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The Croatian Parliament passed on 27 February 2015 an amendatory act changing the Croatian General Tax Act.

The new Act brings the following innovations and changes:

1. Binding Rulings of the Tax Authorities: For the first time the tax authorities can (but need not) issue binding rulings on request of the tax payer about future business transactions. The cost of issuing the binding ruling must be borne by the tax payer. The amount to be paid is not yet determined. The Minister of Finance is expected to issue a bylaw defining the amount and other details of the procedure (e.g. deadlines).

2. Corrections of Tax Returns:

a) Prolonged deadlines: Tax returns can now be corrected without penalties after the deadline for regular correction expired, if the tax authorities request so. Therefore, tax returns can now be corrected in the course of current tax audits before the protocol of the tax audit has been made.

b) Shortened deadlines: The deadline for correcting tax returns because of findings of a tax audit or court decisions is shortened to 15 days, for the taxpayer only. For the tax authorities there is still no corresponding obligation to book, e.g. court decisions in favour of the tax-payer.

3. Tax Settlement: The legal institute of a settlement is new to the Croatian General Tax Act. Subject of a tax settlement between tax-payer and tax authorities can be:

a) an estimated tax base: If the tax authorities must estimate the tax base, this estimation can be subject of an Tax Settlement,
b) reduction of penalty interest,
c) deadlines for the payment of taxes
d) Not initiating misdemeanour offence procedures: The tax authorities can agree with the tax-payer not to initiate a misdemeanour offence procedure against the tax-payer. Thus, the tax authorities abstain from an additional punishment of the tax-payer and individuals.

4. Public-law contract: Public-law contracts regarding the full or partial payment of tax liabilities are no longer the responsibility of the Minister of Finance, but are now the responsibility of the head of the responsible tax office. Therefore, the conclusion of such contracts should become easier. The tax-payer needs to formally request the conclusion of a public-law contract in writing. The public-law contract can last no longer than 24 month and interrupts the prescription period.

5. Garnishment becomes easier for the tax authorities: The administrative procedure of garnishment of financial recourses by the tax authorities in order to compound tax liabilities of not more than HRK 5.000 is simplified in favour of the tax authorities. A formal decision of the tax authorities notifying the tax-payer in advance is not any longer needed.