Croatia: 2021 Census – Disastrous Downward Spiral in Population and Demographics

During the past week the 2021 Census results in their entirety and detail are out for Croatia and the fact that there is less Serbs living in Croatia, less than 34% of total population in towns under which law of bi-lingual signage on public buildings, offices and institutions is regulated, has hit hard the politicians in Croatia pursuing the interests of Serbia within Croatia. The Census has shown that Croatia’s population is comparatively and significantly lower by  413,056 persons or 9.64 percent than what it was in the 2011 Census. To compare this within the 912,432 (18.7 percent) people lost in Croatian population since 1991 (beginnings of Serb aggression against Croatia) then the last decade has lost almost half of the three-decade loss! That is indeed alarming.

According to the 2021 Census final Bureau of Statistics report, Croatia’s population is 3,871,833, of which 1,865,129 are men (48.17 percent) and 2,006,704 are women (51.83 percent). The 2021 Census shows that the share of Croats in the national structure of the population is 91.63 percent, Serbs are 3.20 percent, followed by Bosniaks with 0.62 percent and Roma with 0.46 percent in Croatia. 99.24 percent of the population included in the census have Croatian citizenship, while foreign citizens account for 0.74 percent or 28,784. According to religious affiliation, there are 78.97 percent Catholics in Croatia, 3.32 percent Orthodox, and 1.32 percent Muslims. The Croatian Bureau of Statistics states that there are 4.71 percent of non-believers and atheists, while 1.72 percent did not answer the question about religion.

The total number of inhabitants decreased in all counties across Croatia and compared to the 2011 Census the largest relative decrease in the population number was found to be in the Slavonia-Syrmia (Srijem), Eastern continental part of Croatia that saw horrific destruction and ethnic cleansing of Croats and non-Serbs during the 1990’s Serb aggression against Croatia. Hence, the largest decreases in population compared to 2011 are shown in 2021 Census as follows:  Vukovar-Srijem County 20.28%, Sisak-Moslavina County 19.04%, Pozega-Slavonia County 17.88%, Brod-Posavina County 17.85% and Virovitica-Podravina County 17.05%.

The 2021 Census also shows that in Croatia the share of the population aged 0 to 14 is 14.27 percent, and the share of the population aged 65 and over is 22.45 percent. With high unemployment and low job creation figures Croatia’s pension and welfare system is bound for total ruin and unsustainability unless, of course, state foreign debt and EU handouts increase and stay rooted as the main bolts holding up for many a barely adequate living standard on life-support.

What happened to the almost 10 percent of population lost in the past decade in Croatia is the question to which the answer automatically comes to the lips of most: overwhelmingly – emigration! Leaving one’s homeland in search of a better life and work. Low birth rate accounts for a lesser decline in this drastic and alarming population decline.  Women in Croatia of child-bearing age have an average of 1.44 children, which is not only below the 2.1 needed for replacing a country’s population, but it is among the lowest in the countries of the region and not enough by far to gather enough taxes towards paying for pensioner outputs.

The 2021 Census data did not surprise demographers, but neither did it surprise the Croatian public, since experts have been warning for years that Croatia is demographically impoverishing, that the impoverishment is accelerating and that it will have negative implications on numerous segments of life and work. With these Census results, the momentum of depopulation has been confirmed. Nothing surprised here, nothing happened that was not expected. Despite all the calls of alarm to governments in at least 15 years to actively intervene in the issue of demographic revitalisation, there have been no or very little positive developments, but, rather, Croatia is collapsing demographically more and faster.

If we take into account that Croatia was (an unwilling) part of the Kingdom of Serbs, Croats and Slovenes in 1918, of  Kingdom of Yugoslavia in 1931, and thirty years later part of the communist regime of Federative People’s Republic of Yugoslavia (known as the Socialist Federal Republic of Yugoslavia from 1963), until independence in 1991, the population structure itself was significantly different in terms of parameters such as nationality and age structure. In 1991, which will be remembered for the beginning of the horrific Homeland War that arose in the brutal Serb aggression against Croatia, the population of independent Croatia was 4.7 million. The war of Serb aggression against Croatia, which destroyed and displaced hundreds of thousands of human destinies, ten years later proved to be undoubtedly the biggest, if not the only, culprit for as many as 350,000 people less in the total population number recorded in the 2001 Census. A decade after that, in 2011, which sealed the period of one of the largest numbers of unemployed, economic crisis and political turmoil, a minus of another 150 thousand people was recorded. 2021 Census alone reduced the population of Croatia by more than 400,000. The young, thirty-year-old country lost a quarter of its total population since 1991, almost half of which was lost in the past ten years.

