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Amendments to Profit Tax Act and Bylaw


New amendments to Profit Tax Act were introduced on 19 December 2013 and they apply to 2013 tax return (with an exception of the provisions relating to the tax reliefs, which came into force on 1 January 2014 and they apply to 2014 tax return). The amendments to Profit Tax Bylaw came into force on 31 December 2013.

Important amendments of the Act are the following:

  1. Thin capitalization rule is extended to all related party loans;
  2. List of tax recognized expenses of credit institutions is extended and (under prescribed conditions) include a write off of receivables from non-related natural persons based on granted loans for residential purposes and accrued interest, as well as a write off of receivables from non-related persons based on entrepreneurial loans and accrued interest;
  3. The value of promotional products, which are given to customers and which are not considered as entertainment cost, is increased from HRK 80 to HRK 160;
  4. Provisions on tax reliefs and exemptions for tax payers in areas under special State care are incorporated in the Act;
  5. Under certain conditions, write off of statute bared receivables from non-related natural persons up to HRK 2,000 are tax recognized;
  6. In calculation of the monthly advance payment tax reliefs for reinvested profit and State support for education should be exempt from the tax base of the previous tax period.


Portrait of Tamara Jelić Kazić
Tamara Jelić Kazić