On 30 November 2018, Croatia published a series of laws in the Official Gazette for the implementation of several tax reform measures. The laws and the main measures are summarized as follows:
The Law includes amendments to implement the interest limitation and controlled foreign company (CFC) rules of the EU Anti-Tax Avoidance Directive from 1 January 2019. The main points of the interest limitation include:
The main points of the CFC rules include:
In addition to the ATAD measures, the Law also includes a defensive measure in relation to the EU list of non-cooperative jurisdictions. The measure provides for a 20% tax on all service payments and certain other income paid to residents of listed jurisdictions, unless Croatia has an applicable tax treaty with the jurisdiction.
The amendments to the General Tax Law include measures to:
The Law enters into force on 1 January 2019
The Law includes amendments to the VAT Act to:
Aside from the reduction of the standard VAT rate, the amendments apply from 1 January 2019.
The amendments to the Contribution Act include:
The changes generally result in an overall reduction in social security contributions from 37.2% to 36.5%.
The Law enters into force on 1 January 2019.
The Law includes a reduction in the real estate transfer tax rate from 4% to 3% effective from 1 January 2019. It also includes that contracts that were concluded and became valid up to 31 December 2018 remain subject to the 4% rate.
The Law includes amendments to better align the Law on Administrative Cooperation in Tax Matters with EU Directives in relation to exchange of financial account information, as well information for the prevention of VAT fraud.
The Law generally enters into force eight days after it was published in the Official Gazette, although certain aspects will not enter into force until 1 January 2021.
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