long as 5 years will only create new inequalities and injustices", Kekin told Croatians Online.
When asked about the ratification of the Double Taxation Agreement with the USA, Kekin says that "considering that the contract was signed two years ago, the Croatian government and the Croatian diplomacy in the USA should be more agile in bilateral diplomacy so that the American side finally implements the process of confirming the contract".
"Regarding the taxation of pensions, pensioners who live in Croatia and have acquired a pension abroad are subject to income tax in Croatia, but the collection of tax depends on whether there is a double taxation agreement with the country from which the pension is paid. I believe that the Government of the Republic of Croatia should definitely make a significant effort to reduce to zero the number of third countries with which Croatia does not yet have an agreement on the avoidance of double taxation. As a party, we stand for a systematic increase of all pensions in Croatia, but also for the abolition of taxation on pensions that are below the average average Croatian salary.Ivana Kekin told Croatians Online.
Independent candidate, entrepreneur Niko Tokić Cartel says that his program emphasizes the equality of all citizens.
"I believe that not taxing returnees is not a good way because such measures are discriminatory. Returnees should be freed from unnecessary obstacles, but in such a way that the local population does not feel an unfair advantage is given to the returnees.
The double taxation treaty is crucial to resolve, while pensioners should not be taxed additionally on foreign pensions." Tokić Kartelo told Croatians Online.
Presidential candidate Niko Tokić Kartelo
Independent candidate Tomislav Jonjic believes that the idea is that returnees are not taxed for five years "a cheap propaganda trick that will remain without real useful fruits".
"Changes to our legislative framework are so frequent, and sometimes drastic, that temporary, palliative solutions cannot create the necessary sense of security. On the other hand, not all returnees are in the same real and legal position, our national need is not the same in every social and economic area, and finally, not all Croatian regions are equally developed and equally in need of investment and revitalization of economic, cultural and political life. That is why I think it is necessary to take all these elements into account and to offer a well-thought-out and permanent model whose goal is the demographic and economic revitalization of the whole of Croatia, especially those of its most devastated and vulnerable parts. Double taxation agreements are almost without exception a presumption of thisJonjić told Croatians Online.
He points out that, in addition to emigrants who left Croatia a long time ago and their descendants, we should also work on the return of those who moved away in the last ten years.
"It is necessary to encourage them not only to bring their savings to Croatia, but also to stimulate them to invest the earned money in new businesses in Croatia. This requires strong tax incentives for small entrepreneurs and craftsmen. Everything should be done so that those who are in Croatia do not move out, and those who are already out return".
Jonjić believes that the taxation of foreign pensions is unfair because it additionally punishes emigrants who were already forced to leave their homeland, thereby discouraging their return.
"I think that the taxation of pensions earned abroad is unfair already for elementary ethical reasons: the vast majority of Croats did not emigrate for some lucrative reasons and only because of the desire for better earnings. They were forced, sometimes quite openly, and sometimes indirectly, by the Yugoslav communist regime, just as they have been forced abroad in recent years by the still dominant remnants of that regime.
This means that they were punished by the very fact that they left their hometown and homeland and worked abroad. That is why they should not be punished once again and thus discouraged from coming to Croatia. Because, let's not forget, the prices and costs of living in Croatia are no longer much lower than those in the West. Is it in our interest that a Croatian pensioner spends his pension earned in Germany or Switzerland there, and not in Croatia?!Jonjić pointed out to Croatians Online.
"Any initiative to encourage the return of Croatian emigrants is welcome", says the independent candidate Marija Selak Raspudić.
She announces that, as the President of the Republic, she will focus her diplomatic efforts on the ratification of the Double Taxation Agreement between Croatia and the USA:
"It is a big failure of Croatian diplomacy that this treaty has not yet been ratified. This makes Croatia the only EU member state that does not have such an agreement in force with the USA, which makes the Croatian economy less competitive in the international environment. The ratification of that treaty will be one of the priorities of my diplomatic efforts as the President of the Republic, and I believe that we will achieve it in the first year of my mandate.", she told Croatians Online.
Selak Raspudić is in favor of abolishing the taxation of all pensions.
"Personally, I am in favor of abolishing the taxation of all pensions, not only those that are earned abroad, and my current parliamentary parliamentary group proposed this during the debate on the new round of tax law reform.".
Presidential candidate Marija Selak Raspudic.
Photo: Neja Markicevic / CROPIX
Branka Lozo, candidate of the Dom and National Gathering party, would increase the tax exemption period for returnees for a longer period of time.
"Considering the very unfavorable demographic situation in the Republic of Croatia, due to almost mass emigration of entire young families and low natural population growth, it is necessary to encourage Croatian citizens to return to live and work in Croatia. In this regard, I would advocate that the "grace" period, i.e. the tax exemption period, is up to 10 years after moving to Croatia."
"Double taxation should be urgently prevented, that is, solved by agreements with all countries, on the principle that the tax is paid only once, in my opinion, in the country where the income was generated.
In my opinion, pensioners should not be taxed on pensions earned in other countries, after they return to live in Croatiain", said Branka Lozo.
Three presidential candidates - Zoran Milanović, Dragan Primorac and Miro Bulj - did not submit their answers to our question.
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