| TAXPAYER | CORPORATE INCOME TAX | |
|---|---|---|
| 1. A company or another legal or natural person resident in the Republic of Croatia, who is permanently and independently engaged in an economic activity for the purpose of deriving a profit, an income or a revenue or other assessable economic benefits. | ||
| 2. A resident permanent establishment (an inland business unit) of a non-resident entrepreneur. | ||
| 3. A natural person who derives income pursuant to the income tax regulations, if he/she declares that he/she intends to pay profit tax instead of income tax. | ||
|
4. An entrepreneur – a natural person who derives income from small
business or the activities equalized therewith, if: - total revenue in the preceding tax period exceeded of HRK 2,000,000,00 or - total income in the preceding tax period exceeded of HRK 400,000,00 or - the value of long-term assets exceeds HRK 2.000,000,00 or - employed more than 15 employees on average during the preceding tax period. | ||
| 5. Exceptionally, the state administration bodies, bodies of regional and local self-government, the Croatian National Bank, state institutions, institutions of units of regional and local self-government, state institutes, religious communities, political parties, trade unions, chambers, civic organizations, artists associations, volunteer fire companies, technical culture communities, tourist boards, sports clubs, sports associations and unions, open-end investment funds established and operating in accordance with the law, endowments and foundations, if they carry out an economic activity and the non-taxation of this activity would result in their obtaining of unjustified privileges on the market, are liable to pay corporate income tax for this activity. | ||
| 6. Every entrepreneur that is not classified among the entrepreneurs listed in Items 1 – 5 and is not liable to pay income tax according to the provisions of the Personal Income Tax Law and the profit of whom is not taxed elsewhere. | ||
| Note: Open-end investment funds established and operating in accordance with the law are not liable to pay corporate income tax (profit tax). | ||
| CORPORATE INCOME TAX BY WITHHOLDING | ||
| 1. An inland paying agent that pays to foreign entities-recipients (non-residents) who are not natural persons, | ||
| 2. The permanent establishments of a non-resident entrepreneur, when they pay to the parent company interest, as well as royalties and other intellectual property rights (copyright, patent, licensing, trade mark, design or pattern, production procedure, production formulas, draft, plan, industrial or scientific experience and similar rights). Exceptionally, the withholding tax shall not be paid if considerations are recognized as the revenues of a resident permanent establishment of a non-resident entrepreneur. The withholding tax shall be paid for all services paid to persons having their permanent establishment or headquarters in the countries, except for the European Union Member States, in which a general or average nominal profit taxation rate is lower that 12.5% and the country is published in the list of countries issued by the finance minister. | ||
| TAX BASE | CORPORATE INCOME TAX | |
| Profit determined pursuant to the accounting regulations as the difference between revenues and expenditures before the profit tax assessment, increased and reduced in accordance with the provisions of The Profit Tax Law. | ||
| CORPORATE INCOME TAX BY WITHHOLDING | ||
| Gross amount of a consideration paid by a resident payer to a non-resident recipient. | ||
| TAX RATE | CORPORATE INCOME TAX | 20% |
| CORPORATE INCOME TAX BY WITHHOLDING | ||
| 15% 20% for all services paid to persons having their permanent establishment or headquarters in the countries, except for the European Union Member States, in which a general or average nominal profit taxation rate is lower that 12.5% and the country is published in the list of countries issued by the finance minister. | ||
| TAX REGULATIONS | Profit Tax Act (Official Gazette of RC 'Narodne novine' No. 177/04, 90/05, 57/06, 80/10, 22/12). | |
| The Regulations concerning profit tax (Official Gazette of RC 'Narodne novine' No. 95/05, 133/07, 156/08, 146/09, 123/10, 61/12, 146/12). | ||
Details on the Croatian Employment Service’s aids for job preservation during the Coronavirus outbreak (COVID-19)-2021
The Governing Board of the Croatian Employment Service (“CES”) on their meeting held on 7th January 2021 has issued decision on changes to the conditions of using the aid for the job preservation in activities affect by COVID-19 (January and February 2021). Also, The Governing Board of the Croatian Employment Service (“CES”) announced extension of the aid for the shortening working hours (for period January-December 2021) and the extension of the aid for sheltered workshop and business units for the employment of persons with disabilities (period January-June 2021).
Aid for the job preservation in activities affect by COVID-19 for January and February 2021.
The changes to the aid enabled the use of the aid to employers which felt the consequences of the disaster caused by the earthquake in Sisak-Moslavina, Zagreb and Karlovac counties.
Employers from these areas whose business processes are significantly reduced or disabled by the objective reasons will be entitled to receive an aid in the amount of HRK 4,000 per full-time employee, or a proportional part for part-time employee according to the number of part-time hours, regardless of their activity and turnover.
