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TAX REFORM Tax treatment of tipsIncome tax – tax treatment of tips

The tax treatment of tips is determined

· The amount of the tax-free tip is determined at €560 x 6 = €3360 (for payments in cash and card)

· The amount of the tip above the tax-free part is determined as a final long income at a 20 % rate (tax calculation without contribution)

Method of implementation

· For every charged bill (in cash or card) the amount of the tip is entering the process of fiscalization

· The monthly amount of the tip collected by the employer shall be reported accordingly to the employee's personal identification number through a “JOPPD form”

· Income tax is calculated on the amount that exceeds the tax-free amount of the tip

What exactly is meant by that.

1) The waiter will have to put the tip onto the receipt as an item. AND OF COURSE ONE WILL HAVE TO BE CAREFUL NOT TO EXCEED €3.360 PER YEAR.

Picture 2 (an example of a receipt in croatian)

2) Before calculating the salary for the previous month, the accountant will have to submit a list of TIPS/per waiters - look at picture 3 in order to know how to calculate the salary and submit the “JOPPD form”. Anything larger than €3.360 per year will be taxable

p.s. a tip is not a product, it's a service



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