October the 12th, 2026 – The Croatian Government has proposed the abolition of pension tax, with around 541,000 people affected by the decision.
The Croatian Government has sent to Parliament a proposal for amendments to the Income Tax Act that proposes the complete abolition of tax on pensions. Poslovni reports that according to the proposal, the current reduction of the tax liability on a pension would be increased from 50 to 100 percent for the part of the pension on which income tax is calculated at the lower rate. In practice this means that income tax on such pensions would amount to zero euros.
The Government cited the example of a pensioner who receives a pension of 800 euros. With a personal allowance of 600 euros, the tax base amounts to 200 euros. If a tax rate of 20 percent is applied to it, the tax liability amounts to 40 euros, but under the current system it is reduced by 50 percent so the pensioner pays 20 euros in tax. Under the new proposal that tax would amount to zero euros.
It is estimated that the abolition of tax on pensions will reduce the revenues of local self-government units by around 180 million euros. Finance Minister Tomislav Ćorić earlier stated that around 541,000 pensioners would be covered by this change. The Government plans for the amendments to enter into force at the beginning of 2027.
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