Namely, the objective reasons for obtaining aid are: significant damages caused by an earthquake at business or production facilities and / or the inability of employees to come to work so that normal business process or production cannot be established.
Additionally, more information on the aid itself can be found in the latest edition of our extraordinary tax newsletter.
Aids for job preservation during the Coronavirus outbreak (COVID-19) – shortening working hours
- Availability of the aid
Aid is available to all employers conducting business activity and employing 10 or more persons.
It is important to note that the right to use the aid have employers who have registered the activity and registered in the system of insured persons of the Croatian Pension Insurance Institute until the last day of the month preceding the month of aid application.
- Employees eligible for aid
The aid is available for all full-time employees which were employed by the last day of the month preceding the month of aid application.
Further, aid cannot be received for the following:
- Co-owners with more than 25% owner's participation, founders;
- board members, directors, procurators, etc.;
- Workers who are on a notice period, remote work;
- This does not apply to employee representatives on management and supervisory boards, or other appropriate bodies that control the business activity;
Additionally, employers can receive aid only for the employees who were employed by the 31st December 2020.
In addition, the conditions of the aid stipulate that it may be granted only if employers request the same for a certain minimum percentage of employees (in relation to the total number of employees):
a) Employers with 10 to 50 employees can receive aid if the application has been submitted for at least 20% of the workers,
b) Employers with 51 or more employees can receive aid if the application for support has been submitted for at least 10% of the workers.
- Criteria
The basic criterion when applying for the aid is the expected decline in the total monthly working hours of all employees employed on a full-time basis in the month for which aid is requested (minimum 10%). Also, the decline in the total working hours of employees must be associated with certain temporary disturbances in the production and business process.
In this regard, the connection with business disruptions is proven by the realized drop in revenues / receipts in each month for which aid is requested of at least 20% compared to the same month last year and one of the following reasons:
- drop in orders through termination or amendment of the contract with the customer / customers, written statement of customers on the drop in orders for the month for which aid is requested;
- temporary inability to contract new jobs;
- temporary inability to deliver finished products or contracted and paid raw materials, machinery, tools;
- Impossibility of new orders of raw materials, tools and machines necessary for work.
Exceptions:
- Employers operating in the manufacturing sector (group C according to the NACE classification) can receive aid if the decrease in income / receipts in the observed period is less than 20%, but they must prove one of the stated reasons in each month for which aid is requested.
- If the employer has been operating for less than 12 months: the month for which aid is requested is compared with the month preceding the month of application for aid.
- Submission of application for aid
Applications for aid can be submitted for period January – December 2021 (aid is granted for month following the month in which application for aid was submitted). The exception is aid for January, which will be approved for applications submitted by January 31, 2021.
Employers applying for aid have to:
- Describe the reasons for the expected decline of at least 10% in the total fund of working hours of all employees in the month for which aid is requested, accompanied by supporting documentation proving the expected decline;
- Adopt an Agreement or Decision on the application for the use of the aid;
- Provide information on the expected number of employees for whom support is requested;
- Provide information on the expected decline in income / receipts in the month for which aid is requested compared to the same month of the previous year;
- Submit records of working hours.
It is important to note that the application is automatically extended to the next month so it is not necessary to submit a new application for each month, however, the employer have to submits the following supplemental documents to the application on a monthly basis:
- monthly records of working hours for the month in which the employer uses the aid (the application will not be valid in the month for which no records of working hours have been submitted),
- data on the actual realized decline in income in the month for which support is requested - VAT returns (the request will not be valid in the month for which data on the realized decline in income have not been submitted).
Accordingly, mandatory documentation on the decline in income and monthly records of working hours has to be submitted by the following dates:
a) from 1 February to 28 February: income and working time records for January 2021 (for the application submitted by 31 January)
b) from 1 March to 31 March: income and working time records for February 2021 (for the application submitted by 31 January)
c) from 1 April to 30 April: income and working time records for March 2021 (for the application submitted by 28 February)
d) from 1 May to 31 May: income and working hours for April 2021 (for the application submitted by 31 March)
e) from 1 June to 30 June: income and working time records for May 2021 (for the application submitted by 30 April)
f) from 1 July to 31 July: income and working time records for June 2021 (for the application submitted by 31 May)
g) from 1 August to 31 August: income and working time records for July 2021 (for the application submitted by 30 June)
h) from 1 September to 30 September: income and working time records for August 2021 (for the application submitted by 31 July)
i) from 1 October to 31 October: income and working time records for September 2021 (for the applications submitted by 31 August)
j) from 1 November to 30 November: income and working time records for October 2021 (for the applications submitted by 30 September)
k) from 1 December to 31 December: income and working time records for November 2021 (for the applications submitted by 31 October)
l) from 1 January 2022 to 31 January 2022: income and working time records for December 2021 (for the application submitted by 30 November)
- Aid amount
The aid is granted for the temporary introduction of shorter working hours of full time employees, up to maximum of 90% of working hours.
