Personal scope of application As per 02 December 2022

Are there any deviations from the Directive in defining the intermediary?

2021/06/17

There are no deviations from the Directive.

How is an intermediary defined? Is there a differentiation between a corporate entity and an individual person?

2021/06/17

In principle, legal entities and as well as individual tax advisors registered at the Croatian Chamber of Tax Advisors can qualify as intermediary.

Can a corporate tax department (or its members) within a MNE or within a group of entities qualify as an intermediary?

2021/06/17

There are no deviations from the Directive with respect to the definition of intermediaries. There is no further guidance in Croatian legislation or Tax Authorities Instructions' on the subject whether a corporate tax department (or its members) within a MNE or within a group of entities qualifies as an intermediary.

How are the actions of designing, marketing, organizing, making available for implementation or managing the implementation of a tax arrangement defined?

2021/06/17

These actions are not defined.

Have the legal preconditions regarding the territorial nexus for an intermediary been implemented in accordance with the Directive?

2021/06/17

There are no deviations from the Directive.

Are there any other conditions apart from those of the Directive, such as the territorial nexus of a tax arrangement to a certain Member State, which trigger a reporting obligation of an intermediary (e.g. including intermediaries from outside the EU)?

2021/06/17

There are no deviations from the Directive.

In which cases is the relevant taxpayer obliged to report? Are there deviations from the Directive?

2021/06/17

The relevant taxpayer has a reporting obligation, instead of an intermediary, in the following three cases:1. Intermediaries are not required to report information due to legal professional privilege;2. There is no intermediary involved in the arrangement (the arrangement is designed and implemented in-house with no external help);3. Intermediaries involved in the arrangement do not have an EU nexus, and therefore have no reporting obligations.

Are there any other persons beside intermediaries or relevant taxpayers obliged to report?

2021/06/17

There are no deviations from the Directive.

Are there any deviations from the Directive in defining the relevant taxpayer?

2021/06/17

There are no deviations from the Directive.

Mechanism to avoid multiple reporting

Which measures have been taken to avoid multiple reporting obligations referring to an intermediary obliged to report in several countries? Are there deviations from the Directive?

2021/06/17

There are no deviations from the Directive. If the intermediary is liable to file information on reportable cross-border arrangements with the competent authorities of more than one Member State, such information shall be filed only in Croatia in the following cases:a) the intermediary is resident for tax purposes in Croatia;b) the intermediary has a permanent establishment in Croatia through which the services with respect to the arrangement are provided and the intermediary is not a resident for tax purposes in any other Member State;c) the intermediary is incorporated in or governed by the laws of Croatia and the conditions mentioned under point a) and b) are not fulfilled in another Member State;d) the intermediary is registered with a professional association related to legal, taxation or consultancy services in Croatia and the conditions mentioned under point a), b) and c) are not fulfilled in another Member State. The intermediary is exempt from reporting obligation if there is proof that the same information has been filed in another Member State.

Which measures have been taken to avoid multiple reporting obligations referring to more than one intermediary obliged to report? Are there deviations from the Directive?

2021/06/17

There are no deviations from the Directive. Generally, where there is more than one intermediary, the obligation to file information on the reportable cross-border arrangement lies with all intermediaries involved in the same reportable cross-border arrangement. An intermediary shall be exempt from filing the information only to the extent that there is proof that the same information has already been filed by another intermediary.

Which measures have been taken to avoid multiple reporting obligations referring to a relevant taxpayer obliged to report several countries? Are there deviations from the Directive?

2021/06/17

There are no deviations from the Directive. If the relevant taxpayer has an obligation to file information on the reportable cross-border arrangement with the competent authorities of more than one Member State, such information shall be filed only in Croatia in the following cases:a) the relevant taxpayer is resident for tax purposes in Croatia;b) the relevant taxpayer has a permanent establishment benefiting from the arrangement in Croatia and the relevant taxpayer is not a resident for tax purposes in any other Member State;c) the relevant taxpayer receives income or generates profits in Croatia and the relevant taxpayer is not a resident for tax purposes and has no permanent establishment in any other Member State;d) the relevant taxpayer carries on an activity in Croatia, and the conditions mentioned under point a), b) and c) are not fulfilled in another Member State. The relevant taxpayer is exempt from reporting obligation if there is proof that the same information has been filed in another Member State.

