1. English for Tax Administration 2
Lecturer: Miljen Matijašević
G10, room 6/I, Wed 11:00-12:00
Session 7

2. Today’s Session Revision Taxes in Croatia
Indirect Taxation – Value Added Tax

3. Taxes in Croatia
Unit 3

4. Taxes in Croatia What are the foundations of the Croatian economy?
What is the position of foreign enterpreneurs in relation to domestic?
What different types of taxes does the Croatian system include?

5. Taxes in Croatia values of the Croatian economy
free market
entrepreneurial freedom
equal rights guaranteed to both domestic and foreign investors
a system of direct an indirect taxes
agreements to avoid double taxation

6. Taxes in Croatia
Read and analyze the chart on p. 24 in your books. Do the exercises on p. 25.

7. Indirect Taxation Value Added Tax
Unit 4

8. Value Added Tax What do you know about VAT?
What is it paid on and who by?
Why is it called a ‘value added’ tax?
Do you know what it means to be ‘in the VAT system’?

9. 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

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

11. 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

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

13. 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)

14. 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

15. 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

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

17. 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 740
Deadline for the refund: 6 months from the date of invoice

18. 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)

19. Thank you for your attention!