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Amendments to Corporate Income Tax Law enacted — Orbitax Tax News & Alerts

On 11 December 2013, the amendments to the Corporate Income Tax Law were published in the Official Gazette No. 148/13. The amendments will enter into force on 19 December 2013 while the provisions on regional incentives will apply from 1 January 2014. The main features are summarized below.
Receivables write-off and deductibility of expenses
Write-off of the loans granted to entrepreneurs will be recognized as a tax deductible expense by the financial institutions granting the loans, irrespective of valid evidence of failed collection of the loan through a court, under the condition that the loan compromises the continuation of the entrepreneur's business activity.
Business entertainment expenses
Expenses incurred for promotional gifts which are labelled "not for sale" and other promotional objects bearing the name of the company or merchandising and advertising objects (glasses, ashtrays, etc.) given for use in the selling area of the customer would be fully deductible if their value does not exceed HRK 160 (excluding VAT) per item.
Tax havens
A withholding tax of 20% is levied if service fees are paid to companies with a registered seat or place of effective management and supervision in a country:

- that is considered a tax haven;;
- which is a non-EU Member State; and
- with which Croatia did not conclude a tax treaty.
The list of the countries would be published by the Ministry of Finance.