Which measures have been taken to avoid multiple reporting obligations referring to more than one relevant taxpayer obliged to report? Are there deviations from the Directive?

2021/06/17

There are no deviations from the Directive. If the reporting obligation lies with the relevant taxpayer and where there is more than one relevant taxpayer, the relevant taxpayer that is to file information is the one that features first in the list below:a) the relevant taxpayer that agreed on the reportable cross-border arrangement with the intermediary;b) the relevant taxpayer that manages the implementation of the arrangement. The relevant taxpayer is exempt from reporting obligation if there is proof that the same information has been filed by the other relevant taxpayer.

How does the National Tax Authority expect the conditions for exemption from filing a report to be met?

2021/06/17

The intermediary or relevant taxpayer can prove the exemption by referencing the number assigned to that specific arrangement by Tax Authorities.

Material scope of application

Are national tax arrangements subject to reporting under the Directive?

2021/06/17

National tax arrangements are not subject to report.

Which taxes are affected? Are there deviations from the Directive?

2021/06/17

All taxes with the exception of VAT, customs duties, and excise duties which are covered by other EU regulations on automatic exchange of information and compulsory social contributions paid to Member State, fees, and other certificates and documents issued by public bodies and payments of contractual nature.

Does the hallmark catalogue deviate from the Directive? If yes, to what extent?

2021/06/17

There are no deviations from the Directive.

Which hallmarks are linked with the main benefit test?

2021/06/17

There are no deviations from the Directive.

How is the main benefit test defined?

2021/06/17

The Main benefit test will be satisfied if it can be established that the main benefit or one of the main benefits which, having regard to all relevant facts and circumstances, a person may reasonably expect to derive from an arrangement is obtaining a tax advantage. According to Tax Authorities' Instructions, the examination of whether the main benefit test is satisfied is of an objective nature. It is not necessary to examine the motives or intentions of the person entering the arrangement, or whether the person expects to benefit from the tax benefit that will result from the arrangement or any other reason that the person may have to enter into the arrangement.

How is a tax advantage defined?

2021/06/17

According to Tax Authorities' Instructions, tax advantage may include relief or increased relief from tax, repayment or increased repayment of tax, avoidance or reduction of a charge to tax or an assessment to tax, avoidance of a possible assessment to tax, deferral of payment of tax or advancement of repayment of tax, and avoidance of an obligation to deduct or account for tax.

Are there any deviations from the Directive in defining a cross-border arrangement?

2021/06/17

There are no deviations from the Directive.

Is there a white list defining arrangements explicitly excluded from a reporting obligation? If yes, please provide details.

2021/06/17

White list defining arrangements excluded from reporting obligation does not exist.

Are there any deviations from the Directive in defining associated enterprises?

2021/06/17

There are no deviations from the Directive.

Reporting process

When is a cross border arrangement made available for implementation (e.g. handover of contract documents)?

2021/06/17

According to Tax Authorities' Instructions, a tax arrangement can be made available for implementation in several ways, e.g. taxpayer may approach the intermediary seeking advice or a solution, and the intermediary may make the arrangement available in response to the taxpayers' request. Further, the arrangement could be made available during the performance of some other business between the intermediary and the client, if, for example, the intermediary recognizes the potential need of the client and offers the arrangement as a solution. Also, proactive marketing by intermediaries can have the meaning as if the arrangement has been made available to potential clients. This may include online advertising of the arrangement or through offers to potential clients. All the details of the arrangement do not have to be finalized in order to be considered as having been made available as long as the substance of the arrangement itself can be determined. For example, if an arrangement is designed and offered to a client but the client withdraws from its application, the arrangement will still be deemed to have been made available and therefore subject to reporting.

