1. English for Tax Administration 2
Lecturer: Miljen Matijašević
G10, room 6/I, Wed 11:00-12:00
Session 9

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

3. Revision of the last session
Personal Income Tax

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

5. 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?

6. Practice
Do the exercises on p. 32 in the coursebook

7. Corporate Income Tax
Unit 9

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

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

10. 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.

11. 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.

12. 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

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

14. 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

15. 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

16. 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

17. Thank you for your attention!