The main purpose of the Project was to determine the connection and mutual causality of the tax and hidden tax burden and their influence on the development of hotel companies in Croatia.
The part on tax burden focused on income tax and value added tax. Also relevant is the (non)-existence of tax reliefs, deductions, allowances, exemptions, incentives as factors that determine the complexity of a tax system.
In Croatia, the current reduced VAT rate of 10% is only applied to accommodation services or accommodation with breakfast, half-board or full board in all kinds of commercial catering establishments. The same VAT rate is charged on agency fees in connection with these services. Food provision services (half-board or full board) and agency fees are not included in the reduced tax rate.
The section on the hidden tax burden included an analysis of social security contributions and hidden fees.
Apart from taxes, the Croatian fiscal system includes a whole list of hidden fees, the number of which or the way in which they are calculated is not fully known. The Project focused on those fees, charges and non-tax expenditures that are important from the position of hospitality business: monument fee, utility service fee for the use of town land and water allowance. It seems that the most burdensome fees are the monument fee and other parafiscal charges, such as the fees to the Croatian Composers’ Society (ZAMP) and the Croatian Public Television subscription.