Croatia has implemented OECD Pillar Two rules through Ordinance No. 665, published on 22 May 2026, requiring multinational and large domestic groups to designate a reporting entity and file supplementary tax returns using standardised forms within 15 to 18 months after fiscal year-end. The ordinance establishes joint and several liability across all local entities and grants the Tax Administration enforcement powers over unpaid obligations.
Croatia has published Ordinance No. 665 in the Official Gazette on 22 May 2026, bringing the nation’s tax system into alignment with the OECD’s global minimum corporate tax initiative.
The ordinance operationalises the broader Minimum Global Corporate Income Tax Act by establishing clear procedures for large multinational enterprise (MNE) groups and domestic corporate groups operating in the country.
The ordinance designates a primary constituent entity responsible for identifying Croatian subsidiary members, managing tax filings, and bearing legal liability on behalf of the local subgroup. This structure simplifies compliance by creating a single point of contact for the Tax Administration whilst establishing joint and several liability across all local entities.
Companies must report supplementary tax positions using standardised forms (MGP–DP1 and MGP–DP2) and submit returns in accordance with international automatic exchange of information (AEOI) protocols. The rules governing qualified domestic minimum top-up tax (QDMTT) follow established accounting standards, ensuring consistency with OECD models. Organisations that fail to meet payment obligations face enforcement action from the Croatian Tax Administration.
The ordinance establishes strict submission deadlines and ensures that all domestic procedures align with international tax transparency standards and cooperative information-sharing frameworks.
Designating the reporting constituent entity
Companies must identify all Croatian constituent entities within their MNE or large domestic group, assign a name to the “Croatian Subgroup” (typically matching consolidated financial statements), and notify the Tax Administration of the entity assuming all tax rights and obligations. This designated entity remains responsible for submitting required information returns to the Croatian Tax Administration, regardless of where the primary filing occurs, ensuring the local authority receives all necessary data for compliance and oversight.
Liability and enforcement
The Rulebook establishes a system of joint and several liability for the Croatian Subgroup.
- Single debt: The total tax liability (whether qualified domestic top-up tax, income inclusion rule, or undertaxed profits rule) is treated as a single debt.
- Enforcement order: If the responsible entity fails to pay, the Tax Administration pursues enforcement first against that entity. If unsuccessful after three months, they target other constituent entities, prioritizing those with the highest revenue generated in the previous year.
Tax return forms and calculations
Tax liabilities are reported using specific forms, with all amounts reported in euros.
- Form MGP–DP1 (Qualified Domestic Top-up Tax): This form is used for the qualified domestic top-up tax and includes sections for general group information, data for calculating the tax (such as adjusted covered taxes, net qualifying income, and substance-based income exclusions), and a list of constituent entities.
- Form MGP–DP2 (Income Inclusion/Undertaxed Profits Rule): This form is used for top-up tax determined under the income inclusion rule or the undertaxed profits rule.
- Accounting standards: Calculations for the domestic top-up tax must be based on the accounting standards specified in the Act or those ensuring the application of qualified international safe harbour agreements.
Deadlines and transitional periods
The Rulebook sets specific timelines for filing and payment:
- Standard filing: Form MGP–DP1 is generally due 15 months after the end of the fiscal year, with the tax becoming due 30 days later. Form MGP–DP2 is due 30 days after the MGP–DP1 deadline.
- Transitional rules: For the “transitional year,” the deadline for Form MGP–DP1 and the notification of the responsible entity is extended to 18 months after the end of the fiscal year.
- Effective dates: The forms apply to periods beginning after 31 December 2023, with the undertaxed profits rule specifically applying to periods beginning after 31 December 2024.