In this regard, the value of the amount of net hourly compensation for shortening working time is calculated according to the following formula: up to HRK 4,000.00 divided by the monthly fund of full-time hours for the month for which aid is requested, multiplied by the number of hours for which aid is provided .A overview of the amount of co-financing by the CES depending on the number of working hours can be found on the CES website.
It is important to emphasize that for employees whose amount of contracted or prescribed net salary is lower than HRK 4,000.00, the amount of contracted or prescribed net salary is taken into account in the calculation of net hourly compensation.
Moreover, the aid may not be used during the annual leave and / or in periods when the employee does not work for justified reasons specified by law, other regulations, rulebook or employment contract, and when these periods are not related to the aid. .
According to the approved aid, the CES will also refund the social security contributions proportional to the amount of the aid (based on the information from the Tax Authority).
- Limitation
The employers that have receive support may not:
- Determine overtime work for employees for whom support has been granted;
- Employ workers in jobs that can be performed by employees for which support has been granted;
- Use the work of posted workers or occasional work of pupils or students;
- Contract or order work at a separate place of work (remoted work) to employees for which support has been granted.
Also, an employer that has requested aid for more than 50 employees will have to return received funds in case it performs any of the following activities from the moment of receiving the aid up until December 31st 2022:
- pays a dividend or share of profits or other equivalent receipts that are considered as distribution of profits for any tax period,
- if it allocates own stock or own business shares to members of the management board and / or executive directors and / or procurators and / or other persons authorized to run all or part of the company,
- grants the right to optional purchase of stock or any other right based on the value of own stock to the persons referred to in point 2,
- pays any amount to the persons referred to in item 2 such as: bonus for achieved results, reward for performing results above the non-taxable amount prescribed by the regulations governing personal income taxation and other similar receipts taxed as income from self-employment or other income, in accordance with regulations governing personal income taxation,
- acquires its own stocks or its own business shares.
More information of the aid itself can be found on the CES website.
--
Croatian VAT ID Number for Taxable Persons Established in the European Union (01.01.2015)
1. Taxable persons from European Union Member States, who supply goods and perform services on the territory of the Republic of Croatia, for which the place of taxation is in the Republic of Croatia, or whose supplies of goods exceeds Croatian supply threshold or if they opt not to apply Croatian supply threshold of HRK 270.000 (appx. € 36.000), are obliged to request from the Tax Administration the allocation of VAT ID number. The structure of VAT ID numbers is HR (country code) + Personal Identification number (OIB). Taxable persons from European Union Member States, to whom a Croatian VAT ID number is allocated, are obliged to file a VAT tax return in the Republic of Croatia from the moment of issuance of a VAT ID number.
2. In order to obtain a VAT ID number a taxable person must submit forms: a) Application for registration for value added tax purposes (P-PDV Form) and b) Application for the assignment of personal identification number (OIB). Forms are available on the Tax Administration’s web site www.porezna-uprava.hr in part Porez na dodanu vrijednost & EU.
3. Necessary forms must be submitted to Tax Administration, Regional Office Zagreb, Avenija Dubrovnik, 32, Department for VAT refund to foreign taxable persons.
4. Forms must be accompanied by: a) A document proving person’s registration (Act of the Establishment or excerpt from the court register), b) A certificate proving the foreign person's registration with the tax administration as a taxable person in its country of origin, c) The statement or other document proving intention to perform business activities in the Republic of Croatia d) Verified power of attorney for persons acting as representatives (if the taxable person will perform business activities via representative).
5. Documentation indicated above under point 4 must be in Croatian or, if not, along with the certified translation to Croatian.
6. Forms and documentation required in order to obtain VAT ID number can be submitted by a taxable person or his assignee. If the taxable person is represented by an assignee, than the submission of documentation indicated above under point 4 must be accompanied by verified power of attorney (in Croatian or certified translation to Croatian). Forms and documentation can be submitted by recommended post indicating “For VAT ID number assignment”.
7. Upon verification of submitted documentation and forms Tax administration immediately, and no later than 8 days, shall allocate VAT ID number to a taxable person.
8. A taxable person who holds a VAT ID number and ceases to perform economic
activities in the territory of the Republic of Croatia is obliged, within 8 days, to notify
the Tax administration, in order to repeal the assigned VAT ID number. Tax
administration will cancel VAT ID number ex officio if according to available data from
the Tax Administration the taxable person does not perform an economic activity for
more than 2 years, and in all other cases where there is a suspicion of abuse of VAT
ID number.
