PERSONNEL INCOME TAX APPLICATION

Citizens are considered natural persons who may be taxpayers of:

  • Income Tax from employment based on wage and retirement (workers and retirees), both at home and abroad
  • Income tax on other incomes (authors, artists, students, members of the Supervisory Board or Board of Directors, and merchant travelers including agents, acquirers, interpreters, translators, travel agents, consultants, court attorneys and other similar activities when income earnings are not paid as salaries, income is not determined on the basis of prescribed business books and is not insured on the basis of performance of those activities)

  • Capital Income Taxes (owners of shares, optional rights users, dividend profits and profit shares recievers), both at home and abroad, based on capital gains realized within 3 years of acquisition and disposal of financial instruments and structured products (application from 1 January 2016)
  • income from property and property rights
  • insurance income tax (life insurance recipients), both at home and abroad.

Resident in the tax sense means any person who under the laws of that country, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. But this term does not include a person who is subject to taxation in that country only with income from the source in that county or property in that county, but a tax residency for all types of income is determined (World World Income).

If a natural person is a resident of two contracting countries on the avoidance of double taxation, then its status is determined in this way:

(a) shall be deemed to be a resident of that contry in which he is resident, and if he has a permanent place of residence in both countries, he shall be deemed to be a resident of that country with which he has a narrow personal and economic relationship (center of life interests);

(b) if it can not be determined in which country has a center of life interests or if it does not have a permanent place of residence in any country, it shall be deemed to be a resident of the country in which he has his habitual residence;

(c) if a person has a habitual residence in either or both of them, it shall be deemed to be a resident of the country of which he is a national;

(d) if the person is a national of both countries or is not a national of one of them, the competent authorities of the Contracting countries shall settle the matter by agreement.

The territorial connection of a taxpayer within or with the Republic of Croatia, when it comes to foreign source income, is based on the definition of the terms of residence and residence of a taxpayer in and out of the Republic of Croatia. Article 38 of the General Tax Act proscribes that:

(1) For the purposes of this Act, a taxpayer shall be deemed to have a permanent place of residence where he owns or occupies an apartment for at least 183 days in one or two calendar years. Stay in the apartment is not obligatory.

(2) If the taxpayer in the Republic of Croatia owns or occupies more flats, the taxable domicile is determined by the place of residence of the family and for the taxpayer of the widower by the place where it is predominantly retained or by the place from which he or she is principally employed or performing activities.

(3) If a taxpayer resides in the country and abroad, it is considered to be domiciled in the country.

(4) A habitual residence within the meaning of this Act shall have the taxpayer in the place where he / she remains in circumstances whereby it can be concluded that he or she is not temporarily resident in that place or in that territory. A habitual residence within the meaning of this Act is a permanent or time-bound stay of at least 183 days in one or two calendar years. For the purpose of determining the habitual residence, short-term residence breaks that do not last more than one year are not important.

 

IN PRINCIPLE, OBLIGATORY OF CALCULATION, SUSPENSION AND PAYMENTS OF TAXES IS THE PAYER OF THE RECEIPT, BUT THERE ARE EXCEPTIONS:

  • Worker who receives salary directly from abroad
  • A worker in diplomatic or consular representation of a foreign country, in an international organization or in a representative office or organization with diplomatic immunity in the Republic of Croatia (when he is a taxpayer under the Income Tax Act)
  • A taxpayer who retires pension abroad or from abroad, and the Republic of Croatia is entitled to tax income from pension
  • A resident of the Republic of Croatia who receives income from which other income is determined directly from abroad (without the intermediary of the domestic payer)
  • The acquirer of capital income on the basis of capital gains

Capital gains tax is a type of income tax and is paid by natural persons. The obligation to pay the tax is for everyone who traded the securities in a way that during 2016 he purchased and sold the same instrument and thereby gained, i.e. if he within 3 years by acquiring and disposing of financial instruments and structured products acquired capital gains in 2016 and in the future.

Tax rate: 12% + surtax.

The tax liability is due: by 31 January of the current year for all capital gains and losses realized in the previous year.  

BASIC FORMS AND PROCEDURES IN CASE WHERE THE OBLIGATORY IS A NATURAL PERSON REQUIERED TO MAKE ON ITS OWN APPLICATION, CALCULATION AND PAYMENT OF TAX OBLIGATION:

Form RPO – Application Form to the Registry of Taxpayers for persons who have realized income from abroad.

  • enter in the register of taxpayers within the competent office of the Tax Administration within 8 days from the date of receipt according to the place of residence or habitual residence

Checking the Tax Calculation or Calculation of your annual obligation – Checking the Calculation of your taxes by first-in, first-out securities principle, which you may have received from a Fund Management Company or agency / broker. Calculation of obligations for workers, retirees and recipients of other income from abroad.

Form JOPPD – Report on receipts, income tax and surtax and contributions for compulsory insurance, completed in the prescribed manner.

Banknotes / files for the netbanking system – Payment slips with the amount, IBAN number and the required payment number to properly link the payment with your JOPPD form.

With confidence, contact us at: ponuda@sapientia.hr or call us at +385 1 619 42 00. Please let us know your problem or dilemma about the needs and services you would like to realize through the SAPIENTIA Nova team, and implement it in your organization. We will consider your case and give you feedback with our opinion or call for a meeting for further elaboration.