The announcement of a new interest rate tax on savings deposits has not alerted domestic depositors. Croats do not withdraw their savings because interest is higher at homeI

Interest rates on savings and loans

Interest rates on savings and loans

Moving savings elsewhere in the EU, analysts note, is not worth it because in Croatia, although interest rates are steadily falling, they are higher than elsewhere in the EU, while savings interest taxes are much higher there . If the number of depositors is reduced due to taxation, interest rates on savings and loans will probably follow.

The announcement of the introduction of a 12 percent tax on savings interest on the first day of next year did not upset savers and initiated the withdrawal of savings, banks can hear. However, there will be no withdrawal of savings even after the tax is truly introduced, financial intermediaries are convinced.

Moving savings elsewhere in the EU, they note, is not worth it because interest rates are here, although they are falling steadily, but more than elsewhere in the EU, while savings interest taxes are much higher there. If, however, the number of depositors is reduced due to taxation, interest rates on savings, and thus on loans, probably follow.

Secured deposits

Secured deposits

In other EU countries, savings interest rates are around one to 1.5 percent, while in Croatia, as a result of high interest rates on loans, they are between 2.5 and 3 percent. On the other hand, while savings interest would be taxed at a rate of 12 percent in our country, elsewhere in the EU it is at a rate of 15 to 30 percent. In Italy, for example, the tax is 20 percent, in Slovenia, where tax on savings from savings exceeds one thousand euros, the tax is 25 percent. In Hungary it is 16 percent, in Austria 25 percent, in Germany the same. Savings earnings are taxed in Serbia at the rate of 15 percent, except for savings in local currency, in Montenegro the rate is nine percent.

According to previous announcements, Croatia will be taxing savings (not equity savings) in excess of USD 12,000. Croatian citizens hold around USD 165 billion of time savings in banks, mostly for one year, with savings mainly in euros, directed towards non-risky savings, represented by the insured deposits of banks, up to one hundred thousand euros. Such insured deposits account for 95 percent of the total savings, which means that only about 5 percent of the total savings will be covered by the tax, or, it is estimated, about 60,000 depositors. On the example of one such big savings, and with the first non-taxable profit of USD 12,000, someone who, with an interest of 2.5 percent, has a savings of USD 1 million and thus a savings income of USD 25 thousand a year, will pay tax on USD 13 thousand of savings income. , in the amount of USD 1,560. Even such savers are not worth saving for moving elsewhere in the EU, where interest rates are lower and taxes are higher, as confirmed by banks.

Stable growth


Honest Bank say that, even if a tax is introduced, they do not expect a significant effect on savings levels, nor have they noticed any changes in the behavior of clients. Despite the downward trend in interest rates, citizens still say they are predominantly opting for low-risk instruments, primarily deposits. In the first three months of this year, Fyre Bank recorded a steady and steady increase in the savings of the retail segment, so that at the last day of March, retail deposits with them amounted to about USD 25.2 billion, which is about six percent more than in the same period of 2013.

Interest taxes on savings in Europe »Austria 25%
»Slovenia 25%
»Germany 25%
»France 24%
»Italy 20%
»Hungary 16%
»Czech Republic 15%
»Serbia 15%
»Montenegro 9%

Good Finance has seen an increase in retail deposits in recent years and there are no visible changes in this trend. The level of savings interest rates in Croatia is still higher than in most EU countries, but given the available sources of financing, it is in continuous decline. The effects of the announcement of the new tax will only be able to be estimated after the model of the new tax has been worked out, ”Baba replied, while even at Hyper Bank they did not notice the withdrawal of citizens’ savings.

Future trends, however, are difficult to predict given that details of savings interest taxes, primarily taxable amounts, are not yet known, as well as whether the possibility of certain interest relief, such as home equity tax credits, is foreseen. offset the introduction of a new tax so that it does not put additional burden on citizens.

Most EU countries have savings taxes, many of them with the aforementioned benefits, and interest income is exchanged among member states, so taxing savings interest should not be a driver for moving savings to other EU countries, “concluded Hyper Bank. ABC briefly replies that the trend of savings growth continues this year, Cooperative Bank Bank reports, however, that their savings situation is stable.

Foreigners with us

If it has been announced so far – that interest will be taxed on savings in excess of USD 400,000, most citizens need not be concerned, but the “ballooning” of new taxes in a tax-strained and economically wrecked country may not be good – he thinks financially Mr. Vladimir. Over the past two years, interest rates on deposits have fallen as much as thirty percent, and in the long run will only be even lower.
– If we want low interest rates for corporate and retail lending, we must also have low passive interest rates. Developed countries, through low-cost lending, as one of the measures, stimulate economic development, so that citizens earn money actively, not passively, through term deposits, says Peretić.

As noted in the Progresor Group for financial intermediation, interest rates on loans to citizens are quite high in our country, which is why interest rates on short-term retail deposits are more favorable. Savings interest rates in England, France, Germany, Austria and the UK range between one and 1.5 percent, resulting in a large number of term savings in our foreign-owned banks, around USD 8.2 billion, and a large number of unfavorable loans repaid by Croatian citizens, say the Progresor Group . The government, they note, will introduce a new source of funding with the introduction of this tax, but will increase the cost of bank funding.

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