Croatian Corporate Income Tax(Profit Tax) (01.01.2014)
Copyright © 2013 The Republic of Croatia - Ministry of Finance
- Tax Administration. All rights reserved.
Croatian Value Added Tax (01.01.2014)
| TAXPAYER | 1. Any person who, independently, carries out any economic activity, whatever the purpose or results of that activity. | |||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2. Any person who, on an occasional basis, supplies a new means of transport. | ||||||||||||||||||||||||||||||||
| 3. Taxable person which is not established and has no fixed establishment rendering supplies, or permanent address or habitual residence in the Republic of Croatia and who supplies goods and perform services in the Country, for which the place of taxation is in the Republic of Croatia (unless if the Croatian recipient of goods and services pays VAT). Taxable persons established in the European Union may appoint a tax representative in the Republic of Croatia, while taxable persons established outside the European Union shall be obliged to appoint a tax representative as a person who will be liable for payment of the VAT. | ||||||||||||||||||||||||||||||||
| 4. State government bodies, state administrative bodies, bodies and units of local and regional self-government, chambers and other legal persons with public authority if they carry out economic of other activity and non-taxation of that activities would lead to significant distortions of competition. | ||||||||||||||||||||||||||||||||
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OBJECT OF TAXATION/
TAXABLE BASE |
| |||||||||||||||||||||||||||||||
| TAX RATE | 5%, 13% or 25% | |||||||||||||||||||||||||||||||
| REGULATIONS | The Value Added Tax Law (Official Gazette of RC Narodne novine No. 73/13, 148/13; Decision CCRC 99/13, 153/13) | |||||||||||||||||||||||||||||||
| Value Added Tax Ordinance (Official Gazette of RC Narodne novine No. 79/13, 85/13 - correction, 160/13, 35/14) | ||||||||||||||||||||||||||||||||
| Council Implementing Regulation (EU) No 282/2011 of 15 March 2011 laying down implementing measures for Directive 2006/112/EC on the common system of value added tax | ||||||||||||||||||||||||||||||||
| Framework Agreement between the European Commission and the Government of the Republic of Croatia concerning the participation of the Republic of Croatia in the European Community’s aid programmes (Official Gazette of RC “Narodne novine-Međunarodni ugovori” No. 8/02, 11/02) | ||||||||||||||||||||||||||||||||
| Framework agreement between the government of the Republic of Croatia and the commission of the European Communities on the rules for co-operation concerning EC financial assistance to the Republic of Croatia in the framework of the implementation of the assistance under the instrument for pre-accession assistance (IPA) (Official Gazette of RC “Narodne novine-Međunarodni ugovori” No. 10/07) | ||||||||||||||||||||||||||||||||
| Judgments of the European Court of Justice (http://curia.europa.eu/jcms/jcms/j_6/) | ||||||||||||||||||||||||||||||||
| Ordinance on the procedure for exemption from value added tax and excise duty for diplomatic and consular missions, institutions and bodies of the European Union and international organizations (Official Gazette of RC Narodne novine No. 79/13) | ||||||||||||||||||||||||||||||||
| Ordinance on exemption from value added tax and excise duty for goods imported in the personal luggage of persons travelling from third countries and for goods imported as a small consignment of non-commercial character (Official Gazette of RC Narodne novine No. 79/13) | ||||||||||||||||||||||||||||||||
Copyright © 2013 The Republic of Croatia - Ministry of Finance
- Tax Administration. All rights reserved
Croatian Value Added taxes (01.07.2013)
I. Taxpayer
| 1. Any person who, independently, carries out any economic activity, whatever the purpose or results of that activity. | ||||||||||||||||||||||||||||||||
| 2. Any person who, on an occasional basis, supplies a new means of transport. | ||||||||||||||||||||||||||||||||
| 3. Taxable person which is not established and has no fixed establishment rendering supplies, or permanent address or habitual residence in the Republic of Croatia and who supplies goods and perform services in the Country, for which the place of taxation is in the Republic of Croatia (unless if the Croatian recipient of goods and services pays VAT). Taxable persons established in the European Union may appoint a tax representative in the Republic of Croatia, while taxable persons established outside the European Union shall be obliged to appoint a tax representative as a person who will be liable for payment of the VAT. | ||||||||||||||||||||||||||||||||
|
4. State government bodies, state administrative bodies, bodies and units of local and regional self-government, chambers and other legal persons with public authority if they carry out economic of other activity and non-taxation of that activities would lead to significant distortions of competition.
