October the 2nd, 2025 – Brilliant news for all those drawing their pensions as Croatia vows to scrap pension tax, thus providing a higher monthly income to those in receipt.

As Poslovni Dnevnik writes, the Croatian Pensioners’ Party has announced that Croatia will abolish pension tax next year. In September, after an increase of 6.48 percent due to the adjustment, as many as 474,004 pensioners paid pension tax. This is as many as 66,000 more taxpayers than before the adjustment took place, meaning that in Croatia, pension tax is now paid by more than 40 percent of pension beneficiaries. In September alone, local government units earned 14.7 million euros from the payment of pension tax. The average monthly amount of pension tax paid is 31.12 euros, according to Mirovina.hr.

“After continuous negotiations with Prime Minister Andrej Plenković, the Labour Minister Marin Piletić, and Finance Minister Marko Primorac, the Croatian Pensioners’ Party managed to achieve the complete abolition of the pension tax. Next year, a new Act on Special Tax on Salaries, Pensions and Other Income will be introduced, and all pensions will be exempt from taxation. It has been decided that the Act on Special Tax on Salaries, Pensions and Other Income will go through two readings in the Parliament. One of the main items will be the total abolition of pension tax. After the abolition of pension tax, the standard of living and purchasing power of pensioners across Croatia will increase significantly,” said the Croatian Pensioners Party, which strongly and avidly advocated for the abolition of this tax.

Croatia and the topic of getting rid of pension tax was also a hot topic in the Parliament in September. When asked by the members of Parliament, the Prime Minister promised to consider realistic measures and what the fiscal consequences of abolishing the tax would be for the state budget. Before that, the Minister of Finance himself established that paying a pension tax doesn’t actually make much sense.

At that time, both GLAS and DOSIP announced that they would submit legislative amendments to the Parliament procedure that would completely exempt Croatian pensions from taxation. Pensions aren’t a charity but property, as GLAS president Stanko Borić emphasised, stating that the government is making absolute fools of pensioners. Anka Mrak Taritaš and Dalija Orešković once again called on Prime Minister Andrej Plenković and the government to accept their proposal and give pensioners what they actually deserve. Almost 40 percent of the funds for pension payments come from the state budget, without which average pensions would be significantly lower.

Pension tax is otherwise calculated based on the difference between personal allowance and the actual full amount of the pension. For example, in the case of a pension of 630 euros, tax is paid on 30 euros according to the lower tax rate in the given city. Pensions are paid half of the lowest rate, which in Šibenik, for example, is 20 percent. Therefore, the pension tax rate in this case is 10 percent. This means that a pensioner must pay three euros in tax per month, amounting to 36 euros per year. As pensions increase through adjustment, but also through pension reform, this means that more and more pensioners would eventually fall into the tax bracket. The personal allowance is 600 euros, and the average pension has exceeded that amount. Moreover, by the end of this government’s mandate, it should rise to 800 euros.


 


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