When is a cross-border arrangement ready for implementation?

2021/06/17

According to Tax Authorities' Instructions, one is willing to implement the arrangement if he is in a position where he can take the first step in implementing the arrangement with the purpose that the arrangement will be implemented after the first steps are taken.

When has the first step in the implementation of a cross-border arrangement been made?

2021/06/17

There is no specific guidance.

Which information should be included in the report? Are there deviations from the Directive?

2021/06/17

There are no deviations from the Directive.

What does the reporting process look like? Are there deviations from the Directive?

2021/06/17

In general, the intermediary has to file the whole report. After submitting the report, the intermediary will receive a number by the Tax Authority. Afterward, the intermediary is obliged to notify (number and relevant information that was submitted) other intermediaries and relevant taxpayer. In cases where an intermediary invokes the legal privilege, other intermediaries or the relevant taxpayer will be obliged to submit the report.

Is the entire report to be provided by the intermediary/relevant taxpayer? Who must provide the report?

2021/06/17

The intermediary, as well as the relevant taxpayer, can be obliged to provide the report.There is no specific guidance.

What are the respective deadlines for the intermediary and the relevant taxpayer to file the report? Are there deviations from the Directive in terms of filing the information within 30 days?

2021/06/17

There are no deviations from the Directive.

Which numbers are assigned by local tax authorities to the cross-border arrangements?

2021/06/17

Croatian Tax Authorities will assign to each report of a cross-border tax arrangement a number. The number can be used as proof that the report has been filed.The number contains in total 17 signs (two-digit country code, A as arrangement date of filing and combination of 6 letters and numbers).

What is the reporting deadline for arrangements the first step of which was implemented between 25 June 2018 and 30 June 2020?

2021/06/17

The reporting deadline was February 28, 2021.

When is the reporting deadline for arrangements for which the event triggering the reporting obligation lies between 1 July 2020 and 31 December 2020?

2021/06/17

The reporting deadline was January 31, 2021.

When is the reporting deadline for arrangements for which the event triggering the reporting obligation lies after 1 January 2021?

2021/06/17

The reporting deadline for an arrangement for which the reporting obligation lies after 1 January 2021 is 30 days after the event triggering the reporting obligation occurs.

Penalties

In which cases are penalties imposed?

2021/06/17

A penalty for the offense is prescribed in the following cases: 1. if the intermediary or relevant taxpayer do not file a full report in the prescribed deadline; 2. if the intermediary does not file a periodic report with updated information on reportable arrangements every three months; 3. if the relevant taxpayer does not file information about their use of arrangement in each year for which they use it or if he does not file a notification within 3 months after the end of the year in which the arrangement was used;4. if the intermediary invokes legal privilege and does not notify within 3 days other intermediary or the relevant taxpayer.

What are the penalties?

2021/06/17

The penalty varies from approx. EUR 270 up to 27,000 for legal entities and for the responsible person within the legal entity from approx. EUR 270 up to 2,700. If the intermediary or the relevant taxpayer is an individual the penalty varies from approx. EUR 135 up to 13,400.

Is a distinction made between penalties imposed on intermediaries/relevant taxpayers/other persons obliged to report?

2021/06/17

No distinction made between intermediaries and relevant taxpayers.

What are the penalties in case of redundant reports? A redundant report is a report, which was filed, although there is no obligation to file one.

2021/06/17

There are no penalties for redundant reports.

Do the penalties differ with regard to incomplete, incorrect, missing or late reports? Are there any gradations?

2021/06/17

The penalties do not differ.

Are arrangements the first step of which was implemented between 25 June 2018 and 30 June 2020 treated differently in the means of penalties?

2021/06/17

The penalties do not differ.

Other aspects

Do already other reporting regimes on cross-border arrangements exist?

