Računovodstvo, revizija i financije 5/2020

As an exception to the special regulations on profit taxation, the annual profit tax return for 2019 (PD Form or PD-NN Form) is to be submitted to the Tax Administration until 30 June 2020 at the latest. The liabilities for public payments, determined on the basis of the submitted profit tax return are due on 31 July 2020. In accordance with the Rulebook on Deadlines for Submission of Financial Reports and Accounting Documents under Specific Circumstances, the deadlines for submission of the annual financial reports to the FINA have been extended. The deadline for submission of the annual reports for statistical needs is 30 June 2020, whereas the deadline for public disclosure is 8 months after the last day of the business year. Consolidated annual financial reports are to be filed within 10 months after the last day of the business year.

The Croatian Government have so far provided two subsidy packages in order to preserve working posts and help the economy due to the COVID-19 epidemic. The article presents the salary calculation and the obligation of the employer who has received the subsidies for preservation of working posts. The article also presents the liabilities for public payments by sole traders who have received the above stated subsidy.

Due to the emergency situation related to the COVID-19 epidemic, as a part of the measures adopted to assist the economy aimed at solving the problem of illiquidity, mitigating economic distortions and facilitating entrepreneurial activities, the following article provides an overview of VAT determination for entrepreneurs who wish to defer their VAT liabilities, i.e., to determine the VAT liability according to collected receivables. This option is regulated in the Amendments to the Rulebook on the Implementation of the General Tax Act, which refers to the period of determining the VAT liability for March and April for monthly VAT payers and for January, February and March 2020, for quarterly taxpayers. If the special circumstances last longer, the period may be extended by another three months.

The above stated Rulebook determines the new way of VAT determination, VAT payment upon import and VAT exemption on donations.

In April 2020 the new measures on tax reliefs were introduced, which are implemented in the Par. 107.a of the General Tax Act and are regulated in more details in the Rulebook on the Amendments to the Rulebook on the Implementation of the General Tax Act.

Under the specific circumstances caused by the Corona virus pandemic, taxpayers may be tax exempted if they have fulfilled certain conditions (fall of income) Depending on the rate of the income fall and the size of the enterprise, the tax exemption may be in the full amount or in proportion to the fall of income.

In this article, the author discusses the amendment to the Act on Enforcement of Funds, which, of course, due to the emergency situation caused by nCoV disease (COVID-19), introduced a moratorium on enforcement of funds on the account kept by FINA, in relation to enforced individuals (citizens).

The Decision on support for the preservation of jobs in the sports system affected by coronavirus (COVID-19) was adopted and published on the websites of the Central State Office for Sports (https://sdus.gov.hr/). Applications for grants to preserve jobs in the sports system were opened on April 20, 2020.

Na sjednici Vlade održane 23. travnja 2020. godine objavljen je plan reaktiviranje gospodarskih djelatnosti u tri faze 27. travnja, 4. svibnja i 11. svibnja. Navedeni plan prikazan je u nastavku.

Selling goods online is an increasingly present form of distance selling, and its benefits have come to full expression in the special circumstances caused by the coronavirus. From the point of view of the Trade Act and the VAT Act, a "distance selling" represents the activity where goods are offered to potential buyers by means of distant communication and then delivered to the buyer directly by the seller or through an intermediary (post or other appropriate means). This article presents the minimum technical requirements related to sales facilities which provide such a type of sale, including the accounting and taxation viewpoints of online sales of goods in the country.

The measures introduced to help the economy in the current special circumstances such as the subsidy paid by the Croatian Employment Service, deferral of tax liabilities, exemptions from co-financed contributions and exemptions from tax liabilities due to falling revenues of more than 50% raise a number of questions regarding the registration of these business events in the business records of the entrepreneur. In this article, the author explains in a practical way the method of accounting for these business events.

In this article, the author provides a brief overview of the accounting procedures for business events arising when damaged buildings are repaired or removed and rebuilt. The stated accounting procedures refer to business facilities in which the activity of business entities is performed. This does not imply the restoration and rehabilitation of cultural monuments, sacral buildings, etc. that are owned by the state, local government units or religious communities.

In this article, the author explains the costs of current and investment maintenance of plants and equipment and presents the examples of accounting monitoring of these costs. In addition,  the article explains the accounting monitoring of the costs of replacing significant parts of plant and equipment on examples from business practice.

This article addresses several relevant standards that accountants should keep in mind when their companies sell goods (and products) on merchandise credit. This includes the application of IFRS or applicable IAS, while for companies that apply HSFI, the stated procedures can be applied since they are not regulated by the above stated standards.

As the collection of long-term receivables can be problematic, value adjustment procedures are presented, both from the accounting point of view and from the point of view of the Profit Tax Act, which regulates the issues of recognizing the write-off of such receivables.

The issues presented in this article are rarely addressed in the professional literature, so the views of the authors should find their confirmation in the future practice.

A donation in the budget system is considered to be a gift received / given to a person from / outside the budget system. Accordingly, the forms of donation can be different. This workshop presents posting templates in a number of different cases. The basic provision of the budget accounting system is that donations are always reported as income (gifts received) or expenditure (gifts given).

Some non-profit organizations are persons who are actively involved in collecting and providing humanitarian aid. Due to the fact that they may be in different relations with the donor or recipient of the aid, they must be careful whether these relations will always generate income or expenditure. In the case when it has been determined during the control of the spending of donations that they have not been used properly, the non-profit organization is not entitled to them regardless of the fact whether they need to return them immediately or they can remain temporarily available to it with the possibility of subsequent approval of some other costs.

If the employer cannot offer the employee the full scope of work, and yet due to the nature of the work the employee needs to enter into an employment contract (because the employee cannot be hired based on temporary employment contract or through additional employment), the employer may sign a part-time employment contract with the employee. In the new circumstances caused by the corona virus and the natural disaster of the Zagreb earthquake, this way of hiring or changing contracts from full-time to part-time can be one of the ways the employer can reduce wage costs while keeping a worker's job. As it is the case from the beginning of 2009, the contributions should be calculated on the amount of gross salary which is determined by the contract. However, there are some exceptions. The article presents what kind of salary calculation and what material rights the employer should apply when calculating the salary.

In view of the declared epidemic of the COVID-19 and the recent earthquake in the City of Zagreb, the topic related to the mobilization of persons in rescuing people and property is being brought up again. For these activities, these persons receive fees which are in a special way subject to the obligation to calculate and pay public benefits. The corresponding explanations can be found in this article.

The most common substantive right of a worker paid by the employer, regardless of whether it is so determined by a collective agreement, labour regulations, employment contract, etc., is the compensation for transport to and from work. Due to the difficult conditions under which public transport operates during the circumstances related to the impact of coronavirus, different rules regarding their non-taxability apply.

Since April 1, 2020, the amended provisions of the Maternity and Parental Aid Act has been applied. The maximum amount of the compensation for parental leave is increased from HRK 3,991.20 to HRK 5,654.20 for the period of a child’s life from 6 months up to a one year. This provision refers to the persons who are already exercising such a right. In addition, the condition for exercising the right to compensation determined in the amount of the average paid salary in 6 months before the month when the use of maternity leave began is the continuous insurance period reduced from 12 months to 9 months continuously and from 18 months to 12 months with interruptions in previous two years. Other provisions of the above stated Act have not been amended. The Act on Maternity and Parental Benefits regulates the rights of all insured persons within the HZZO. The article presents the maternity and parental benefits in accordance with above stated Act, including the new provisions only for employees who exercise these rights on the basis of employment.

The employment contract can be terminated by the employer or the employee. The right to severance payment is determined by the Labour Act, and in certain cases workers are guaranteed the right to severance payment only in the case when the employer terminates the employment contract. However, the right may also be determined by other enactments which regulate the rights of employees, and then the right to severance payment can be determined when the employee terminates the employment contract with the employer. Whether this is a severance payment to be taxed or the amount provided for payment can be paid without the calculation of income tax and surtax, is determined by the Income Tax Act and the Rulebook on Income Tax. This article describes the cases in which the employee is entitled to severance payment when terminating the employment contract, and the cases when it is a taxable amount and when it is non-taxable.

When resolving requests for recognition of pension insurance rights and determining value points and thus the amount of pension, it is important to determine the insurance period in the Croatian Pension Insurance Institute, and the realized salary or the base on which contributions were paid during the insurance period. If in the procedure of control of data on insurance length of service and bases for exercising pension insurance rights as a condition for exercising pension rights, it has been determined that not all of the above data were recorded for the insured person, which should have been recorded on the basis of submitted forms 4P.R-SM and JOPPD), the Croatian Pension Insurance Institute will ex officio ask the employer to provide the required information for the particular employee. The required information is submitted in the determined form MPP-1.

From a tax point of view, i.e. from the point of view of VAT, distance selling made by a taxpayer from one EU Member State to non-taxable customers in another EU Member State has a special tax position related to the delivery threshold of goods determined by the other EU Member State. In the article, the author explains which types of sales are included in these sales and what are the obligations of the seller - the Croatian taxpayer.

Citizens - "renters" are usually not subject to VAT on the provision of accommodation services in rooms, apartments, holiday homes or camps and can pay income tax as a lump sum. In 2020, the Amendments to the Rulebook on Flat-Rate Taxation of Rental and Organization of Accommodation in Tourism apply. The tax amount to be paid by renters depends on the decision made by the representative body of local self-government units.

Although on March 19, 2020, the Civil Protection Headquarters of the Republic of Croatia made a decision on measures to restrict social gatherings, work in commerce, services and sporting and cultural events, we sincerely hope that this Decision will soon be withdrawn and that ‘life’ in the Republic of Croatia will continue in all economic activities, as well as to renters. The article also provides a brief overview of the obligations and measures which can be used by renters during the COVID-19 epidemic.

The tax position of telecommunications services, broadcasting services and electronically provided services depends on their recipient and the status of the service provider. If a taxpayer from the Republic of Croatia performs these services to another taxpayer, the basic principle of taxation applies, which means that the place of taxation is the country of residence of the recipient of the service. However, if these services are provided to non-taxpayers, the place of taxation is also their country of residence, but the taxpayer from the Republic of Croatia for the purposes of providing these services should register for VAT in these countries or report services through the RH-MOSS system . The MOSS system enables taxpayers from the Republic of Croatia, but also taxpayers from third countries, to provide services from the Republic of Croatia and submit VAT returns in the Republic of Croatia, but for tax purposes in other EU member states. However, if the value of these services performed in the previous or current calendar year does not exceed HRK 77,000.00, the domestic taxpayer may apply taxation of services in the Republic of Croatia or waive the "threshold" of delivery.

In times of natural disasters and unexpected circumstances there is an expected interest in helping people in need.

The article provides a summary of how to collect sources from which donations can be financed and looks in more detail at their tax position. It points to the fact that in everyday life, even in business, terms that have a specific content in special regulations are used alternately, without specifically referring to them, which creates additional confusion in communication.

Due to the coronavirus epidemic, measures within the competence of the Institute for Expertise, Vocational Rehabilitation and Employment of Persons with Disabilities were adopted to maintain the employment of persons with disabilities. The article clarifies the adopted measures.

The article presents the views of the Court of Justice of the European Union regarding the application of the tax exemption from VAT in the case of the provision of medical care services. In the processed cases, the Court considers the possibility of applying the exemption to the services of specialists in clinical chemistry and laboratory diagnostics and the conditions for the application of this exemption. Furthermore, the Court considers whether, in the context of the application of the tax exemption, the medical or paramedical professions must be governed by the specific rules of a Member State. The possibility of applying different tax rates for drugs and medical products was also analysed, depending on whether they were delivered as part of therapeutic or aesthetic procedures or treatments. Furthermore, the Court provides guidance on the tax treatment of prescriptions of cytostatic drugs intended for the provision of medical care services.

After the World Health Organization declared the exceptional situation of public health of international importance due to COVID-19 on January 30, 2020, due to further escalation, it declared the disease a pandemic on March 11, 2020.

Due to the pandemic, the European Commission published the Decision of 3 April 2020 on exemptions from customs duties and VAT on imports of goods necessary to combat the effects of the COVID-19 pandemic during 2020, which allows Member States affected by the coronavirus pandemic a temporary suspension of customs duties and VAT on protective equipment, means intended for testing or medical devices such as respirators. The intention of such a temporary exemption of import duties and VAT is to financially facilitate the procurement of medical equipment essential for medical staff.

In the article, the author presents the specifics of reporting and procedures in the audit of financial statements that end the business year on 31 December 2019 and those that have the end of the business year after that date, all at the time of special circumstances - the COVID-19 pandemic. The article provides examples of disclosures in the notes to the financial statements related to events that do not require adjustment and the example of disclosures related to the going concern assumption, all in accordance with IAS 10 “Events after the Balance Sheet Date” or HSFI 4. The article also contains examples of auditors' opinions which represent the result of actions or non-actions of entrepreneurs in relation to disclosures in accordance with IAS 10 or HSFI 4, all in accordance with the applicable International Auditing Standards.

The International Accounting Standards Board (IASB) has intensified its activities over the past month to support entrepreneurs in applying IFRS during the period of increasing economic uncertainty caused by the COVID-19 pandemic. Four meetings were held at which conclusions and instructions were issued, as well as educational materials on the application of IFRS governing areas of particular importance at this time of the COVID 19 pandemic. This applies in particular to IFRS 9 and IFRS 16.

A serious disturbance in the EU economy has led to special aid measures being approved. In order to mitigate these disturbances, the temporary framework provides for five forms of support. Under the temporary framework, members may provide direct non-refundable grants, recapitalisations, selective tax breaks and advances, corporate credit guarantees and short-term export credit insurance.

Certain catering services can be provided by natural persons - citizens (renters) and holders or members of family farms under the conditions regulated by the Act on Provision of Catering Services and the corresponding bylaws A number of issues have arisen referring to the conditions and the way of performing such activities as well as payment of tourist tax, especially after the new circumstances due to which the tourist tax is reduced or released for this year. The answers to current questions are presented in the article.

In special circumstances, the Civil Protection Headquarters of the Republic of Croatia adopted a number of measures relating to the restriction of social gatherings, work in stores, service providing activities and the holding of sports and cultural events. The Act on Exceptional Price Control Measures regulates the conditions under which the competent state bodies may take control measures in the area of prices, including the ways of implementation of these measures. The article presents the information on work of stores in special circumstances and price control for certain products carried out by the State Inspectorate.

Regular termination of the employment contract, as one of the ways to terminate the employment contract, which is sent according to the regular course of events, does not lose its relevance in the practice neither in the current situation caused by the COVID-19 pandemic. Accordingly, a variety of questions arise frequently. In this article, the authors present the institute of regular termination of employment contracts, with an emphasis on practical issues and examples.

In this article, the author presents an overview of force majeure in the law of the Republic of Croatia with an emphasis on contractual relations. The notion of case (casus) and its distinction from force majeure is additionally treated. In particular, it provides insight into the definition of special circumstances, which is represented in a number of urgently enacted laws in order to prevent the negative consequences of coronavirus disease in the Republic of Croatia. Finally, the meaning of the notion of necessity in contractual relations is described. Quite justifiably so far, force majeure has not been a very important topic in the law of obligations in the Republic of Croatia, nor has it been dealt with in more detail. Coronavirus disease, and after that the earthquake in Zagreb, suddenly made this topic a current issue.

Legal entities, especially non-profit organizations, should consider how they want to help individuals in need. It is often desirable that this is in accordance with special regulations governing the provision of humanitarian aid. If this is not the case, then they provide assistance that, according to special regulations, does not have the characteristics of humanitarian aid.