With effects from January 1, 2018, some tax law amendments have occurred in Croatia. These amendments contain tax laws, excise duties, reliefs etc..
The Minister of Finance issued the Ordinance on Amendments to the Ordinance on Profit Tax, which enters into force on January 13, 2018. The new amendments to this Ordinance can changes to the Income Tax Reporting – PD-NN Form, amendments to the Profit Tax Loss Report on Lump-sums-PD-PO Form, content is supplemented related Business Transaction Reports – PD-IPO Form and payout advance payment.
For company car expenses, the deductible tax amount of is reduced from 70% to 50%.
The arm’s length interest rate is 4.55% per annum in case of loans between related parties, which effects from January 1, 2018. This is applicable for corporate profit tax purposes.
The basic personal allowance can be increased for children and subsidized members. The new provision, which entered into force on January 1, 2018, prescribes that a child is considered a child that parents, adolescents, foster parents and guardians maintain. Method of determining tax deductible expense has changed. In this way, the tax base has increased by 50% of the expenses, , except for insurance and interest expenses, incurred in relation with own or leased motor vehicles and other means of personal transportation (personal car, boat, helicopter, aircraft etc.).
According to the new amendments in Value Added Tax (VAT), new threshold amount of HRK 300,000.00 is applied for VAT registration. A 50% deduction is granted for the purchase or rental of personal cars and other personal transport equipment whose value not more than HRK 400,000.00, including the purchase of all goods and services in respect of such goods. As of January 1, 2018, no obligation to calculate VAT for paid or received advance payments related to the delivery of goods to a domestic recipient by a foreign taxpayer without a head office in the Republic of Croatia or in connection with the supply of goods that a domestic taxpayer makes to a foreign taxpayer without headquarters in Croatia.
The Law on amendments to the Motor Vehicle Excise Tax Act entered into force on 1 January 2018.