Background information

In late November 2019 the Croatian Parliament passed a series of laws amending Croatian tax legislation. The new laws, in the most part, came into effect on 1 January 2020. Due to corona virus pandemic The General Tax Act has been amended (OG 32/2020) introducing an article related to "Payment of taxes in special circumstances as follows: Article 107a

1. "Special circumstances" means an event or a condition which could not be predicted and could not be affected, which endangers the life and health of citizens, property of greater value, significantly damages the environment, disrupts economic activity or causes significant economic damage.
2. If the special circumstances referred to in paragraph 1 of this Article affect the ability to settle tax liabilities, the maturity of tax liabilities incurred and / or due in accordance with special regulations may be deferred and / or their installment repayment may be authorized.
3. No interest shall be accrued for the duration of the deferred payment and installment payments referred to in paragraph 2 of this Article.

The conditions, criteria and procedures for using this legal option are stipulated by Ordinance amending the Ordinance on the implementation of the General Tax Law (OG 35/2020) which entered into force on 23 March 2020.

Content of measure

Entrepreneurs affected by the coronavirus epidemic can file a tax deferral claim, provided that:

1. he or she does not have outstanding tax liabilities recorded in the Tax Administration higher than HRK 200 and

2. he or she fulfills one of the following conditions:

3. has recorded a decrease in income/receipts in the month preceding the month of the Request submission by at least 20% compared to the same month of the previous year, or

4. if he/she can prove that his/her income/receipts will likely decrease by at least 20% over the same period of the previous year, starting with the month of the submission of the Request.

Exceptionally, a tax deferral claim can also be submitted by entrepreneurs who, in 2019, have not achieved the value of supplies of goods and services in excess of HRK 7,500,000,000 (€1 million) in the previous year, and which determines the tax base according to deliveries made and in accordance with a special regulation on value added tax. See case 289 of the COVID-19 EU PolicyWatch database .

Deferred (delayed) tax liabilities relate to personal income tax and social contributions, contributions for compulsory insurance of self-employment, social contributions for persons on professional training without commencing employment, contributions and taxes on additional income (drugi dohodak), advance payment of personal income tax liabilities, advance payment of personal income tax liabilities from self-employment, advance payment on company and other tax liabilities due upon filing the Request, other than customs duties and excise duties.

Use of measure

Not yet known at this stage.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government	No special funding required

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	No involvement	No involvement
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Unknown

Involvement

Due to the nature of the measure social partners were not involved.

Views and reactions

As mentioned, due to the nature of the measure social partners were not involved. However, social partners always support measures that help the citizens and workers, like this measure for deferral payment of taxes and social contributions.

Sources

• 19 March 2020: Hrvatski sabor (Parliament of the Republic of Croatia) (2020) Zakon o do puni Općeg poreznog zakona -– OG 32/20 (narodne-novine.nn.hr)
• 19 March 2020: Hrvatski sabor (Parliament of the Republic of Croatia) (2020) Pravilnik o dopunama Pravilnika o provedbi Općeg poreznog zakona -– OG 35/20 (narodne-novine.nn.hr)
• 16 September 2020: Najčešće postavljana pitanja zbog izvanrednog stanja izazvanog širenjem virusa COVID-19 (www.porezna-uprava.hr)
• 03 March 2021: Pravilnik o dopunama pravilnika Općeg poreznog zakona (Ordinance on the implementation of the General Tax Act - OG 26/21) (narodne-novine.nn.hr)
• 07 April 2021: Zahtjev za pocek otplate neplacenih reprogramiranih obveza (The request for delay of repayment of unpaid reprogrammed tax liabilities) (www.porezna-uprava.hr)