Finance Minister, Marko Primorac, on Thursday presented a bill on an additional one-off profit tax. According to the plan, which government officials are presenting as a windfall tax for companies which had "excessive" profits during the current inflation crisis.

According to Primorac, the new regulation will apply to companies with revenues of more than 300 million kuna (€40 million) this year, who post a profit more than 20 percent higher than their previous four-year average in the period from 2018 to 2021. Any excess profits calculated that way will be taxed 33 percent.

“In these difficult circumstances for households and enterprises, when solidarity should come to the fore and everyone must share the burden of the crisis, it is justified to introduce such a tax for the largest taxpayers that have generated considerable profits despite the difficult circumstances,” Primorac said at a televised cabinet session.

This windfall tax is presented as a one-off, as only excess profits earned in 2022 will be taxed, and will be applied to all companies, regardless of which business they are in.

According to 2021 data, sectors with companies which are likely to fall within this category are in the processing industry – which includes the national oil and gas company Ina – retail, construction, and the finance industry, Primorac said.

He explained that this tax could also be seen as the third bracket of profit tax. He recalled that companies with annual revenues up to HRK 7.5 million pay a tax rate of 10% and those with revenues above HRK 7.5 million pay an 18-percent income tax rate.

(€1 = 7.54 kuna)