CROATIAN LAW CLIENT ALERT 2012 February TAX REFORM IN CROATIA The newly elected Croatian Government recently proposed certain tax reforms that are expected to come into effect in March 2012. An overview of the most important of those changes: Changes in taxation of personal income and state mandatory health insurance con-tributions Personal Income Tax Act and Contributions Act The personal allowance will be increased from HRK 1,800 to 2,200 (and from HRK 3,200 to 3,400 for retired persons). The tax rate schedule will also change: the 12% rate applies to income up to HRK 2,200; the 25% rate applies to income between HRK 2,200 and HRK 8,800; and the 40% rate applies to income exceeding HRK 8,800. In addition to these changes, health insurance contributions will be decreased by 2 percentage points, and will now amount to 13% of a person’s salary. Croatian tax payers who receive pensions from abroad will be taxed the same as pensioners with locally paid pensions, except that recipients of foreign pensions will have to submit monthly reports to tax authorities. That part of a foreigner’s income exempt from taxation pursuant to a double tax treaty will be included in the base for payment of Croatian social security contributions, unless otherwise provided in a treaty between Croatia and the foreigner’s country. Moreover, there will be no monthly caps on the amount of such contributions for foreigners transferred to work in Croatia. The proposed tax reform contemplates the possibility of the Government making changes in the payment mechanism for social contributions in order to cause companies to make con-tributions on a timely basis. Taxation of dividends introduced, reinvested profit not taxable – Corporate Income Tax Act Under current Croatian law, all profits are taxed in Croatia, irrespective of whether they were paid out to shareholders or reinvested. Under the proposed reform, if profit is reinvested into the company’s share capital in the first 6 months of the following fiscal year, the reinvested amount will be exempt from corporate income tax (that rate is still 20%). Profit distributed to shareholders is currently subject to corporate income tax. Under the proposed reform, dividends will now also be taxable income to the recipients of the dividends. It should be noted that dividends amounting to HRK 12,000 annually will generally exempt from taxation if paid to local private individuals. This change will affect dividends paid after 1 March 2012, irrespective of the time when the underlying profit was accrued. Therefore, companies having profits in Croatia should consider paying it out to shareholders by the end of February 2012. Dividends paid to a foreign entity after 1 March 2012 will subject a Croatian company to a 12% withholding tax. Double taxation treaties may, in certain cases, exempt a company from the withholding requirement. The same 12% tax rate is applicable to dividends paid to either Croatian companies or private individuals. All those having income arising from shares in Croatia will now have to report all such income to the tax authorities. Value adjustments arising from claims against customers is now recognised as an expenditure provided that (i) no more than 60 days (previously 120 days) have elapsed between the maturity of ALBANIA AUSTRIA BOSNIA & HERZEGOVINA BULGARIA CROATIA CZECH REPUBLIC HUNGARY ROMANIA SERBIA SLOVAK REPUBLIC SLOVENIA UKRAINE CLIENT ALERT Croatian Law the claim and the end of the tax period, and (ii) the claims were not paid up to 15 days before filing the tax return. This change is in line with the newly introduced law limiting dates for payment of amounts due. Increase of VAT rate – VAT Tax The bill proposes an increase of the general VAT rate from 23% to 25%, and the introduction of lower rates for certain types of foods (for example, oils, baby foods, and public drinking water). Companies that are not in the transportation business will no longer be able to claim VAT for company cars, boats and other vehicles they buy. Effective 2013 the tax rate for hospitality services will be 10%. In 2013 the threshold for entering into the VAT system will be raised from HRK 85,000 to HRK 230,000 (this is in line with Croatia’s EU accession treaty). Furthermore, tax payers with an annual income under HRK 800,000 (previously HRK 300,000) will be subject to submitting their reports quarterly, while others will submit their VAT reports