The structure of the population, according to demographic forecasts, showed an increase in the number of older people, because the birth rate is declining. Quite logical. A policy that omits clear goals of education that can be implemented in practice and the encouragement of employment in long-term sustainable sectors, a housing policy that does not consider the standards of young people at the beginning of their independent living, the absence of a clear, strong pro-natal policy and numerous other far-reaching measures have put Croatia in a position that we would not wish on anyone. Perspective, prosperity and well-being have become nothing more than black-humoured nouns, the true meaning of which no one except a handful of the privileged Croatian caste had the opportunity to enjoy. Maybe they won’t.

This is not acceptable from the point of view of Croatian national interests and some solution must be found. The most obvious solution lies in the wealth of numbers, demographic and economic potential that lie within the Croatian diaspora. Everyone knows that it has been staring Croatia proper in the eyes for more than two decades. Croatia’s Presidents, Prime Ministers, Parliamentarians…the birds in the trees… have all been singing praises to the diaspora, calling masses to return. Yet no firm, clear and positive result minded pathway and national strategy, bar small snd pathetic government conditional cash handouts of up to 200,000 kuna (26,000USD) upon return, have been put in writing and legislation by any of them. All simply pretending they want Croats from the diaspora to return yet official government assistance for this has been nothing more than a degradable, fleeting band aid!

When the initial results of 2021 Census came out in January 2022 Prime Minister Andrej Plenkovic attributed the cause to the population decrease to Croatia’s entry into the European Union in 2013. As a reminder, as the economic crisis in Croatia lingered, unemployment hovered above crushing and devastating 46 percent  , Croatia was, naturally, hit by a large wave of emigration after joining the EU, especially in 2014 and 2015. In the last wave of emigration, Croatian citizens mostly chose Ireland and Germany as places for a new life. Although about 9 percent in 2021 unemployment rate in Croatia still factored as the highest among the EU states. On course, as numbers of working age people emigrated from Croatia its unemployment rate showed up in figures of reduced percentage of unemployment. It seems that EU funds have helped to somewhat patch up job opportunities in Croatia but obviously not enough is done to attract significant percentage of working age people lost to Croatia in past decade and beyond.

The results of the latest Croatian census have shown the brutally real reasons for disappearing classrooms and long waiting lists for places in nursing homes and aged care facilities that have long been well over a decade long. It is not known who, when and if the Croatian governments will even try stopping this indescribably worrying trend. Because, if Croatia officially remains a nation of old people, will it simply turn into just one huge summer holiday house for foreigners and seasonal returnees with deep pockets? Will young people continue to leave Croatia or will those who, despite everything, decide to stay in it just surrender to the flow of time and face their own old age in insecurity and on the verge of poverty? And maybe over the edge?

The Prime Minister then suggested that population decline in Croatia was about “broader trends” while, apparently, referring to the trends of emigration of the population from the countries of Eastern Europe that had also joined the EU. To me it all resembles excuses and meaningless rhetoric to pass the time. People that emigrated from Croatia are in their majority still living within the EU, and hence, the government should factor into Croatia’s forward planning and national strategy for economic development and population boost from the lost pool of Croats living outside Croatia.

Some readers here may remember that many Croatians did not accept the 2011 Census results, according to which Serb minority was given the right to bilingualism and the official use of the Cyrillic alphabet in that city of Vukovar. Many suspected the number of Serbs in Vukovar was fabricated to make up the needed minimum 34% of total population for the town and many protested, some were fatally wounded by police for trying to smash the bilingual sings on buildings, many arrested and indicted for criminal act of wilful destruction of public property etc. 

