Croatia

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Business Environment

Business Practices

General information: Brochure by Communicaid, general basic remarks on Croatian business culture and habits.
Kwintessential , Brief overview on Business customs and etiquette in Croatia.
Opening hours and days: Banks open from Monday to Friday usually from 8.00 AM to 7.00 PM, on Saturday from 8.00 AM to 12.00 AM
Public administrations are opened Monday to Friday from 9.00 AM to 5.00 PM
Shops are opened Monday to Friday from 8.00 AM to 8.00 PM and on Saturday from 8.00 AM to 3.00 PM

Public holidays

New Year	1st January
Epiphany	6th January
Easter Monday	Movable feast
International Labor Day	1st May
Corpus Christi	Movable feast (22nd May in 2008)
Anti-fascist Resistance Day	22nd June
Statehood Day	25th June
Victory and Homeland Thanksgiving Day	5th August
Assumption Day	15th August
Independence Day	8th October
All Saints' Day	1st November
Christmas	25th and 26th December

Periods when companies usually close

New Year

1 week between Christmas and New Year

Accounting Rules

Tax year: The fiscal year begins on January 1-st and ends on December 31 of the same year.
Accounting standards: In Croatia, International Financial Reporting Standards are mandatory for big companies and for those that have their bonds on the stock exchange market. All the others can also report respecting the rules set by Croatian Committee for Financial Reporting Standards, a 9-members professional body appointed by the government.
Accounting regulation bodies: Croatian Committee for Financial Reporting Standards (in Croatian only)
Croatian Ministry of Finance
Croatian Tax Administration Office
Croatian Financial Services Supervision Agency
International Financial Reporting Standards
Accounting reports: These documents must contain: a balance sheet, a profit and loss account, a cash-flow report, a review of the changes of the authorized capital, comments and annexes.
Publication requirements: The Croatian entrepreneurs are subjected to the obligation of information about their financial situation. The documents of financial information must be drafted in Croatian and expressed in the national currency (the Croatian kunas) usually once per calendar year. A business year can be different from the calendar year only if there is an exception or if the activity is a seasonal one. The account book and the ledger must be kept up to date and then kept during at least 11 years.
Professional accountancy bodies: Croatian Association of Accountants and Financial workers (in Croatian only)
Certification and auditing: The financial documents of firms with more than 30 million croatian kunas (approx. 4.3 mil. EUR) annual sales should be checked by an independent external auditor who will have the responsibility to guarantee the sincerity and the accuracy of the given information.

The State Audit Office

Croatian Auditing Chamber (in Croatian only)
Accounting news: Provides up-to-date and valid information on Taxes, Finances and Legislation (in Croatian only).

Tax Rates

Consumption taxes

Nature of the tax: Value Added Tax. In croatian : Porez na dodanu vrijednost, PDV.
Tax rate: 23%
Reduced tax rate: 0% on bread, milk, technical and educational books, medicines (approved by the national state health insurance office), surgical material for implants, scientific magazines, national film department.
10% on accomodation services, daily and periodic newspapers/magazines (if not for advertisement purposes)
Other consumption taxes: There are excise taxes on oil based-products, tobacco, alcohol drinks, soft drinks, coffee, personal cars and luxuries. Some Local Authorities also impose taxes (3% on the selling price of drinks in catering activities, taxes on the advertisement).

Corporate taxes

Company tax: 20%
Capital gains taxation: Capital gains are included in taxable income and subject to tax at the normal corporate income tax rate.
Main allowable deductions and tax credit: None.
Other corporate taxes: Value Added Tax (VAT), Real Estate Transfer Tax (5%), special taxes (state or county) such as: luxury products, motor vehicles, alcohol, tobacco etc.

Individual taxes

Tax rate

Lower than HKR 38,400	15%
From HKR 38,401 to HKR 96,000	25%
From HKR 96,001 to HKR 268,000	35%
Beyond HKR 268,000	45%

Allowable deductions and tax credit: For family with children, for individuals living in certain recognized undevelopped areas, for self-employment, for research costs of self-employed persons.

Double taxation treaties

Countries with whom a double taxation treaty have been signed: See the list of the double Taxation Agreements signed.
Whithholding taxes: Dividends: 0%, Interest: 15%, Royalties: 15%

Sources of fiscal information

Tax Authorities: For further information, consult the website of Tax Administration in Croatia.
Ministry of Finance

Intellectual Property

National organizations: The body responsible for industrial property is the State Office for Intellectual Property.
Croatia signed the Agreement of Paris concerning the protection of industrial property and the agreement which establishes the World Intellectual property Organization (WIPO). They are a part of the Agreement of Madrid, on the international register of the trademarks.

National regulation and international agreements

Type of property and law	Validity	International agreements signed
Patent Patent Law 2007	20 years, may be renewable in some cases
Trademark Trademark law 2007	10 years (renewable for indefinite number of times)	Trademark law treaty Nice agreement Protocol relating to the Madrid Agreement
Design Design Law 2007	5 years (renewable, for a maximum of total 25 years)
Copyright Copyright law	70 years after author's death

Legal Framework

Independence of justice: The judicial system suffers from numerous problems, most notably inefficiency. Judicial personnel shortages have led to a huge backlog of cases, though it decreased in the last years. Excessive trial length and a lack of enforcement of judicial decisions, especially in cases related to the repossession of property owned by Serbs, plague the system. Despite some improvements, a lack of impartiality among the local courts remains a problem.
Equal treatment of nationals and foreigners: Yes, the law prohibits discrimination based on gender, age, race, disability, language, or social status. However, some cases of discrimination against women, ethnic Serbs, and Roma are still reported.
The language of justice: Official language also in justice is Croatian. The exception are officially recognized ethnical minorities: Serbs, Bosnians, Italians, Hungarians, Albanians, Slovenes and Roumanians. They have right to use their language in the local courts where their minority rights are officially recognized.
Sources of the law and legal similarities: The main source of the law is the constitution of 1990 (revised in 2001) which is based on civil law system. However, due to the strong will to enter the EU and based on the agreements with the EU, the Croatian legislation has been widely harmonizing with the EU legislation in order to be prepared to enter the EU in 2010 or later, according to estimations.
Checking national laws online: Official Gazette of Croatia publishing all legislation (in Croatian only).
A database on national laws

Standards

National standards organizations: Croatian Standards Institute
State Office for Metrology
Integration in the international standards network: Croatian Accreditation Agency is a full-member of European Co-operation for Accreditation (EA) and associate member of International Laboratory Accreditation Cooperation (ILAC). The rules of accreditation are in line with European standards 45000 and international standards 17000 according to the rules and guidelines of EA, ILAC and IAF.
Classification of standards: Accreditation is done according to the international (ISO) and European (EN) standards that are recognized as Croatian (HRN) ones.
Online consultation of standards: Catalogue of Croatian Standards
Certification organizations: Croatian Accreditation Agency
State Office for Metrology

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