II. Object of taxation and Taxable base | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||
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- III. VAT rate 5%, 10% or 25% IV. Regulations | |||||||||||||||||||||||||||||||
| | The Value Added Tax Law (Official Gazette of RC Narodne novine No. 73/13) | |||||||||||||||||||||||||||||||
| Value Added Tax Ordinance (Official Gazette of RC Narodne novine No. 79/13) | ||||||||||||||||||||||||||||||||
| Council Implementing Regulation (EU) No 282/2011 of 15 March 2011 laying down implementing measures for Directive 2006/112/EC on the common system of value added tax | ||||||||||||||||||||||||||||||||
| Framework Agreement between the European Commission and the Government of the Republic of Croatia concerning the participation of the Republic of Croatia in the European Community’s aid programmes (Official Gazette of RC “Narodne novine-Međunarodni ugovori” No. 8/02, 11/02) | ||||||||||||||||||||||||||||||||
| Framework agreement between the government of the Republic of Croatia and the commission of the European Communities on the rules for co-operation concerning EC financial assistance to the Republic of Croatia in the framework of the implementation of the assistance under the instrument for pre-accession assistance (IPA) (Official Gazette of RC “Narodne novine-Međunarodni ugovori” No. 10/07) | ||||||||||||||||||||||||||||||||
| Judgments of the European Court of Justice (http://curia.europa.eu/jcms/jcms/j_6/) | ||||||||||||||||||||||||||||||||
| Ordinance on the procedure for exemption from value added tax and excise duty for diplomatic and consular missions, institutions and bodies of the European Union and international organizations (Official Gazette of RC Narodne novine No. 79/13) | ||||||||||||||||||||||||||||||||
| Ordinance on exemption from value added tax and excise duty for goods imported in the personal luggage of persons travelling from third countries and for goods imported as a small consignment of non-commercial character (Official Gazette of RC Narodne novine No. 79/13) | ||||||||||||||||||||||||||||||||
Croatian accounting & tax news
Fiscalization (01.01.2013)
What is fiscalization?
Cash transactions fiscalization is a set of measures which are used in order to implement an overview of cash transaction revenues. Fiscal software keeps track of each receipt; Tax Administration needs to approve it (JIR) so it could be printed and given to the buyer.
How is data transmitted from the fiscal cash register to the Tax Administration?
Using an electronic – software solution:
By using special software, such as Octopus or other.
By upgrading already existing application solutions along with digital signing and online data transfer.
All communication with tax authorities is protected with public/private key encryption - X.509 v3.
The certificate will be provided by authorities (FINA).
What is the cash register certification price for the purpose of fiscalization?
300.00 HRK for 5 years (60.00 HRK per year).
Every company must buy a digital certificate (in text file form). It is favorable that it doesn't have to be purchased for each separate cash register, but only for a single company or chain store, and it can then be copied onto all cash registers.
The certificate standard is X.509 v3 and it is independent of the running platform, e.g. Windows or Linux. Demo certificates will be provided by FINA free of charge.
What is the fiscalization process for subjects to fiscalization?
Usage of POS devices equipped with internet connectivity and an appropriate software for generating and digitally signing xml transactions.
Delivery of each transaction to the Tax Administration, receiving JIR, printing the receipt and giving it to the buyer.
Delivery of daily reports to the Tax Administration.
The prescribed procedures are also used for receipt annulment, merchandise returns, food/drink container returns.
The possibility of verifying issued receipts for buyers via SMS or Web services.
What fiscalization procedures are important for subjects to fiscalization?
Getting a certificate
Certificate download instructions will be prescribed in a rule book
Adapting the cash register, i.e. the software, to fiscalization requirements
Testing the system / device function with the Tax Administration
Keep up with deadlines issued by the Republic of Croatia
What kind of hardware is required?
It is not possible to use cash registers which do not provide Internet connectivity.
Cash register
A cash register (US English) or till (British English) is a mechanical or electronic device for calculating and recording sales transactions and an attached cash drawer for storing cash. The cash register also usually prints a receipt for the customer.
Point of sale
POS (also sometimes referred to as point of purchase (POP) ) or checkout is the location where a transaction occurs. A "checkout" refers to a POS terminal or more generally to the hardware and software used for checkouts. IBM PCs and compatible models from other vendors are the most widely used computer systems in the world. They are typically single user personal computers (PC). It must have a network interface card for Internet connectivity.
Can I use an already existing FINA certificate?
No. These certificates must feature the name “Fiskal” which defines its purpose and relation to the Fiscalization Law (demo certificate).
How long is a certificate valid for?
This certificate is valid for 5 years.
What happens after 5 years?
The certificate is no longer valid and it needs to be reissued. The details regarding the reissuing procedure after 5 years will be available on time.
What is the prize competition?
