Cottage industry and secondary occupation

Crafts Act (Official Gazette 143/13) sets forth the institutes of cottage industry and secondary occupation, which may be performed by natural persons provided they meet particular conditions.

CONDITIONS FOR RUNNING BUSINESS:

  • running the business exclusively by personal labour
  • meeting special conditions of vocational training, appropriate secondary school qualifications or master craftsmen’s examination in case of running activities referred to in the list of associated crafts businesses
  • generating the receipts referring to performance of these activities not exceeding the amount equal to ten average gross monthly salaries in the calendar year in which the person performs the subject activities.
    * The average salary shall be considered the amount of gross monthly salary paid per one person employed by the legal entity in the Republic of Croatia in the period January/August in the year preceding the calendar year in which the activity is performed, published by the Croatian Bureau of Statistics.

The average gross salary per person employed by legal entity in the Republic of Croatia for the period January/August 2013 (Official Gazette 138/13) amounted to HRK  7,941  (10 average gross salaries amounted to HRK 79,410)
The average gross salary per person employed by legal entity in the Republic of Croatia for the period January/August 2012 (Official Gazette 129/12) amounted to HRK  7,867  (10 average gross salaries amounted to HRK 78,670)
The approval for performing secondary occupation or cottage industry shall be granted by the competent county state administration body i.e. administration body of the City of Zagreb in the place of residence i.e. temporary residence of the natural person performing the activity of cottage industry or secondary occupation.

You can download the form here:

The application for entering in the records and issuing the approval for performing secondary occupation and cottage industry.

The costs of registration amounts to HRK 170 (out of which amount HRK 100 refers to costs of issuing the approval). Exceptionally, in the period January 1, 2015 – January 1, 2016 the natural persons shall be exempted from payment of the stipulated costs for issuing approval; correspondingly, the amount of registration costs equals to administrative taxes and totals to HRK 70.00.
The natural person does not thus acquire the status of craftsman but is registered in the register kept by the competent county administration offices, i.e. the administration office of the City of Zagreb.
These new institutes provide for the possibility of additional earnings and in particular for the pensioners.

Privileges for pensioners:

  • by performing the activity of cottage industry or secondary occupation the person shall not acquire the capacity of insured person in obligatory pension insurance
  • the pension shall not be suspended
  • they are not liable to pay the contribution for pension insurance in contrast to the persons employed by other employers who want to use the possibility of additional earning, i.e. unemployed persons.

IMPORTANT NOTE:

Pursuant to the Pension Insurance Act (Official Gazette 157/2013), Article 10, paragraph 6 and referring to Article 175, paragraph 1 the privileges do not refer to beneficiaries of disability pension entitled to it due to professional incapacity for work, acquired in line with the previous regulations, i.e. beneficiaries of disability pension entitled to it due to partial loss of work capacity acquired in line with this Act.

Legal regulations: