The Croatian Chamber of Trades and Crafts (HOK) has applauded the government’s decision to raise the VAT registration threshold to €60,000, a move designed to lighten the load on small business owners.

“This tax relief will go a long way towards strengthening the operations and competitiveness of the smallest businesses—especially those under flat-rate taxation,” said HOK in a statement on Thursday. “It also paves the way for introducing a new flat-rate tax bracket.”

HOK President Dalibor Kratohvil welcomed the change, calling it a “positive step” that will benefit many tradespeople. “The government’s willingness to address the challenges facing the trade sector is encouraging. We will continue to push for further reforms through dialogue,” he said.

This policy change follows HOK’s sustained efforts to advocate for lower tax burdens. Just last week, the organization submitted nearly 100 proposals for economic relief to various authorities, with 61 directed at the Ministry of Finance. These included measures such as allowing part-time craft work to count towards pension contributions, permitting retirees to continue operating crafts, reducing sick leave liability for employers to 14 days, and introducing tax-free allowances for workers’ sports activities.

Finance Minister Marko Primorac confirmed the VAT threshold increase on Wednesday, describing it as a “step forward” for small businesses, particularly those in the early stages of growth. Speaking on HRT’s Central News, Primorac stressed the importance of balancing support for small businesses with the need to protect VAT as a critical revenue source.

“The threshold cannot be raised indefinitely,” Primorac warned, noting that VAT remains the country’s most significant tax revenue stream.

For many small business owners, however, the measure offers a much-needed reprieve. HOK believes this is just the beginning, pledging to continue pressing for reforms to make Croatia a more hospitable environment for its smallest economic players.