Croatian Employers' Association Demands Repeal of Special Coffee Tax

The Croatian Employers' Association (HUP) is pressing for the abolition of Croatia's special tax on coffee, describing the step as a clear and immediately workable measure to reduce the tax and administrative burden on the sector. According to the business portal seebiz.eu, securing the repeal will be the central priority of the newly elected leadership of HUP's Coordination of Coffee Producers, Processors and Distributors.

Under the current regime, roasted coffee in Croatia carries a special tax of €0.80 per kilogram, while coffee extracts, essences and concentrates are taxed at €2.65 per kilogram. HUP notes that beyond the payment itself, companies must handle the associated obligations of tax calculation, record-keeping and regular reporting.

Rates weigh hardest on processed coffee

The gap between the two rates is substantial: the charge on extracts, essences and concentrates is more than three times the per-kilogram rate applied to roasted coffee, placing the heaviest load on the soluble and instant segment. HUP argues that coffee is a product of broad everyday consumption and that its additional taxation should be assessed in the context of the stated goals of easing the burden on the economy and strengthening competitiveness. Abolishing the levy, the association says, would directly reduce the tax component of the cost of coffee and simplify operations for companies.

• Roasted coffee: special tax of €0.80 per kilogram
• Coffee extracts, essences and concentrates: €2.65 per kilogram
• Accompanying obligations: tax calculation, record-keeping and regular reporting

New leadership elected for a two-year term

At the electoral session of the Coordination, which operates within the HUP Association of the Food Industry and Agriculture, Ivan Artuković of Franck was elected president. Laurentiu-Florin Dimitriu of Nestlé Adriatic and Tomica Gulin of Anamarija Company were elected vice-presidents. The leadership was chosen for a mandate of two years.

"Abolishing the special tax on coffee is a clear and workable relief measure. Reducing tax and administrative costs would open additional room for investment, modernisation and development of the sector. We expect this long-standing request to be translated into a concrete change in tax policy," said Artuković, president of the Coordination.

Fiscal neutrality, price caps and the grey economy

HUP frames the request against a backdrop of volatile raw material prices and rising demands for businesses to adapt, arguing that domestic tax policy plays an important role in creating more stable conditions for entrepreneurs. The effects of the special tax, the association says, should be evaluated by looking at the total burden on the sector, the cost of administering the tax and the room left for economic development.

The association further argues that at record input costs, taxing a basic food item such as coffee threatens domestic processing. It also points to what it calls a contradiction that should be removed: the simultaneous existence of a special tax on coffee and price restrictions. In HUP's assessment, abolishing the levy would be fiscally neutral and is necessary both to strengthen competitiveness and to curb the grey economy.

The Coordination said it will continue its dialogue with the Ministry of Finance and other competent institutions with the aim of abolishing the special tax on coffee and improving operating conditions for the sector.