1. English for Tax Administration 2
Lecturer: Miljen Matijašević
G10, room 6/I, Wed 11:00-12:00
Session 8

2. Today’s Session
Revision questions and exercises
Personal Income Tax

3. Revision of the last session
Value Added Tax

4. Explain the following terms
input tax
output tax
deductible
legal entity
taxable activity
non-resident
customs clearance
consideration

5. Answer the questions Who is subject to payment of VAT?
What is the criterion for entering the VAT system?
What do you know about the input and output taxes?
What are the taxable transactions?
What is the taxable base?
What are the rates?
What rules apply to non-residents?

6. Revision
Do the exercises on p. 15

7. Personal income Tax
Unit 5

8. Personal Income Tax
Paid on worldwide income in case of tax residency in Croatia
Paid by resident and non-resident natural persons

9. Resident / non-resident
Registered residence in Croatia
If he/she intends to stay more than 183 days over a period of two years in Croatia
NON-RESIDENT
Taxed on income earned in Croatia

10. Taxable base – sources of income
Income earned by:
employment (salary)
self-employment
freelance work, crafts, agriculture, forestry
property and property rights
renting real estate, intellectual property rights
capital
insurance
other income
management board fees, income earned by sportsmen, referees, translators, tourist workers, etc.
interest on savings in hard currency and HRK
dividends on shares

11. Taxable base Total income minus personal allowances
Non-taxable income HRK 45,600 per year
monthly allowance HRK 3,800
Dependents and children
Disabled members of the family
Etc.

12. Areas of Special Interest
Residents of those areas have special tax breaks
Higher personal allowances
Income tax exemption of earnings from agriculture and forestry
Etc.

13. Tax Rates Income tax brackets: Tax base
(annual income total minus deductions)
Tax rate
HRK 0 – HRK
24 %
HRK –
36 %

14. Local surtax
Charged in certain municipalities on the total amount of calculated tax
E.g. Zagreb - 18 %

15. Non-taxable Benefits
Employers may give employees benefits not subject to taxation
If these exceed the prescribed limit, the excess is fully taxable (contributions, income tax, surtax)
non-taxable bonuses: up to HRK per annum
Contributions – to health and pension insurance (obligatory and optional)

16. Benefits in Kind Subject to income tax
Valued at the market value, including VAT
Use of business buildings, cottages, dwellings and means of transportation provided by the employer,
Low interest on loans granted by the employer (taxable base – the difference between a rate of 4 % and the rate applied)
Gifts and entertainment provided by the employer, and
Shares received from the employer.

17. Key vocabulary
freelance work crafts hard currency personal allowance depreciation tax brackets contributions

18. Practice
Do the exercises on p in your coursebook

19. Thank you for your attention!