monthly. POREZNA REFORMA U HRVATSKOJ Nova hrvatska Vlada predložila je manju poreznu reformu. Ovdje razlažemo neke najvažnije promjene koje bi mogle stupiti na snagu već u ožujku 2012. godine. Promjene u oporezivanju dohotka i smanjenje doprinosa za zdravstveno osiguranje – Zakon o porezu na dohodak i Zakon o doprinosima Osobni odbitak se povećava s 1.800 na 2.200 kuna (za umirovljenike se osobni odbitak po-većava s 3.200 na 3.400 kuna). Porezna stopa od 12% primjenjuje se na dohodak do 2.200 kuna, porezna stopa od 25% na dohodak između 2.200 i 8.800 kuna, a najviša stopa od 40% primjenjuje se na dohodak koji prelazi iznos od 8.800 kuna. Nadalje, stopa doprinosa za zdravstveno osiguranje se smanjuje za dva postotna boda, s 15% na 13%. Hrvatski porezni obveznici koji primaju mirovinu iz inozemstva plaćat će porez na te iznose jednako kao i umirovljenici koji primaju hrvatske mirovine, osim što će morati sami podnositi i uplaćivati iznos poreza na dohodak. Iznos koji je prema nekom od međunarodnog ugovora o izbjegavanju dvostrukog oporezivanja bio izuzet od oporezivanja u Hrvatskoj, ulazi u osnovicu za izračun doprinosa, osim ako ugovor o socijalnom osiguranju između dvije zemlje ne određuje drukčije. Nadalje, za radnike koji su izaslani na rad u Hrvatsku neće se moći primijeniti ograničenje u uplati doprinosa kao što je to slučaj kod uplate doprinosa za hrvatske radnike. Predložene izmjene predviđaju donošenje uredbe kojom bi se revidirao sustav uplate doprinosa i uveo red u plaćanje doprinosa. Oporezivanje dividendi i udjela u dobiti, reinvestirana dobit se neće oporezivati – Zakon o porezu na dobit Do sada je dobit ostvarena u Hrvatskoj bila oporezivana bez obzira na to bila ona isplaćena dioničarima/udjelničarima ili reinvestirana. Prema predloženoj izmjeni zakona, dobit koja bi bila pretvorena u temeljni kapital društva u roku od 6 mjeseci od početka sljedeće porezne godine, neće se oporezivati. Stopa poreza na dobit u Hrvatskoj je i dalje 20%. ALBANIA AUSTRIA BOSNIA & HERZEGOVINA BULGARIA CROATIA CZECH REPUBLIC HUNGARY ROMANIA SERBIA SLOVAK REPUBLIC SLOVENIA UKRAINE CLIENT ALERT Croatian Law U slučaju isplate udjela u dobiti/dividendi nakon 1. ožujka 2012. godine, plaća se porez na dobit, a od sad i porez po odbitku na tako isplaćene dividende/udjele u dobiti po stopi od 12%. Ovo će se odnositi na sve isplate nakon 1. ožujka 2012. godine, bez obzira na to kada je dobit uistinu akumulirana. Stoga je na obveznicima koji imaju na raspolaganju dobit za isplatu da to i naprave do kraja veljače 2012. godine. U slučaju da je dividenda/udjel u dobiti plaćen stranoj pravnoj osobi nakon 1. ožujka 2012. godine, isti će biti oporezovan porezom po odbitku od 12%. U slučaju postojanja ugovora o izbjegavanju dvostrukog oporezivanja, ni ta isplata neće biti oporeziva. Ista ova stopa od 12% primjenjuje se na isplate dobiti/dividendi ako su im primatelji hrvatski rezidenti, te će sami morati podnijeti prijavu tako primljenog iznosa i izvršiti uplatu. Vrijednosna usklađenja po osnovi ispravka vrijednosti potraživanja od kupaca za isporučena dobra i obavljene usluge, priznaju se kao rashod (i) ako je od dospijeća potraživanja do kraja poreznog razdoblja proteklo više od 60 dana, a ne kao do sada 120 dana, (ii) te ako ista nisu naplaćena do petnaestog dana prije dana podnošenja porezne prijave. Ova je izmjena u skladu s odredbama Zakona o rokovima ispunjenja novčanih obveza (NN 125/2011). Povećanje stope PDV-a – Zakon o porezu na dodanu vrijednost Prijedlog ide za povećanjem opće stope PDV-a s 23% na 25%, te uvođenje nižih stopa za neke vrste hrane (na primjer ulja i masti, dječja hrana, voda ali ne i voda u bocama). Obveznici više neće moći tražiti povrat plaćenog PDV-a kod kupnje automobila, brodova ili drugih vozila, osim ako se ne bave prijevozništvom tim vozilima kao profesionalnom djelatnosti. Od 2013. godine uvest će se dodatna stopa od 10% za ugostiteljske usluge. U 2013. godini povećat će se i limit za ulazak u sustav PDV-a s 85.000 kuna na 230.000 kuna (što je u skladu s obvezama koje je Hrvatska preuzela Pristupnim ugovorom s EU). Nadalje, porezni obveznici koji će tada imati prihod manji od 800.000 kuna (a ne više 300.000), podnosit će kvartalne obračune PDV-a (a ostali će podnositi mjesečne obračune). This memorandum has been prepared solely for the purpose of general information and is not a substitute for legal advice. 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