According to Croatia’s Constitutional Law on the Rights of National Minorities, equal official use of the language and script used by members of a national minority is achieved in the territory of a local self-government unit when members of a particular national minority make up at least a third of the population of such a unit. The almost well-deserved vengeful ecstasy many in Vukovar and wider may feel regarding the decrease of Serb population in Vukovar, especially, fits into the fact that Vukovar has been named the city of piety; Serb aggression against it in 1991 was horrific and genocidal. War crimes, especially rapes, have not been at all addressed properly and Serb rapists walk the streets of Vukovar unpunished and unhindered. Amnesty for war crimes prosecution was given to multitudes of Serbs from Vukovar area as bargaining chip in 1998 in the process of peaceful reintegration of that area into Croatia that had until then been occupied by Serb rebel forces and forces from Serbia.

Some politicians and journalists, especially those denying the Serb aggression against Croatia in the 1990’s and trying very hard to equate the victim with the aggressor, will try to convince the world’s public that a reduced number of Serbs living in Croatia is a result of the rights of minorities denial and erosion by Croatian politics. What garbage! Croatia stands out as a country that provides its ethnic minorities with more right, including parliamentary seats, than most countries in the world. It would be correct to say that the Census 2021 results that show less Serbs have occurred in the same way as the reduction of Croats: economic basket case country leading to emigration for work purposes. Some of the rights ethnic minorities have and live in Croatia, such as seats in the Parliament, are often abused by the very minorities who choose not to put Croatia’s interests in the first place by their personal interests. For instance, the Serb parliamentary group in Croatia peddles more towards Serbia’s interests than towards Croatia’s. And the tragedy of this is that those Serbs in the Croatian parliament do not represent the Serbs who fought with Croats to defend Croatia during Serb aggression, but the Serbs associated with the aggression via family and local community connections; they belong to the Croatian rebel Serbs lot.  They have no right to speak with representative authority and credibility about minority rights of Serbs in Croatia because they represent a minority within the Serb minority. But they are viciously loud ad politically corrupt and all but suffocate the Croatian Serbs who defended Croatia from Serbs and Serbia. What a pity! Ina Vukic     

Clamping Upon Croatian Tax Residents Living and Working Abroad

Taxation Office of Croatia in Zagreb

Croatian Tax Administration has recently announced that it will collect income tax on all Croatian residents living and working abroad if they do not file a tax return themselves. That is, on all those who are considered residents of Croatia for Tax purposes.

The 2021 Census recently revealed that Croatia no longer has 4.3, but 3.9 million inhabitants.

“If we compare the data with the final results of the 2011 census, we see that the population decreased by 9.25 percent, or 396,360 inhabitants,” said Lidija Brkovic, director of the Central Bureau of Statistics.

This is a larger decline in population than in the period between the 1991 and 2001 censuses, which also covered the war in the 1990s, when Croatia’s population fell by seven percent, or 346,805 people.

The official Census 2021 data released also shows that in the past ten years Croatia lost almost 112,000 people due to the negative migration balance. That is, there is such a difference between the number of citizens who emigrated from Croatia and those who immigrated. However, it is also estimated that another 120,000 people had in that time also left Croatia without deregistering their residence or permanent abode in Croatia.

The current issue of interest to Croats working and living abroad, who are still considered residents of Croatia, is that appears if they did not apply to have their names deleted from the Croatian Register of Taxpayers, all these citizens, about 230,000 of them, could still potentially be Croatian residents for the purposes of Income Tax liabilities.

The Croatian Tax Administration had in the past couple of weeks reminded these Croatian citizens living abroad again of their possible obligations as tax residents, inviting them to declare their foreign earnings for the previous few years. That is, when it comes to collecting taxes, the statute of limitations is six years, which means that income tax could this year be calculated to a backdate in 2016.

For all those who remained residents of Croatia even though they left Croatia to work in other countries may be facing a taxation liability calculated in the difference in income tax paid abroad in relation to the tax liability they would pay on that income in Croatia.

The calculation of income tax includes not only salaries and pensions, but also, for example, income from dividends, interest on savings, capital investments, real estate rentals, and even investments in cryptocurrencies.

