Croatia: Croatia implements BEPS Action 13

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Croatia: Croatia implements BEPS Action 13

intl-updates-small.jpg
cancedda.jpg
jakovljevic.jpg

Silvia Cancedda

David Jakovljevic

Action 13 of the OECD's BEPS Project has now been fully implemented in Croatia, with the full legal framework in place.

With a total of 15 action points, the OECD's BEPS Project aims to fight profit shifting from jurisdictions with high taxes to tax havens, often as a part of an entirely legal strategy used by MNEs. BEPS Action 13 (transfer pricing documentation and country-by-country reporting) imposes country-by-country reporting (CbCR) on multinationals, requiring them to annually report certain information about their business. The CbC report is filed in every tax jurisdiction in which an MNE operates.

In Croatia, the Act on Administrative Cooperation in the Field of Taxation entered into force on January 1 2017 as a separate section of the old General Tax Act. It adopts and implements various EU Directives in the area of administrative support and automatic exchange of information between EU member states. Based on this Act, the Ordinance on Automatic Exchange of Information in the Field of Taxation was issued and entered into force on March 9 2017.

In late March 2017, the Croatian tax office also published the CbCR requirements that are applicable to constituent entities of Croatian-resident MNE groups with consolidated revenue exceeding €750 million ($793 million) as of January 1 2015.

The first automatic exchange of information for Croatia will be conducted for the fiscal year 2016, with the first notification deadline set at April 30 2017. The details of the notifications and reports required are as follows:

  • Each constituent entity of an MNE resident in Croatia must inform the Croatian tax office on whether the ultimate parent entity, a surrogate parent entity or a constituent entity (as defined in the Ordinance), has the obligation to file the CbC report on behalf of the MNE in question. The deadline submitting such a notification is four months after the fiscal year ends. Thus, for the fiscal year that ended on December 31 2016, the deadline is April 30, 2017;

  • Each constituent entity of an MNE resident in Croatia that is neither the ultimate parent entity, a surrogate parent entity or a constituent entity, has the obligation to inform the Croatian tax office of the identity and tax residency (name of the country) of the entity that will file the CbC report on behalf of the MNE in question. The deadline is the same as above; and

  • The ultimate parent entity of an MNE or its surrogate parent entity has the obligation to file to the Croatian tax office the first CbC Report for the fiscal year that started on January 1 2016 or any time after this date, within 12 months from the end of the fiscal year. Thus, for the fiscal year that ended on December 31 2016, the deadline is December 31 2017. By virtue of an exception, a constituent entity meeting the conditions set out in Article 102 of the Ordinance must file its first CbC report for the fiscal year that started on January 1 2017 or any time after this date, within 12 months from the fiscal year end.

Affected MNEs should note that the notifications discussed above are to be filed to the tax administration's central office, specifically to the Department for Normative Affairs and International Cooperation. The CbC reports due at the end of the year will be submitted electronically, with detailed instructions pending publication by the tax authorities.

Silvia Cancedda and David Jakovljevic (zagreb@eurofast.eu)

Eurofast Croatia

Tel: +385 1 7980 646

Website: www.eurofast.eu

more across site & shared bottom lb ros

More from across our site

A lack of commitment from major jurisdictions and the associated compliance burden are obstacles facing the OECD initiative
Richard Gregg is no longer fit and proper to be a tax agent, said the TPB; in other news, MHA completed its acquisition of Baker Tilly South-East Europe
Recent Indian case law emphasises the importance of economic substance over mere legal form in evaluating tax implications, say authors from Khaitan & Co
PepsiCo was represented by PwC, while the ATO was advised by MinterEllison, an Australian-headquartered law firm
Three tax experts dissect the impact of a 30% tariff that has shaken up trade relations between South Africa and the US
Awards
ITR is delighted to reveal all the shortlisted nominees for the 2025 Americas Tax Awards
As we move into an era of ‘substance over form’, determining the fundamental nature of a particular instrument is key when evaluating the tax implications of selling hybrid securities
It stands in stark contrast to a mere 1% increase in firmwide revenue since last year
It follows a court case concerning a Freedom of Information request lodged by the founder of a software company
After years of deafening silence, the UK tax authority is taking overdue action against corporates that fail to prevent the facilitation of tax evasion
Gift this article