Virtual currencies keep expanding all over the world, and Croatia is not the exception. A Bitcoin store has opened in Croatia (Split) in order to sell bitcoin and other virtual currencies.
The shop will be offering sales of Bitcoin (BTC), Ethereum (ETH) and other important cryptocurrencies.
The project has been presented by the Croatian crypto exchange Bitkonan. Bitkonan is planning to expand the shop to other cities in Croatia, including Zagreb and Rijeka.
Croatia has decided to create a self regulatory body known as UBIK. The main goal of this blockchain and crypto regulatory body is to spread the knowledge about these technologies and how they can influence the life of many Croatian citizens.
Croatia is showing a growing interest in virtual currencies and ICOs, and it is very important for investors and individuals to have a better regulatory framework operative in the country. (via UTB, 2018)
From a legal point of view, in Croatia crypto currencies are not regulated nor prescribed by any law.
Taking this into account, Croatian Tax Administration has issued few opinions about tax treatment of crypto currency with reference to the judgment of ECJ (C-264/14, on 22 October 2015).
In the judgment it states that, referring to a 2012 report by the ECB on virtual currencies, bitcoin, belonging to the so-called “virtual currency” with a bidirectional flow, users can purchase and sell on the basis of an exchange rate and, when it comes to their use in the real
world, such virtual currency is similar to other convertible currencies.
According to the aforementioned ECJ judgment, crypto currencies trading in Croatia is considered a financial transaction and the income generated by the sale of crypto currencies is subject to corporate income tax on the basis of capital gains, since it is the gain on the basis of the sale of that currency, which is an equivalent to money market instruments.
If a company is selling cryptocurrencies, typical corporate income tax is applied.
This is 12% if the net profits were under HRK 3 mil (appx. EUR 405.000) per year, or 18% if they were higher. A person running a solo business of reselling or mining cryptocurrency, the same conditions apply.