News from the Republic of Croatia
Act on amendments to the Value Added Tax Act
On April 1, 2023, the Act on amendments to the Value Added Tax Act has entered in force, extending the application of a reduced VAT rate of 5% on natural gas supplies (including fees related to that supply), heating supplies from thermal stations (also including fees related to that supply) and firewood, pellets, briquettes, as well as wood chips supplies until March 31, 2024.
Notification for payment service providers
On March 15, 2023, the Tax Authority published a Notification which states that Croatia, as a member of the EU, is obliged to adopt the provisions of the Council Directive (EU) 2020/284 of February 18, 2020 on the amendment of Directive 2006/112/EC until December 31, 2023 regarding the introduction of certain requirements for payment service providers, in order to enable the Member States to successfully execute controls over cross-border supplies and suppression of VAT frauds.
With regards to that, amendments to the Value Added Tax Act are expected to enter into force next year, which will prescribe provisions regarding obligation for payment service providers to keep sufficiently detailed records of performed payment services linked with cross-border payments.
Updated EU list of non-cooperative jurisdictions for tax purposes
According to the Council's conclusion on the revised EU list of non-cooperative jurisdictions for tax purposes (published in the Official Journal of the European Union), the Russian Federation, the British Virgin Islands, Costa Rica and the Marshall Islands are included in the EU list of non-cooperative jurisdictions for tax purposes. The reasons for including the Russian Federation in the mentioned list are insufficient cooperation and disabled exchange of necessary data with the Russian Tax Authorities.
With regards to this, it should be noted that DAC6 (Directive 2018/822/EU) includes, among others, the supply of data of cross-border arrangements that contain at least one hallmark that indicates the risk of tax evasion, which includes payments towards countries listed on the EU list of non-cooperative jurisdictions for tax purposes.
ePorezna – new service Extra Profit Tax Form
On March 28, 2023, the Tax Authority issued a Notification on the new service available on the ePorezna system, related to enabled submission of the Extra Profit Tax Form for year 2022. According to the Extra Profit Tax Act, the mentioned form should be submitted by all Corporate Income Tax payers and Tonnage Tax payers who, in the tax period of 2022, had a total income of more than HRK 300 million / EUR 39,8 million, as well as those liable for payment of the solidarity contributions.