All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

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 & bottom lb ros

More from across our site

This week Brazil’s former President Luiz Inacio Lula da Silva came out in support of uniting Brazil’s consumption taxes into one VAT regime, while the US Senate approved a corporate minimum tax rate.
The Dutch TP decree marks a turn in the Netherlands as the country aligns its tax policies with OECD standards over claims it is a tax haven.
Gorka Echevarria talks to reporter Siqalane Taho about how inflation, e-invoicing and technology are affecting the laser printing firm in a post-COVID world.
Tax directors have called on companies to better secure their data as they generate ever-increasing amounts of information due to greater government scrutiny.
Incoming amendments to the treaty could increase costs on non-resident Indian service providers.
Experts say the proposed minimum tax does not align with the OECD’s pillar two regime and risks other countries pulling out.
The Malawian government has targeted US gemstone miner Columbia Gem House, while Amgen has successfully consolidated two separate tax disputes with the Internal Revenue Service.
ITR's latest quarterly PDF is now live, leading on the rise of tax technology.
ITR is delighted to reveal all the shortlisted firms, teams, and practitioners for the 2022 Americas Tax Awards – winners to be announced on September 22
‘Care’ is the operative word as HMRC seeks to clamp down on transfer pricing breaches next year.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree