Računovodstvo, revizija i financije 7/2019

The substantial amendments to the Companies' Act (Official Gazette no. 40/19) comprise the establishment of a limited liability company. One of the possibilities is the fact that such a company may be established with at least one fourth of the share capital in cash, whereby only one fourth of such an amount should be paid upon establishment and the rest within a year. The article presents the process of establishing a limited liability company.

The author of the article presents the accounting for short-term liabilities i.e. the liabilities which are due less than 12 months after the date of the balance sheet. The article states the examples of the accounting for short-term liabilities to enterprises within the group, the liabilities to enterprises with participating interests and the liabilities to enterprises with no participating interests.   

The insurance premium paid by enterprises refers mostly to insurance of the property. However, there are common cases of payment of premiums for employees, which represents the salary in kind.

The article presents the recording of the costs of insurance premium and the tax position of the premiums when the insured persons are a company’s employees. 

Electric and hybrid vehicles are commonly used in the Republic of Croatia. Accordingly, there are more investments in the quality infrastructure which enables the use of such vehicles. Hybrid electric plug in vehicles are more suitable for this area due to the fact that they comprise the best characteristics of both types of vehicles (conventional with internal combustion and electric vehicles). The subsidies granted by the State certainly contribute to the increased interest in such environmentally friendly vehicles. The problem which may be encountered by the enterprises which have received the subsidies for purchase of electric and hybrid vehicles is the fact that if they find themselves in financial difficulties within the period of duration of the contract or do not fulfil the conditions which were required for the receipt of the subsidies, they are obliged to pay back the received assets.  

The article deals with the issues regarding the accounting services, their prices and the conditions under which such services are provided. The stated facts may be used as an orientation for the application in practice. The article presents a sample of the contract on provision of accounting services, its essential parts and determination and diversification of the responsibilities of the management and the accounting office. The article may be interesting to accountants, owners of accounting offices, consultants and the present and future users of accounting services.

The Amendments to the Companies’ Act have introduced certain new issues regarding the status right of companies i.e. a company’s cessation without the procedure of liquidation. The speeded up procedures of establishment and liquidation of companies are rather acceptable, but they are not included in the amendments to the accounting regulations neither the regulations on income tax.

The complete application of the specific legal framework which under certain circumstances determines the use of an e-invoice begins as of 1 July 2019.The obligatory use of such an invoice should be taken into consideration if one of the sales contract parties is obliged to apply the legal regulations within the system of public procurement.

This column provides the answers to the frequently asked questions regarding accounting and taxation issues in business practice. The questions refer to the loan received by a physical person – a company member, with a foreign currency clause, accounting for the sales of a business building, the tax position of the sales of real estate through public auction in a bankruptcy procedure, the VAT calculation on mediation services and obligatory insurance of crafts businesses which operate during the season, only.

This workshop comprises the recordings of donation of long-term non-financial assets in the Ledger, including the donation of long-term non-financial assets by the person outside the budget system.

If long-term non-financial assets refer to the persons in the general budget, they are not regarded as donations in terms of accounting regulations, whereas the assets obtained by the persons outside the general budget are regarded as donations and should be recorded in the profit and loss account.

This workshop of non-profit accounting comprises the recording of business events in the Ledger regarding the purchase of a business building and the guarantee deposit.

Upon purchase of a business building together with the corresponding land it is necessary to separate the value of the land and the value of the business object. However, if it is not possible to precisely determine, the value may be recorded as a unique amount.

The guarantee amount, the purpose of which is not important, changes the form of assets only.

In the system of double-entry bookkeeping the semi-annual financial statement, which shows the performance of non-profit organisations, is to be submitted. All non-profit organisations which operate within the system of single-entry bookkeeping are not obliged to present their reports within the system of non-profit accounting. The principle of drawing up and submission of semi-annual financial statements is the same as in 2018. The corresponding form has slightly been changed.

According to the provisions of the Labour Act workers have the right to annual holiday under certain conditions in the full part or partially, whereas a holiday bonus represents a substantive right of workers which can be exercised on the basis of the internal by-laws which determine workers’ rights. Due to the increased expenses which workers may have during their holiday, employers may pay a non-taxable compensation to their workers, which is defined as a holiday bonus. A holiday bonus represents a substantive right which may be exercised only if it is determined by certain by-laws, whereas other workers may exercise such a right only if their employer is willing to make a payment of such a receipt.

The right to tax the income of the Croatian tax residents residing in or from abroad depends on the provisions of the Double Taxation Prevention Agreement if it is effective and applied between the Republic of Croatia and the State of the source of income. In order to apply the determination of income earned abroad, it is necessary to ascertain whether the Republic of Croatia has the right to tax the relevant income in accordance with the provisions of the applicable contract. This right is different for different types of income and also depends on the circumstances, such as the time period in which that income has been realized. A summary of all provisions relating to the taxation of income which a resident of the Republic of Croatia achieves abroad is contained in the provisions of Articles 80 and 80 of the Income Tax Act. The provisions of the double taxation avoidance agreement take precedence over domestic tax regulations. According to the respective Double Taxation Agreements for a particular type of income, the right to tax is granted solely to the state of residence or to the state of income or, in some cases, the right is granted to both states. In that case, double taxation is avoided by the prescribed method of avoiding double taxation, which is the exemption from taxation in the Republic of Croatia or by the calculation or reduction of the tax liability established by the Republic of Croatia's tax regulations for the amount of paid income tax in the state of income.

For the purpose of preventing undeclared work and engaging workers through temporary, workers working 40 hours per week (for one or more employers) may, in accordance with the Labour Act, work for another employer. This possibility can especially be used by employers in seasonal activities when the need for workers is increased.  The article presents the ways of payment of salaries to such workers and the ways how such workers may exercise their substantive rights.

In the RRiF issue no. 6/19 the article presented the taxation viewpoint of sales of single-purpose vouchers in view of the seller and mediator including the examples of accounting for the above stated sales and use of such vouchers. This article analyses the taxation viewpoint  of sales of multi-purpose vouchers in view of the seller and mediator and presents the examples of accounting for sales of multi-purpose vouchers and their use.

The received or paid cash assets for the future delivery of goods or services are regarded as advance payments for which VAT tax payers have specific liabilities and treatments. Accordingly, the recipient of the advance payment should know what type of an invoice is to be issued, the time when the VAT liability on the advance payment emerges i.e. when the tax payers have the right to pre-tax. The article explains tax and accounting treatment of advance payments, which depends on whether they have been received or paid for the future deliveries in the country, in the EU or outside the EU i.e. the third countries.

The exported delivery of goods is considered a supply of goods from the Republic of Croatia to a taxpayer outside the EU or in the third country. The delivery of exported goods is proved by the taxpayer with the customs declaration, i.e. in the case of electronic declarations by the electronic message IE599 from the automated export system (ECS system), which confirms that customs clearance has been carried out and that the EU has been properly left. The exporter is exempt from VAT payment on the export of goods regardless of whether he/she is exporting personally or by some other person on his/her behalf, such as a forwarder. The same regulations regarding tax exemption apply to the export of goods by foreign tax payers who export goods from the Republic of Croatia- They should be registered in the Republic of Croatia for VAT needs if they wish to export goods in the third countries or the third area. However, the new viewpoints of the Ministry of Finance have made it clear that the exemption also applies to a domestic supplier who supplies the goods in the Republic of Croatia to a foreign taxpayer who will export such goods under the determined conditions.

Persons who receive receipts based on artistic activity and are residents of the Republic of Croatia are obliged to pay income tax in the Republic of Croatia regardless of the state in which the author’s fee has been paid and in which state the income tax has been paid, which according to the Act on Income Tax is recognized as the principle of world income. However, this does not in any way mean that the tax on the received income abroad is paid in both countries because the Tax Administration of the Republic of Croatia in a special procedure and on the basis of information paid by the artwork payer or by the authors themselves through the JOPPD or INO-DOH forms, determines the annual tax liability of every taxpayer according to the tax regulations of the Republic of Croatia. Accordingly, it recognizes 30% of the expenditures in a lump-sum in accordance with the Income Tax Act and another 25% lump sum according to the Act on the Rights of Independent Artists and Support of Cultural and Artistic Creativity. The contributions for pension insurance are calculated on such a reduced receipt for the purpose of determining the tax base. After a reduced receipt of the lump sums and contributions and the corresponding personal exemption, the income tax is charged at the rate of 24%, including surtax. The health insurance contribution is neither calculated nor paid.

Profit tax payers are obliged to pay monthly advances of profit tax during the year. The monthly amount of the advance payment is determined on the basis of the data reported in the tax return for the previous tax period so that the base for the calculation of the advance payment on the profit tax is divided by the number of months of performing the business in the tax period for which a tax return is filed on the PD form or PD-NN form if the profit tax calculation is carried out according to the cash principle.

However, the Tax Administration may modify the amount of the monthly advance payment on the profit tax upon the written request of the taxpayer, the supervised entity or any other business data available to it,. A decision on the new amount of the advance payment is obliging to the taxpayer from the date of finality of the decision until filing of the new tax return on the PD form or PD-NN form.

Any person who sells, supplies and purchases fuel oil for the purpose of further sale which have been released for consumption in the Republic of Croatia must obtain a special approval from the competent customs office. Special approvals do not have to be issued to tariff payers with the status of an authorized tariff warehouse keeper or a registered consignee. The article explains the purpose of using fuel oils with a reduced tariff amount and who is entitled to use it. The article also states the measures of control over the use of such oil and misdemeanour and administrative procedures for their misuse.

In view of transfer pricing, the author of this article presents an access to intangible assets whose value is difficult to assess in accordance with the current OECD Guidelines on Determining Transfer Pricing for Multinational Enterprises and Tax Administrations of 2017, resulting from a part of the Final Report Measure 8-10 BEPS 2015 from the year of alignment of value-added transfer pricing and the OECD Guidelines for Tax Administration for Access to Intangible Assets whose value is difficult to estimate from 2018 (Measure 8 of BEPS).

The article presents the viewpoints of the European Court of Justice on the adequacy of the evidence for the application of VAT payment exemption in the case of transport or mediation services in the transport of goods in the export procedure and in the case of the export of goods dispatched by mail. The principle of tax neutrality requires the exemption from VAT to be granted if the legal preconditions in terms of substantive law are met, even if taxpayers did not meet certain formal requirements.

Exports of goods have been made and the export exemption is applicable when the right to dispose of tangible property is transferred to the buyer by the owner and when the supplier has established that the goods were dispatched or transported outside the European Union or when the goods have physically left the European Union. The tax practice of a member state refusing to waive VAT exemptions for transport of goods directly related to the export of such goods only because the carrier cannot submit a customs declaration on the export of such goods is contrary to judicial practice.

During audit an auditor should pay a special attention to the transactions which seem unusual under the particular circumstances for the particular company. Unusual transactions may be indicators of frauds. Auditors usually use the specific and the advanced methods of analysing population in order to be able to deal with the quantity of data which companies generate. The author presents the ways of testing unusual entries.

A new tool for analysing the transaction network has been in use in the EU, which will enable members to quickly exchange and jointly process VAT data and thus detect suspicious transactions earlier. The Council of Justice Ministers approved new rules for early-stage restructuring for the purpose of preventing insolvency. It envisages lower administrative burden and easier digital information flow for transporters.

In the Croatian finance and business law literature there are neither theoretical nor practical standards built that can serve as guidelines in the case of the changed ownership  by the generation which established the company which is taken over as inheritance from a close or wider family or the third party. These issues are becoming more and more relevant with regard to the time span of 30 years because the first founders became mature people who are faced with the question of inheritance.

The Companies’ Act (Official Gazette, Nos. 111/93 to 40/19) regulates, in a rather strict manner, issues of inheritance and transfer of a business share. Accordingly, this article presents the German experience with the enterprise management code that has been acquired in two-hundred-year practice and the company law regarding corporate governance and the so- called succession or the transfer of business shares (capital) to successors or new owners who are not family business members.

A special regulation in the field of foreign currency operations in the Republic of Croatia determines the reports to be submitted to the Croatian National Bank, the persons obliged to submit them and the deadlines of their submission, all aimed at better monitoring of realisation of the balance of payments, the status of a foreign debt and the international investments of the Republic of Croatia.

This article presents a review of such reports which should serve as guidelines to the possible obligations of the persons participating in foreign currency operations. A non-resident person has to be included in such obligations.

Besides special clinics, health resorts and other hospitals, the companies providing services of health treatment and healthcare workers owning a private practice may provide catering services according to the Act on Health Protection. Some specific tourist agencies may provide touristic services in the field of health tourism, including special clinics, health resorts and other hospitals, companies providing health treatment and healthcare workers who own a private practice in accordance with the provisions of the above stated Act.

Health tourism is expected to become one of the main motives of travelling in the future. The specific factors for successful health tourism comprise the quality of special healthcare centres and accommodation capacities which should be in accordance with hotel standards.

The obligation to insure the members of the management board enables them to exercise certain rights in the field of obligatory insurance: the right to health care and compensation of salary during temporary inability to work due to illness. Besides, during the period of sick leave on the account of the Croatian Health Insurance Institute, the obligation to pay the contributions for the members of the management board is at a standstill.

Due to the lack of workforce, employers often, especially during the summer months hire minors to perform seasonal jobs. Minors have not yet reached the stage of development when it is considered that they are mentally and physically mature and capable of being self-reliant on themselves, and the legislator pays a special attention to their protection and determination of the minimum age for the conclusion of a contract on employment.

The author in the article describes how the contract on employment can be concluded with a minor, including a sample copy of the contract on employment as well as the authorization given to the legal representative by the minor to conclude a contract on employment. Measures are being taken to protect minors during work, as well as jobs where the minors cannot be employed. Finally, the article presents the jobs which may be performed by minors during school holidays.

The authors of the article present an overview of the most important issues which should be considered upon conclusion of the contract on gift giving, which is common and is usually signed in a routine way.

The purpose of the article is to briefly explain the most important aspects of signing the above stated contract and the liability to pay tax on gift giving for the recipients of gifts, which may arise in some cases.

The authors of the article explain a legal procedure of establishing a limited liability company in the case when the founder is a legal person, including the taxation viewpoint of such a case. In terms of law, the article explains the term of a company and the procedure of establishing a limited liability company by another limited liability company. In terms of taxation, the article explains the VAT taxation of the assets brought in the company and the way of recording investments in business records of the founder. 

The author of the article presents a short analysis of some essential changes of entering the data in the court register according to the new Act on Amendments to the Act on Court Register due to the fact that the implementation documents are still in process.

It should be pointed out that the reform of the company law does not only comprise the amendments to the Act on Court Register, but also the amendments to the Companies’ Act.

A company providing utility services is established according to the Companies’ Act (Official Gazette no. 111/93 to 40/19) and the new Act on Utility Services (Official Gazette no. 68/18). The founders, i.e. the owners of business stakes may be one or more units of local self-government or a physical person who performs certain utility activities based on the concession contract

Companies which perform the services according to the contracts signed before the Act on Utilities became effective may continue providing such services until expiration of the contract.

The article presents the ways of performing utility activities.

Non-profit legal persons may become VAT and profit tax payers due to their performance of certain activities (economic activities). In view of purchase of cars, such legal persons should precisely determine the purpose of purchasing and using a car. The article presents the purchase of cars by non-profit legal persons who are VAT and profit tax payers.

1. Opći pregled
2. Cijene u RH i EU-a
3. Proizvođačke cijene industrije RH i EU-u
4. Industrijska proizvodnja RH i EU-a
5. Građevinarstvo RH i EU-a
6. Vanjskotrgovinska razmjena
7. Trgovina na malo u RH i EU-u
8. Turizam
9. Plaće
10. Likvidnost i insolventnost
11. Zaposlenost i nezaposlenost RH i EU-a