Great article from HomeRent regarding the obligations of private renters in Croatia. It is worth reading if you are the owner of a villa in Croatia or you are planning to become one.
Obligations for renting villas in Croatia
You are the owner of a luxury villa for rent in Croatia or a family holiday home, and you are starting a rental business? Do you think it is quite simple?
Many homeowners think it is simple to rent villas in Croatia. They are amazed by the number of obligations they have to fulfill, the regulations they have to abide by, and finally, the payments they have to make after receiving permission to provide accommodation services in their villa in Croatia.
First, upon receipt of this Permit, you must, within 15 days, report to the Tax Administration for registration in the Register of Taxpayers (RPO). The application to the RPO is submitted on the RPO-1 form in the competent Tax Administration. Based on the registration in the RPO, the owner receives a tax solution for the payment of a flat income tax, which is the first of many financial obligations of every villa owner who enters the business of renting holiday villas in Croatia.
Below is an overview of all financial and non-financial liabilities of each renter.
1. FINANCIAL LIABILITIES – What do private owners of villas in Croatia have to pay?
Flat income tax for renters.
A new version of the Income Tax Act came into force in 2019, which made decisions on the amount of so-called lump sum for renters left to local self-government units, with restrictions of HRK 150.00 for the lowest and HRK 1500.00 for the highest lump sum. The basis for calculating the lump sum differs by municipalities and cities, but the calculation is the same everywhere:
number of fixed beds x base + surtax = flat tax
You are obliged to pay the flat tax quarterly based on a decision issued by the Tax Administration. You must have a valid Registered Business and register in the Register of Taxpayers (RPO) to get this solution.
Flat-rate sojourn tax
The tourist tax for your luxury villas in Croatia or holiday homes is paid to the account of the local tourist board, where payment slips can also be collected. Payment slips can also be downloaded from the e-Visitor system. The fee can be paid in three equal installments with due dates 31.7., 31.8., 30.9.
Membership fee for tourist boards
All providers of accommodation services in villas in Croatia are obliged to submit to Tax Administration form TZ 2 for the application of membership fees to tourist boards. A large number of landlords overlook this obligation because they do not receive payment slips from the Tax Administration and Tourist Boards. Still, you are obliged to fill in the form, submit it and pay the membership fee to the competent Tourist Board. The form is submitted by January 15 of each year. The calculation is based on the number of permanent and extra beds listed in the e-Visitor system (according to Article 11 of the Tourist Board Membership Act).
VAT on commission of foreign intermediaries (if you use such services)
If you advertise your luxury villa in Croatia or holiday home in Croatia through foreign intermediaries and agencies, companies based in other EU member states, you must calculate and pay VAT on their services, by the 20th of the current month. You calculate and pay VAT for private renters only in those months in which you have realized turnover subject to such taxation. If you advertise your villa in Croatia through Booking.com or Airbnb, you must charge VAT on the amount of their commission at the rate of 25% that is normally charged for such services.
2. NON-FINANCIAL LIABILITIES
Put the categorization board on the accommodation.
Upon receipt of the Decision/Permit on the provision of accommodation services, you are obliged to purchase and display the board of the accommodation category on your holiday home or luxury villa for rent in Croatia. You can buy the board from sellers who are authorized by the Ministry of Tourism to make and sell such boards.
Highlight the price list and issue invoices
In your holiday villa in Croatia, you must have a prominent price list according to which you will issue invoices to guests.
Prominent manner of filing an objection
The renter of a villa in Croatia must allow the guest to submit a written complaint in the accommodation and visibly display a notice on how to submit a written complaint. Then, without delay, confirm receipt of the complaint in writing and respond to the complaint in writing within 15 days from the date of receipt of the complaint. It is mandatory to keep records of guest complaints for one year from the date of receipt of the written complaint.
Keep traffic records
You are obliged to list all issued invoices for accommodation in the villa and holiday home on the EP Form at the end of the calendar year and submit the completed form to the protocol of the Tax Administration. This serves you, but also the Tax Administration, as an insight into the total turnover realized.
Get a VAT ID number
If you are a foreigner renting a villa in Croatia or a holiday home in Croatia, you will also need the corresponding VAT ID number, which you can request from the competent Tax Administration. Also, when advertising a holiday home or luxury villa in Croatia on foreign portals such as Booking and Airbnb, that number will be highlighted on their commission accounts under which you will pay VAT on their services, previously mentioned under financial liabilities.
Report guests to the E-visitor
All guests staying in a holiday home or luxury villa in Croatia are required to register in the e-Visitor system within 24 hours of arriving at your rental villa. You can set the system to automatically check out guests on the day of departure, so you don’t have to worry about that.
3. OTHER LIABILITIES
Highlighting the evacuation plan inside the holiday villa in Croatia is mandatory for everyone. It is not said what that plan must look like, and it is enough to draw it by hand.
First aid for guests
The ordinance stipulates that you are obliged to have a first aid kit in an accessible place in the rental villa in Croatia.
Private renters are not obliged to have a fire extinguisher in their villas in Croatia, but only legal entities. Although it is not prescribed as mandatory, it is more than desirable to get a fire extinguisher and place it in an easily accessible place in your holiday home!
Highlight the sign prohibiting the dispensing of alcoholic beverages to persons under 18 years of age and a smoking ban sign if the same rule applies to your villa in Croatia.
We hope that we have helped all new owners of luxury villas and holiday villas in Croatia with this quick and easy overview of the obligations of private renters. Of course, in addition to all this, you also need a Home Rent travel agency to advertise and book your luxury villas and holiday homes.