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Tax Competitiveness of Croatia and Slovenia as Tourist Destinations

Author

Listed:
  • Tanja Kosi

    (University of Primorska, Slovenia)

  • Štefan Bojnec

    (University of Primorska, Slovenia)

Abstract

The increasing competition in the tourism sector forces tourist destination countries to search for ways to improve their competitiveness. One way is cutting non-cost element of prices such as taxes. The paper examines and analyses the most relevant types of taxes in the tourism sector and presents the corresponding tax rates for Croatia, Slovenia and their rivals in the Mediterranean region. The most significant tax on tourist consumption is value added tax (vat), which is considered in great detail. Within a certain country different vat rates apply to different goods and services consumed by tourists. The overall level of direct taxation of tourists’ consumption is computed as the weighted average vat rates for each European Mediterranean country and the results are compared. Businesses engaged in labor intensive hospitality industry face large share of labor costs and thus considerable payroll taxes. Since a part of taxes can be passed on to tourists through higher prices, we briefly present also overall tax rates on labor incomes and tax rates applied to business earnings.

Suggested Citation

  • Tanja Kosi & Štefan Bojnec, 2010. "Tax Competitiveness of Croatia and Slovenia as Tourist Destinations," Academica Turistica - Tourism and Innovation Journal, University of Primorska Press, vol. 3(1-2), pages 38-52.
    • Handle: RePEc:prp:jattij:v:3:y:2011:i:1-2:p:38-52
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    References listed on IDEAS

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    Cited by:

    1. Tanja Planinc & Marko Kukanja, 2016. "Financial performance of the Slovenian restaurant sector," Tourism and Hospitality Industry 25, University of Rijeka, Faculty of Tourism and Hospitality Management.
    2. Tanja Planinc & Štefan Bojnec & Saša Planinc, 2013. "Analysis of the Financial Performance in the Slovenian Tourism Economy," Management, University of Primorska, Faculty of Management Koper, vol. 8(2), pages 109-123.

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