English for Tax Administration 2 Lecturer: Miljen Matijašević G10, room 6/I, Wed 11:00-12:00 e-mail: miljen.matijasevic@gmail.com Session 9

Today’s Session Revision questions and exercises Corporate Income Tax

Revision of the last session Personal Income Tax

Explain the following terms income personal allowance independent activities freelance work taxable income tax break dependents capital gains tax bracket contributions

Answer the questions Who is subject to payment of personal income tax? What is it paid on? What is the taxable base? What is the personal allowance and is it the same for everybody? What are the rates and how do they apply? What payments are made from a gross salary before a net salary is paid out? How is the amount of the local surtax calculated?

Practice Do the exercises on p. 32 in the coursebook

Corporate Income Tax Unit 9

Corporate Income Tax Paid on income by resident companies or other legal persons performing a business activity for profit also known as ‘profit tax’

Corporate Income Tax non-residents – pay corporate income tax only if they have a business unit in Croatia (the resident unit pays)

Corporate Income Tax NATURAL PERSONS engaged in business activities: may choose to pay corporate instead of personal income tax, must pay corporate income tax if they generated, in the previous tax period, a total revenue higher than HRK 3 million, or if they meet two of the following three criteria: in the previous taxation period, they generated income above HRK 400,000.00, have long-term assets in the value above HRK 2,000,000.00, in the previous taxation period they have employed more than 15 employees on average.

Corporate Income Tax if performing a business activity, and if non-taxation would lead to the acquisition of unjustified privileges on the market, the following are also taxpayers of the corporate income tax: state administration bodies, bodies of local and regional self-government, the Croatian National Bank, state institutions, state institutes, religious communities, political parties, trade unions, chambers, associations, tourist associations, sports clubs, sports associations, trust funds, etc.

Corporate Income Tax TAXABLE BASE: profit, calculated as the difference between revenue and expenditure, as regulated by the Corporate Income Tax Act taxable base determined based on the profits from the previous year, payable in the following year the difference settled at the end of the taxation period

Corporate Income Tax TAX RATE: 12% for revenue up to HRK 3 million 18% for revenue above HRK 3 million

Withholding tax porez na dobit po odbitku the purpose: to prevent tax evasion payable in the course of certain transactions with foreign persons from certain countries

Withholding tax payable in the course of payment of certain goods and services to a non-resident legal persons (interest, dividend, intellectual property rights, etc.) paying for market research services, taxation and business counselling and auditing to foreign persons paying for all kinds of services to persons from countries considered to be tax havens or financial centres (except for EU member states or states with which the RC has concluded agreements to avoid double taxation) the list is published by the minister of finance

Withholding tax taxable base for withholding corporate income tax – gross amount of the fee paid to the non-resident recipient tax rate 12% for payments of dividend and share in profit 15% for above under 1 and 2 20% for above under 3

Thank you for your attention!