Buyers will be rewarded for sending JIRs to the Tax Administration for verification. If a JIR hasn't been logged by the Tax Administration, and a buyer has the receipt with that particular JIR, then it is reasonable to assume tax evasion has occurred.
Competition rules have not been defined, i.e. how many times winners (i.e. the buyers who checked JIRs) will be chosen per year and what are the prizes.
What if communication / connection to the Tax Administration is interrupted?
The subject issues a receipt without the JIR
The receipt contains all other required elements (security code!)
A two-day deadline is allotted for subsequent transaction (issued receipt) and daily report delivery.
What is the purpose of JIR?
It confirms that the receipt has been logged by the Tax Administration
It can be used for buyers to verify receipts.
What if a malfunction occurs on the fiscal cash register?
Receipts will be issued according to the procedure for minor subjects to fiscalization (manual entry in the receipt book)
Deadline for reestablishing normal work is 2 days
Subsequently received JIRs must be written on the copies of receipts issued according to the procedure for minor subjects to fiscalization, according to Article 21 of the Fiscalization Bill.
How can issued fiscal receipts be verified?
The verification of issued fiscal receipts is done via:
The web service
SMS text messages
How can a fiscal cash register (POS) be reinstalled?
All printed documents containing payment media information (including cash, card payments, everything except bank account transfers) must have a unique, uninterrupted counter for each separate store and POS. This counter must be reset at beginning of each year.
It will be possible to verify which receipt number was the last, that was received by the Tax Administration and to continue with the actual counter after reinstalling the cash register.
Can I use the same certificate for multiple cash registers?
As this is a software certificate, there are no obstacles preventing its usage on multiple cash registers within the same taxpaying business subject.
What should be on a fiscal receipt?
OIB
Name
Date and time
Receipt number
Purchased items
Tax calculation
Tax sorting according to tax rates
Return fee amount
Operator ID
The issuer's security code
ID of the person who collected the money
Tax Administration's certificate of having received the online transaction (JIR), or, in offline mode, a special warning message
Who needs a FINA certificate?
IT companies participating in the implementation: demo application certificates
Subjects to fiscalization: production application certificates
Can the certificate be used only with Microsoft OS?
FINA certificates are in accordance with the X.509 v3 standard and the RFC 5280 recommendation which regulates usage of X.509 v3 certificates on the Internet. Application certificates which will be issued for the purpose of fiscalization are soft-form certificates and they can be used on various platforms. Certificates are in accordance with international standards and are not limited to any particular computer platform.
Who is FINA ?
The Financial Agency (FINA) is the leading Croatian company for financial mediation. National coverage, an IT system tested on the most demanding jobs of national importance and a high level of expert team professionalism make it possible to prepare and implement various projects, from simple financial transactions to the most sophisticated jobs in e-business. The only Certificate Policy authorized company in Croatia.
Who is APIS-IT?
The agency for IT system support and information technologies, APIS-IT ltd. is a company which works closely with the Republic of Croatia and the City of Zagreb. They have a long tradition and have developed very complex IT support systems for the City of Zagreb, and the Tax and Customs Administrations of the Ministry of Finance in the Republic of Croatia.
Who is HGK?
The Croatian Chamber of Economy (Hrvatska gospodarska komora, HGK) is an independent professional and business organization for all legal entities engaging in business. It was established in 1852, organized in European tradition and on the so-called continental model of Austrian and German chambers with compulsory membership
What is XML?
Extensible Markup Language (XML) is a markup language, that defines a set of rules for encoding documents in a format that is both human-readable and machine-readable. It is defined in the XML 1.0 Specification produced by the W3C and several other related specifications
What form does the certificate come in?
As a text file
What is the purpose of the security code?
Additional protection for the receipt issuer – a confirmed link between the issued receipt and the subject to fiscalization
An additional means of identification while in offline mode
It prevents buyers from forging receipts
Who can create the security code?
The POS software users can decide which algorithm to use, to generate the code.
Is a special certificate used for testing?
Yes, a demo certificate issued free of charge by FINA. The certificate is planned to be available for download during September 2012.
How will Helpdesk be organized?
FINA will provide support with procedures regarding the certificates, there will also be a special website, a special mailing group and a free hotline (to be published after the Law has passed)
The first line of support for business owners – service offered by IT service providers
APIS-IT second line of support – support for manufacturers / software developers in case of problems with connection towards the centralized system
Details about how to communicate with support are a part of the general technical instructions
What are the fiscalization deadlines?
FINA will provide support with procedures regarding the certificates, there will also be a special website, a special mailing group and a free hotline (to be published after the Law has passed)
The first line of support for business owners – service offered by IT service providers
APIS-IT second line of support – support for manufacturers / software developers in case of problems with connection towards the centralized system
Details about how to communicate with support are a part of the general technical instructions
Who will cover fiscalization costs?
