What You Need To Know About Croatia’s Corporate Tax Amendments

By Author: martin well
Total Articles: 364
Comment this article

There have been certain amendments made to the Corporate Income Tax Law in Croatia. Croatia’s parliament passed the necessary amendments and these are expected to come into effect from March 1, 2012. These amendments bring the tax laws in line with the Parent-Subsidiary Directive.

Withholding Tax on Dividends and Profit Participation

A withholding tax of 12 percent will be levied on dividends and participation in profits paid by Croatia based companies to non-resident companies. The new amendments are pertinent to dividends and participation in profits paid after March 1, 2012, with the exception of distributions of profits earned before December 31, 2000.
After Croatia becomes a member of the European Union from July 1, 2013, dividends and participation in profits paid to non-resident companies (who fall under the common regime applicable to parent companies and subsidiaries of different EU Member States) will be exempted if:
• the recipient has a shareholding of 10% or more in the company paying the dividends or participation in profits;
• the recipient has owned the aforesaid minimum ...
... of share capital of 10% or more for 24 months continuously.
•
The Income Tax Base in Croatia

From January 1, 2013, the tax base could be reduced by the realized profits used to increase the nominal capital. It will be essential for tax payers to prove to tax regulators the actual increase of the nominal capital, within 6 months from the date the corporate income tax return needs to be filed. And from 2012, the provision will be applicable for corporate profit tax returns.

Simplify Tax Matters

In any international expansion, it is very risky to assume that all elements of your local market will be replicated in an overseas environment. While there is significant information available on the Internet and via official sources, it may be worthwhile seeking professional advice which could help you avoid significant problems and potential costs in the future. Partnering with an expert can be a wise move as they are abreast with all the complexities of taxation. While
doing business overseas , corporate tax returns and financial statements need to be prepared on different computational bases. This can pose a challenge to companies operating overseas since the criteria for corporate tax compliance vary from country to country. Companies also need accurate international corporate tax provisioning accruals to be made, which can be done with ease with a help of a business partner, who can also provide assistance in other areas of business like regulatory filings,
international accounting, HR etc,

Know more on:
International financial reporting,
EU VAT rules