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🇭🇷 Croatia /Disasters & Emergencies

Zagreb and Zagorje Set to Lose Earthquake-Recovery Tax Exemption

From Večernji List · () Croatian

Translated from Croatian and summarized by DistantNews. Read the original for the full story.

At a glance

News Official statement New plan
  • Croatia’s ministry has proposed ending a tax exemption for Zagreb and Krapina-Zagorje County while retaining it for three other earthquake-affected counties.
  • The proposed changes would take effect on January 1, 2027, if adopted.
  • The ministry said reconstruction funds had been fully used and local revenues had increased, while officials in Krapina-Zagorje said they would review the proposal before commenting.

Zagreb and Krapina-Zagorje County could lose a tax exemption introduced after Croatia’s earthquakes, under urgent legal changes proposed by the Ministry of Physical Planning, Construction and State Assets.

The ministry has opened a public consultation on amendments to the law governing reconstruction in areas affected by earthquakes in Zagreb and four counties. A 2023 law exempted Zagreb and all four counties from setting aside 6% of income-tax revenue for decentralized public services. The ministry now says that exemption is no longer needed in Zagreb and Krapina-Zagorje, while it should remain in Sisak-Moslavina, Zagreb County and Karlovac County, which retain disaster-area status.

The proposed amendments would apply from January 1, 2027. Krapina-Zagorje County Prefect Željko Kolar of the SDP said the county would first study the ministry’s explanation. “I cannot comment before we see the explanation,” he said.

The ministry said national and European Union reconstruction funds had been fully used between 2020 and 2025, while local and regional government revenues had risen significantly. Between 2021 and 2025, the exemption left Zagreb and the counties with €275.6 million at their disposal. The state budget also provided €407.4 million for decentralized services, the full minimum financial standard, rather than the €131.8 million that would have been paid as the difference between that standard and the 6% tax share.

Zagreb alone received about €202 million from 2021 to 2025 under the exemption, compared with an estimated €18.8 million in assistance under the regular arrangement. The ministry expects €68.6 million in additional reconstruction-related transfers by the end of this year, alongside €83.5 million in state funding for the 2026 minimum financial standard. It also said the EU Solidarity Fund provided €1 billion, which has been fully spent. Of 1,309 contracted projects worth €3.81 billion, 1,241 have been completed, while 209 projects worth €2.52 billion continue to receive funding through the Recovery and Resilience Mechanism.

I cannot comment before we see the explanation.

· Željko KolarThe Krapina-Zagorje county prefect responded to the proposed withdrawal of the exemption.
About this summary

Originally published by Večernji List in Croatian. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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