According to Total Croatia News we can confidently predict that there will be no obligation to pay income tax for digital nomads in Croatia.
In August 2020, the Croatian authorities announced they would be issuing a Digital Nomad Visa. The news spread like wildfire amongst the global digital nomad community, creating a lot of buzz, even in the very early stages when one could only speculate about the details.
Now, only four months later, we know much more. The parliament adopted the amendment to Law on Foreigners on the 25th of November. The document regulates the stay of Digital Nomads in Croatia; still, details like taxation and conditions were not specified.
Digital Nomads will be exempt from income tax
On the 11th of December, an amendment to the tax law was published, stating that digital nomads will be exempt from paying the income tax. Article 9 of the Income Tax Law lists all the exemptions to the income tax. Here is a translation of section 26 referring to digital nomads, taken from Total Croatia News:
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.Article 9, section 26 of the Croatian Income Tax Law
In our article, we predicted that digital nomads would be exempt from paying income tax. The Croatian authorities expect to profit from the Nomads’ spending power, not their income. This confirmation adds to the allure of the Croatian Digital Nomad Visa.
Application for Digital Nomad Visa possible from March
The Law on Foreigners will come into force on the 1st of January 2021, but you will have to wait a bit longer before being able to apply for the visa.
Jan de Jong, the Dutch ex-pat and entrepreneur who started the Digital Nomad Visa story in August, is actively involved in the process. He shared on his LinkedIn that the application for the visa will be available from March.
According to Jong, The Ministry of Tourism and Sport along with the Ministry of Interior is creating an official website for the Digital Nomad Visa. The website will contain all the essential information about the visa. It will also serve as a starting point for the application.
We are still waiting to learn about the other requirements. We do know that the visa will allow digital nomads to stay at least a year, with a possibility to re-apply after six months. The current tourist visa enables nomads to stay for no longer than three months.
The digital nomad community is eager to find out what the minimum required income and the cost of the visa will be.