All costs will be covered by the party, who wants to fiscalize their cash registers. There are no state subsidies.
The costs are:
Purchasing a cash register with IBM PC or other compatible models
Purchasing a certificate from FINA
Purchasing or modifying software according to fiscalization standards
Purchasing an Internet connection
Monthly Internet connection costs
Additional software maintenance costs (hiring a person for the IT department to carry out the work)
Who will cover the Internet connection costs?
The costs are covered by the subject to fiscalization and they can choose any ISP to sign a contract with.
Do bookkeeping specifics change?
The costs are covered by the subject to fiscalization and they can choose any ISP to sign a contract with.
Who is going to be a subject to fiscalization?
Natural persons who are obligated to pay the income tax on independent personal activities (craft trade and other equal services, free enterprises, and, under certain conditions, agriculture and forestry)
Natural persons who are obligated to pay the profit tax
Legal persons obligated to pay the profit tax (corporations and others), if they are obligated to issue receipts according to special regulations.
Persons who conduct business on a smaller scale, i.e. the natural persons whose income is determined in a flat rate according to the Income Tax Law, are considered to be minor subjects to fiscalization. These subjects will issue receipts that are pre-certified at the Tax Administration (a special receipt book marked in ordinal numbers and certified).
What is OIB?
The Personal Identification Number (OIB, Osobni identifikacijski broj) is a permanent ID number assigned to every Croatian citizen and every legal person registered in the Republic of Croatia. It is generated and assigned by the Ministry of Finance - Tax Administration.
The OIB will gradually replace all other numbers which have until now been used as ID numbers for legal and natural persons in the Republic of Croatia (MB and MBG, respectively).
The OIB is a randomly-generated 11-digit number, which contains no private information.
The OIB is generated and then assigned to the natural and legal persons at no expense to them.
http://oib.oib.hr/SaznajOibWeb/fizickaOsoba.html
Fiscal Law
http://fiscalization.hr/en/fiscal-law
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TAXPAYER |
CORPORATE INCOME TAX (01.03.2012)
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| 1. A company or another legal or natural person resident in the Republic of Croatia, who is permanently and independently engaged in an economic activity for the purpose of deriving a profit, an income or a revenue or other assessable economic benefits. | |
| 2. A resident permanent establishment (an inland business unit) of a non-resident entrepreneur. | |
| 3. A natural person who derives income pursuant to the income tax regulations, if he/she declares that he/she intends to pay profit tax instead of income tax. | |
4. An entrepreneur – a natural person who derives income from small business or the activities equalized therewith, if:
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| 5. Exceptionally, the state administration bodies, bodies of regional and local self-government, the Croatian National Bank, state institutions, institutions of units of regional and local self-government, state institutes, religious communities, political parties, trade unions, chambers, civic organizations, artists associations, volunteer fire companies, technical culture communities, tourist boards, sports clubs, sports associations and unions, open-end investment funds established and operating in accordance with the law, endowments and foundations, if they carry out an economic activity and the non-taxation of this activity would result in their obtaining of unjustified privileges on the market, are liable to pay corporate income tax for this activity. | |
| 6. Every entrepreneur that is not classified among the entrepreneurs listed in Items 1 – 5 and is not liable to pay income tax according to the provisions of the Personal Income Tax Law and the profit of whom is not taxed elsewhere. | |
| Note: Open-end investment funds established and operating in accordance with the law are not liable to pay corporate income tax (profit tax). | |
| CORPORATE INCOME TAX BY WITHHOLDING | |
| 1. An inland paying agent that pays to foreign entities-recipients (non-residents) who are not natural persons, | |
| 2. The permanent establishments of a non-resident entrepreneur, when they pay to the parent company interest, as well as royalties and other intellectual property rights (copyright, patent, licensing, trade mark, design or pattern, production procedure, production formulas, draft, plan, industrial or scientific experience and similar rights). Exceptionally, the withholding tax shall not be paid if considerations are recognized as the revenues of a resident permanent establishment of a non-resident entrepreneur. The withholding tax shall be paid for all services paid to persons having their permanent establishment or headquarters in the countries, except for the European Union Member States, in which a general or average nominal profit taxation rate is lower that 12.5% and the country is published in the list of countries issued by the finance minister. | |
| TAX BASE | CORPORATE INCOME TAX |
| Profit determined pursuant to the accounting regulations as the difference between revenues and expenditures before the profit tax assessment, increased and reduced in accordance with the provisions of The Profit Tax Law. | |
| CORPORATE INCOME TAX BY WITHHOLDING | |
| Gross amount of a consideration paid by a resident payer to a non-resident recipient. | |
| TAX RATE | CORPORATE INCOME TAX |
| 20% | |
| CORPORATE INCOME TAX BY WITHHOLDING | |
| 15% 20% for all services paid to persons having their permanent establishment or headquarters in the countries, except for the European Union Member States, in which a general or average nominal profit taxation rate is lower that 12.5% and the country is published in the list of countries issued by the finance minister. | |
| TAX REGULATIONS | Profit Tax Act (Official Gazette of RC 'Narodne novine' No. 177/04, 90/05, 57/06, 80/10). |
| The Regulations concerning profit tax (Official Gazette of RC 'Narodne novine' No. 95/05, 133/07, 156/08, 146/09 |
End of year payment of 2012
December is usually a period of rewarding payments to employees. Here is a summary of tax treatments of Christmas payments, buying gits of employees and children.