Based on reciprocal arrangements Croatia has with other countries, including their taxation authorities, regarding income of Croatian residents in those countries,  reportedly the Croatian Tax Administration had discovered that a number of citizens did not fulfil their obligation in reporting foreign receipts, and invites them to do it themselves and that in that case it would not calculate in their liabilities any interest rates or impose any fines for not reporting their income to them in previous years. Furthermore, Croatian authorities say that these citizens can count on a more favourable calculation of income tax than was the case in previous years, because in the meantime tax rates have been reduced and the non-taxable part of income increased.

Those who have, in accordance with the relevant legislation, “written themselves off” from the Croatian Tax Register and who have become tax residents of another country no longer have obligations to Croatia, and for those who have remained Croatian tax residents the rules depend on which country they moved to. The difference is in the taxation rates of salaries and pensions. For Croatian citizens who remain tax residents in Croatia after moving, for example, to Germany, Sweden, Estonia, Latvia, Lithuania, Norway, Belgium, Canada etc. the method of exemption from income tax liability to Croatia applies when it comes to pensions and salaries, i.e., income from non-self-employment work because of the reciprocal arrangements between countries. For countries such as Argentina, Australia, New Zealand, South Africa, USA, etc. there is no such exemption as no reciprocal arrangements regarding double taxation has been reached yet, so Croatian tax residents (that is people living in those countries who have not deregistered themselves as residents of Croatia) are required to submit details of their income to the Tax Administration and are subject to taxation.

The Croatian Tax Authority has on its website created a special page with assistance as to VOLUNTARY DECLARATION OF FOREIGN INCOME – FREQUENTLY ASKED QUESTIONS. It is worthwhile visiting that website if you have questions regarding your personal circumstance. https://www.porezna-uprava.hr/HR_obrasci/Stranice/NPP_dobrovoljna_prijava_ino_primitaka.aspx

In any case as the situation varies from country to country where Croatian citizens live and work it is necessary in terms of tax liabilities to determine in advance whether a person receiving the income abroad is a Croatian resident or not. If the person is a Croatian resident, there is an obligation to declare the income received in the Republic of Croatia, regardless of whether there will be taxation in the end, or not.

It seems that many people are “stuck” on that and recently I heard of a person who is a Croatian citizen and said that he took his name off the police/internal affairs and health care register, but not in the tax office because he thought it was automatic. When asked what should be done now to be exempt from tax liability, he answered that the fact that a person deregistered his residence in the residence register kept by the competent ministry as well as the fact that a person deregistered from the Croatian health insurance system speaks in favour of the fact that he is most likely not considered a Croatian resident for tax purposes.

However, as the fact of the centre of vital interests of that person and his immediate family is crucial for the payment of taxes, in this case it is necessary to contact the Tax Administration and fill in the TI Form (see website above) to determine the taxpayer’s residence.

A person who considers that he/she is not a Croatian resident, but a resident of another country may issue a certificate of that country’s residency status from which it must be visible from which date that country considers him/her its resident.

For clarification purposes that some people may find useful, one Croatian citizen states that he deregistered his residence from Croatia, works most of the year in Germany and comes to Croatia on holidays and weekends. He pays all taxes in Germany, but in Croatia his wife and children are in a shared apartment. He wondered whose resident he was? Based on the information given the Tax Authorities of Croatia concluded that the centre of vital interests for this person is still in the Republic of Croatia and that the person is a Croatian tax resident.

Another said that he is permanently resident in Austria, but in the Republic of Croatia he has a house where his parents live and visits them occasionally. The taxpayers answer him that it could be concluded from his information that the person is not a resident of the Republic of Croatia and advises him to submit a certificate of residence from Austria to the taxpayers, which will show from which date Austria considers him its resident.

Croatia has a Double Taxation Avoidance agreement with 66 countries but paying taxes in another country is not considered a fully settled obligation if the countries have not agreed on an exemption method for a certain type of income. Tax residency and citizenship are not synonymous. The tax residency of natural persons is prescribed by the General Tax Law and is generally determined according to the residence or usual abode of the natural person. A taxpayer who has possession or owns a home in two or more countries is considered a resident of the country in which the family resides. In the case of a single person residing in two or more countries, it is considered that his / her residence is in the country from which he / she predominantly goes to work or perform activities, i.e., in the country in which he / she predominantly stays. Ina Vukic

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