Taxation Advisory Services
Our Tax Advisory Services relate to the following:
- Value-added tax (VAT)
- Corporate Profit Tax (CPT)
- Personal Income Tax (PIT) and Expatriate services (IES)
- Preventive tax review aiming to determine tax risks
- Preparation of tax appeals and complaints
- Tax planning
Value-added tax (VAT)
Value-added tax is one of the basic taxes implying questions such as the following: determining the tax base, place of taxation, or am I obligated to pay VAT or not?
In the Republic of Croatia, VAT obligation is defined and prescribed by The Value Added Tax Law and Value Added Tax Rulebook, along with a large number of opinions issued by the Tax Administration.
VAT key issues are as follows:
- What is the subject of taxation?
- What is the tax base?
- Where is the place of taxation?
- Whether the transaction should be taxed as a service or delivery of goods?
- Whether you can deduct input VAT?
- Which are the special taxation procedures?
Value added tax system is becoming ever more complex. Over a long period of time, our experts are monitoring the development of the Value added tax system, so you can contact us with certainty and confidence.
Corporate Profit Tax (CPT)
You are wondering how to legally pay less of Corporate Profit Tax (CPT)?
Corporate Profit Tax is a direct tax imposed on legal persons and physical persons registered for CPT system.
Legal stipulations of Corporate Profit Tax clearly define how it is possible to pay less tax, but entrepreneurs often do not have the time or strength to deal with these issues.
If you need help for preparation of Corporate Profit Tax return, or have any questions about the tax treatment of certain costs or income, please feel free to contact us.
Transfer prices define related inter-company pricing arrangements, and can include prices of goods, services, intellectual property and other fees charged between related parties, as well as agreements between multinational companies on participating in mutual market shared costs, such as R&D costs or inter-company financing costs.
In accordance with both international and Croatian Tax Regulations, the Croatian entity and its foreign-related party or domestic-related party must establish and document the transfer pricing system, setting out the terms under which the business is carried out between related parties.
For that purpose, Transfer pricing study must be prepared for subject companies, stating arguments and proving market conditions under which transfer prices were set and services charged accordingly.
Our services include:
- Support of Certified Tax Advisor in the preparation of masterfile document on transfer pricing for a group of companies,
- Support of Certified Tax Advisor in the preparation of studies on transfer pricing,
- Separate preparation of economic analyses that are used to determine whether the prices charged between related parties are within market margins (according with the "arm's length" principle).
Personal Income Tax (PIT) and Expatriate services
Although sometimes considered as a very simple tax, in reality it is one of the most complex taxes, especially if you generate few different types of income or income from abroad.
Please contact us if you need assistance in preparing of Personal Income Tax forms for tax returns, the interpretation of the status of your residence or assistance in preparing of tax objections and appeals.
Preventive tax review
Our preventive tax review covers the following issues:
- Do you have a trustworthy documentation?
- Whether you have calculated Personal Income Tax on all income paid to your employees?
- Are you properly applying VAT Regulations?
- Did you properly fill the Corporate Profit Tax form (or a draft)?
- Whether you have potential tax savings you are unaware of?
- Whether you have potential tax risks which you are unaware of?
Contact us and experience stress-free Tax Administration's inspection and checks.
Tax planning and tax optimization understands identification of the ideal tax structure to minimize the tax levies on your Company. Especially, it is applicable to international structures, where the following questions arise:
- What is the CPT rate in each country?
- What are the limitations of dividend payments and share in profit?
- Whether withholding tax is calculated on payment of dividends and share in profit?
- Regulations on transfer pricing?
- What are the investments incentives?
Preparation of tax appeals and complaints
The inspection performed by the Tax Administration represents a "nightmare" for most of taxpayers. The causes are both taxpayers' unorganized records or irregular business operation, whereas on the other hand the Tax Administration also contributes to this situation. Tax Administration's inspection is general administrative proceeding, performed in a few phases, as described below.
During almost every Tax Administration inspection certain irregularities are detected and interpreted (legal framework). With regards to that fact, Tax Administration issues formal Minutes on Inspection stating facts established and consequences such as additional tax liabilities, interest in arrears and possible penalties. The taxpayer has the right to submit a complaint, which must be drafted in prescribed form and properly documented.
After the taxpayer's complaint is reviewed by the Tax Administration, the Tax Administration should issue the Tax Resolution (resolution of first degree), delivered to the taxpayer, in modified or unmodified form (compared to Minutes on Inspection). The taxpayer has the right to appeal, also in prescribed form and try to deny misstatements from the Tax Resolution.
After rejection of the appeal, the only thing left are the administrative proceedings against the state before the Administrative Court.
If you find yourself in any of the stages named above, or alternatively you want to prepare for the same preventive tax review, please contact us with confidence.
Financial advisory services
Due Diligence is the process of investigation of a business, usually prior to signing a sales contract.
Very often, financial statements do not present the real picture of a company’s business, whether it is about hidden reserves increasing the value of the company itself, a non-existing property or a property with falsely stated value in financial statements.
Our experts have conducted a great number of Due Diligence for companies from different industries.
Due diligence services include the following:
- Review of Financial Statements and accounting records of target company;
- The search for key factors that influence purchase decisions;
- Support and advisory upon purchase negotiation.
Understanding how much your property or company is worth can be regarded as an asset by itself. Namely, the evaluation of your company is really important in the time of sale or purchase.
Our goal is to answer the question - how much the company (or assets) you are planning to sell/purchase is worth? Our evaluation is made in compliance with rules of professional conduct.
Considering we are Croatian Certified Evaluators, our evaluations are recognized by official courts of the Republic of Croatia.
Although entrepreneurs usually think of investment studies in the terms of bank loan approval, it is essential to understand that an investment study should primarily serve you as the investor. If a bank grants you a loan based upon a merely cosmetic investment study with blown up figures presented, you are likely to end up with a rather unrealistic project.
For that reason, it is advisable to hire an experienced professional and expert on investment studies who won't flatter your ego or blow up figures on your income, but critically review the stability of your business plan and provide you with valuable advice. In case you need an investment study, please feel free to contact us anytime.