END OF YEAR PAYMENTS TO EMPLOYEES – UP TO 2.500 HRK PER YEAR
Pursuant to Income tax Law (published in official gazette, (NN 95/05, 96/06, 68/07, 146/08, 2/09,9/09-ispravak i 146/09, 123/10), in article 13. par. 2. Point 11 is regulated the possibility of payment of non taxable allowances and gifts to employees amounting to maximum of 2.500,00 HRK per year per employee (for example: Christmas allowances, holiday pay, and Easter allowance). Total adopted amount of 2500, 00 HRK could be divided into several payments during the year (for example: 1200,00 vacation payment, 1300 Christmas bonus/allowance). If the employer is rewarding employees several times during the year, and he uses the total of non-taxable amount of 2.500,00 HRK with the first payment, all otherpayments are treated as a salary. Annual allowance could be either paid in money (cash or via bank transfer to employee's current account) or as in-kind-gift.
GIFT TO CHILDREN UP TO 15 YEARS OLD – UP TO 600 HRK PER YEAR
Income tax Law (article 13, par. 2, point 10) has prescribed that the employer could pay non taxable amount up to 600,00 HRK per year as a gift to employee's children up to 15 years old i.e. children which till December 31st of current year are 15 years old. Each parent is entitled to this allowance. The gift could be payable in money or in-kind (toys, sweets etc.) for all children no matter whether they are registered on parent's tax card or is the parent their health insurance contractor (if it is not differently prescribed by Collective Agreement or by Contract of employment).
GIFT IN KIND TO EMPLOYEE - UP TO 400 HRK PER YEAR
Pursuant to the regulations of Income tax Law (article 14, par 7) the employer could give in-kind-gift to the employee amounting to the value up to 400, 00 HRK per year (gross amount including VAT).
The gift in kind amounting to the value up to 400,00HRK per year can be exempt of tax only if is given in kind.
If the in-kind-gift is more than 400,00 HRK or the gift is paid in money, it is considered as an income and should be accordingly taxable as a salary in kind (all taxes, surtax and both employer's and employee's contributions should be paid).
Deadline for registration of employment to Croatian institue for pension insurance (2012)
The deadline for registration of employee to pensiohn insurance, registration of termination of employment or change during insurance, is 8 days.
If employer does not register insurance in prescribed dedeline or if employer does it after prescribed deadline of 8 days, he-she can be fined in an amount ranging from 5000 to 50,000 kuna. The responsible person of employer-legal entity shall be fined in an amount ranging from 1000 to 10,000 kuna.
Minimum wage! (June1, 2012)
The gross amount of minimum wage from June 1, 2011 to May 30 2012 in the Republic of Croatia, is 2.814 HRK
Croatian Accounting rules
- Tax year
- The fiscal year begins on January 1-st and ends on December 31 of the same year.
- Accounting standards
- In Croatia, International Financial Reporting Standards are mandatory for big companies and for those that have their bonds on the stock exchange market. All the others can also report respecting the rules set by Croatian Committee for Financial Reporting Standards, a 9-members professional body appointed by the government.
- Accounting regulation bodies
- Croatian Committee for Financial Reporting Standards (in Croatian only)
Croatian Ministry of Finance
Croatian Tax Administration Office
Croatian Financial Services Supervision Agency
International Financial Reporting Standards - Accounting reports
- These documents must contain: a balance sheet, a profit and loss account, a cash-flow report, a review of the changes of the authorized capital, comments and annexes.
- Publication requirements
- The Croatian entrepreneurs are subjected to the obligation of information about their financial situation. The documents of financial information must be drafted in Croatian and expressed in the national currency (the Croatian kunas) usually once per calendar year. A business year can be different from the calendar year only if there is an exception or if the activity is a seasonal one. The account book and the ledger must be kept up to date and then kept during at least 11 years.