English for Tax Administration 2 Lecturer: Miljen Matijašević G10, room 6/I, Wed 11:00-12:00 e-mail: miljen.matijasevic@gmail.com Session 7

Today’s Session Revision questions and exercises Indirect Taxation – Value Added Tax

Revision Vocabulary exercises

Translate into English porez na dodanu vrijednost (PDV) porez na dohodak porez na dobit trošarine porez na promet nekretnina porez na premije automobilskog osiguranja porez na motorna vozila porez na korištenje javnih površina porez na kuće za odmor prirez

Translate into English value added tax personal income tax corporate income tax excise taxes real property transfer tax tax on car insurance premiums motor vehicle tax public land use tax second home tax local surtax

Translate into English porez na potrošnju porez na nasljedstva i darove porez na tvrtku ili naziv porez na automate za zabavne igre porezi na dobitke od igara na sreću consumption tax inheritance and gift tax trading name tax slot-machine tax tax on gains of the games of chance

estimate – deem – ensue – detriment - sham obtain - disclose – liability – statute Tax authorities must assess taxes with equal diligence, whether it is to the benefit or the ________ of the taxpayer. A ________ transaction usually conceals an illegal transaction. An old unpaid tax debt can become subject to the ________ of limitations. If the taxpayer fails to provide necessary information and evidence, the taxable base and ultimately the tax ________ are ________. The law imposes an obligation on tax authorities not to ________ any personal information ________ in the tax procedure. This provision shall not be ________ violated if the taxpayer has consented to the publication of such information.

estimate – deem – ensue – detriment - sham obtain - disclose – liability – statute Tax authorities must assess taxes with equal diligence, whether it is to the benefit or the DETRIMENT of the taxpayer. A SHAM transaction usually conceals an illegal transaction. An old unpaid tax debt can become subject to the STATUTE of limitations. If the taxpayer fails to provide necessary information and evidence, the taxable base and ultimately the tax LIABILITY are ESTIMATED. The law imposes an obligation on tax authorities not to DISCLOSE any personal information OBTAINED in the tax procedure. This provision shall not be DEEMED violated if the taxpayer has consented to the publication of such information.

Translate into English Porezna tijela dužna su poticati porezne obveznike da predaju porezne prijave. Trgovačka društva dužna su voditi poslovne knjige i evidencije. Povrat poreza moguć je za iznose veće od 1.000 Kn. Porezni dug je otpisan budući da dužnik nema nikakve imovine. Prisilna naplata vrši se zapljenom imovine.

Translate into English Tax authorities must encourage taxpayers to file tax returns. Companies must keep books and records. A tax refund is possible for amounts exceeding HRK 1,000. The tax debt was written off as the tax debtor owns no property. Forcible collection is carried out by seizure of property.

Indirect Taxation Value Added Tax Unit 4

Value Added Tax Levied at each stage of the production and distribution process Input tax deductible from the output tax INPUT TAX – pretporez OUTPUT TAX – izlazni porez

Taxable persons Individuals Legal persons engaged in taxable activities Taxpayers whose supplies equalled more than HRK 230,000 must enter the VAT system

Taxable persons E.g. Importers and exporters of goods Entrepreneurs receiving services from a non-resident Anyone performing business activities if non-taxation of such activities would lead to unfair competition

Taxable transactions Taxable transactions include Supply of goods and services for consideration within Croatia Self-supply of goods and services Importation of goods

Taxable transactions Self-supply: use of own business services for private needs business entertainment expenses use of personal vehicles (if not deductible from personal income tax or profits for tax purposes)

Taxable transactions Taxable transactions also include: Supply of goods and services by legal entities for the benefit of the shareholders and members of immediate family for no consideration or with a personal discount Any supply free of charge or at a personal discount, irrespective of who the recipient is

Taxable Amount (base) The sales price of goods and services supplied, including costs of transportation, insurance and packaging For imports – customs value + customs duties and other charges and special taxes payable in the course of customs clearance For reimported goods (exported and processed abroad) – the consideration for the processing or increase in value of the goods

VAT Rates The standard rate: 25 % Reduced rates: 13 % and 5 %

Non-residents Non-resident entrepreneurs engaged in taxable transactions in Croatia - subject to the same taxation rules as residents Other non-residents (non-EU citizens) can claim a refund of VAT on goods purchased in excess of HRK 500 Deadline for the refund: 6 months from the date of invoice

Key vocabulary input tax output tax deductible legal entity taxable activity non-resident taxable person to be exempt from taxable transaction supply of goods or services consideration free of charge customs duty customs clearance processing (of goods)

Thank you for your attention!