Factsheet for measure
HR-2020-15/321
–
Updated
– measures in Croatia
Cancellation and reduction of taxes and social contributions
Oslobađanje od plaćanja i smanjivanje iznosa poreza i doprinosa
Background information
On 17 March 2020, the Government of the Republic of Croatia adopted a conclusion presenting 63 economic measures aimed at boosting job retention, but also addressing illiquidity to those whose business activity has declined due to the coronavirus epidemic. The measures can be divided into two main groups. The first set of measures are measures that are horizontal in nature and are aimed at maintaining the stability of the economy through the provision of stand-style arrangements and new liquidity. The second set of measures refers to sectoral measures that are both vertically and horizontally targeted with the aim of encouraging everyone to actively undertake activities aimed at preserving jobs, i.e. safeguarding employment. In this regard, 16 laws have been amended. Additional amendments to the General tax law have been adopted on 7 April (OG 42/2020) (
see case 288 of the COVID-19 EU PolicyWatch database
) and the new Ordinance on Amendments to the Ordinance on Implementation of the General Tax Law published on 8 April. (OG 43/2020).
Content of measure
The Government decided on 7 April 2020 that for companies with a revenue of up to HRK 7.5 million (€1 million) and have a revenue drop of more than 50%, taxes and contributions will be completely written off over the next three months. For companies that have revenue of more than HRK 7.5 million (€1 million) and have a revenue drop of more than 50-100%, taxes and social contributions will be proportionally written off over the next three months.
Therefore, if a company has a revenue drop of 75%, it will pay 25% of taxes and contributions over the next three months. The companies that generate more than HRK 7.5 million (€1 million), the 7% of big companies, will be exempt from their tax liabilities in proportion to the decrease in their revenue in April, May, and July. If their revenue has decreased by 20% to 50%, they are entitled to a deferral and interest-free payment in installments, those whose revenue has decreased by 50% to 100% will pay proportionately, and if their revenue has decreased by 75%, they will only pay 25% of their tax liabilities.
Updates
The following updates to this measure have been made after it came into effect.
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13 March 2021
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After the extension of the deadline for submission of annual financial statements for 2020, the expected harmonization of deadlines for submission of tax reports occurred. The Ordinance amending the Ordinance on the implementation of the General Tax Act (OG 26/21), which entered into force on 13 March 2021, extended the deadline for submitting the Company Income Tax Return and the accompanying forms and reports. For the tax period starting from 1 January 2020 or during the calendar year 2020, the said forms should be submitted to the Tax Administration no later than 30 June 2021. Until that date, the amount of income tax advances will not change, except at the request of the taxpayer in accordance with a special regulation on company income taxation. The extension of the deadline also applies to all other forms and reports submitted in accordance with special regulations on profit taxation and other special regulations with the Company Income Tax Return. The extension of the deadline does not apply to taxpayers for whom the selected tax period is not equal to the calendar year or for whom the obligation to file does not fall due four months after the end of the tax period.
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28 May 2020
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As a part of the special regulation on the company income tax, the deadline for filing the company income tax returns and the maturity date of the tax liability for 2019 have been changed. Thus, the deadline for filing a tax return has been extended to 30 June 2020, while the maturity date of the determined company income tax liability is 31 July 2020. The changed deadlines for submission and payment of public benefits also apply to all other forms and reports submitted in accordance with special regulations on corporate taxation and other special regulations with the company income tax return or for the same submission obligations due to the Tax Administration deadline, primarily the personal income tax. The changed deadlines do not apply to taxpayers whose liabilities do not fall due four months after the end of the tax period but eight or thirty days after the end of the tax period, and these are taxpayers who are required to file income tax returns: due to status changes (merger, acquisition, division), for the purpose of opening bankruptcy proceedings, for the purpose of terminating liquidation proceedings and for the purpose of terminating operations in accordance with special regulations (like termination of a company without liquidation proceedings). Furthermore, the Tax Administration issued an opinion and better explained the eligibilities for Instalment payment of deferred tax liabilities. Eligible are taxpayers who are unable to settle the deferred tax liability at maturity can request instalment payment without any interest. Instalment payment is approved in monthly instalments - maximum for 24 months. Deadline for filing of the request for instalment payment is five days from the liabilities due date. The request could be filed in one of the following ways: Instalment payment only related to due deferred tax liability, whereby the approval of the request excludes the possibility of applying for the instalment payment of the deferred tax liabilities which will be due in the future or Instalment payment for all deferred tax liabilities, booth due and not yet due in the moment of filing the request, whereby all not yet due liabilities become due and instalment payment is approved, instead of further deferral. The Tax Administration can make subsequent assessment of the facts provided in the request related to the approval of this measure. If it subsequently determines that conditions for the approval of the measure were not adequate, abolishment of the measure will be declared, whereby tax liabilities become due in line with the specific regulations.
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Use of measure
Not yet known at this stage.
Target groups
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Workers
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Businesses
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Citizens
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Does not apply to workers
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Applies to all businesses
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Does not apply to citizens
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Actors and funding
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Actors
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Funding
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National government
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No special funding required
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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No involvement
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No involvement
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Form
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Not applicable
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Not applicable
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Social partners' role in the
implementation, monitoring and assessment phase:
-
No involvement
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Main level of involvement: Unknown
Involvement
Due to the nature of the measure social partners were not involved.
Views and reactions
Due to the nature of the measure, social partners were not involved. However, social partners are fully aware of all problems related to COVID-19 and fully support any measure that contributes to lessening the adverse effects of the crisis.
Sources
