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Recent tax developments


Tax deductible interest between related companies with the privileged status

Provisions prescribing the tax recognized interest on loans between related resident and non-resident companies (transfer pricing rules) apply also to related resident companies, if one of them has a privileged tax status, i.e. if it is subject to corporate profit tax at a rate lower than the regular rate or is exempt from payment of corporate profit tax, or is entitled to carry forward tax losses from previous tax periods. According to the position of the Tax Authorities, a taxpayer who reinvested profit has a privileged tax status.

Construction land according to the VAT Law

In the Opinion issued in February 2015 the Central Office of the Tax Authority of the Ministry of Finance, Republic of Croatia („Opinion“) took the position with respect to the definition of construction land, in the context of the recent amendments to VAT Law (exceptions from the VAT exempted supplies).

VAT Law defines construction land as land for which an executing act permitting construction works was issued – these are construction or location permit, resolution permitting construction works, certificate of the main design etc. It has been stated in the Opinion that a land with the construction permit is considered construction land subject to VAT even when the construction permit in no longer valid because the construction works did not start within the deadline defined by the construction permit.

Right to VAT option and reverse charge at supply of a real estate to a foreign taxpayer

In case of VAT exempt supply of a real estate to a foreign taxpayer, who is registered for VAT purposes in Croatia and with a right to full deduction of VAT, the supplier of the real estate may opt for VAT, whereby reverse charge will apply.

Novelties in financing the Croatian Chamber of Economy

On 11 June 2015 the Assembly of the Croatian Chamber of Economy adopted the amended decision on financing the CCE for simple limited liability companies and companies in bankruptcy or liquidation procedure. By its decision the Assembly adopted the decision of the Croatian Government from April 2015 regarding the waiver of member fees until the end of 2015 for simple limited liability companies and companies in bankruptcy or liquidation procedure.


Portrait of Tamara Jelić Kazić
Tamara Jelić Kazić