2021/06/17

No other disclosure regimes exist.

Are there any other special deviations from the Directive? 

2021/06/17

There are no other deviations from the Directive.

What is the name of the national Tax Authority responsible for DAC6?

2021/06/17

Croatian Tax Authorities.

Do any other obligations apart from reporting a reportable cross-border arrangement exist under the national DAC6 legislation? (i.e. indication of the arrangement in the tax return)

2021/06/17

There are no other obligations.

Professional privilege/secrecy

Who is primarily obliged to report? Is there a primary reporting obligation of the intermediary or the relevant taxpayer? Is there legal privilege and in how far has it been considered for allocating the reporting obligation?

2021/06/17

Intermediary is primarily obliged to report. Intermediaries have the right to a waiver if the reporting obligation would breach the legal professional privilege under national legislation that regulates their professions. If intermediary notifies the relevant taxpayer or another intermediary of a waiver, the obligation to submit information transfers to other notified intermediary or if there is no such intermediary to the relevant taxpayer.

Does the reporting obligation breach a legal professional privilege under national law?

2021/06/17

Yes.

Does the national law make reference to professional privilege or professional secrecy?

2021/06/17

Act on administrative cooperation in the field of taxes by which provisions of Directive (EU) 2018/822 ("DAC6 Directive") have been implemented in Croatian legislation regulates the possibility that intermediary has the right to a waiver due to professional secrecy and indicates that for the definition of this term reference should be made to other national legislations that regulate certain professions, i.e. Croatian Lawyers Act and Tax Advisory Act.

What is the difference, as per the national law, between professional privilege and professional secrecy?

2021/06/17

Having in mind that the Act on administrative cooperation in the field of taxes regulates professional privilege by referencing to Croatian Lawyers Act and Tax Advisory Act which mention legal/professional secrecy, we believe that these terms are used as synonyms.

To which categories of intermediaries does the professional privilege or professional secrecy apply?

2021/06/17

The reporting obligation could be in breach of the legal professional privilege for certain professions e.g. lawyers and certified tax advisors in Croatia. Professional privilege is regulated for these professions by the Croatian Lawyers Act and Tax Advisory Act. According to the Croatian Lawyers Act, a lawyer is obliged, to keep as a professional secret everything that the client has entrusted to him or that he has otherwise learned while representing the party. Furthermore, other persons who work or have worked in a law office are also obliged to keep professional secrecy. According to Tax Advisory Act, a certified tax advisor (who has a relevant certificate and is a member of a Croatian Chamber of Tax Advisors) is obliged to keep as a professional secret everything that the client has entrusted to him or that he has learned in another way while performing his work and is "entitled" to a waiver form filing information.

In the context of the reporting obligation, under which conditions are the intermediaries entitled/obliged to make use of professional privilege or professional secrecy?

2021/06/17

Intermediaries, i.e. lawyers and certified tax advisory have the right to a waiver if the reporting obligation would breach the legal professional privilege under national legislation that regulates their professions. Therefore, the professional privilege of these intermediaries is an obligation according to special acts that regulate their professions. With respect to the conditions that need to be fulfilled by the intermediary in order to make use of professional privilege, the obligation to report will transfer to another intermediary or relevant taxpayer if the intermediary notifies other intermediaries or if there are no other intermediaries the relevant taxpayer on invoking professional privilege within 3 days.

In cases in which professional privilege or secrecy applies, please describe the procedure for notification.

2021/06/17

Notification to other intermediaries or, if there are no other intermediaries, to the relevant taxpayer is required within 3 days from invoking the professional privilege.There are no specific details on the notification procedure given by the Croatian Tax Authorities.

Does the national law provide specific conditions to waive professional privilege or professional secrecy?

2021/06/17

According to the Code of Ethics for lawyers, disclosure of legal secrecy is allowed only if the party/client unambiguously allows the lawyer to do so, if it is necessary for the defence of the lawyer or if it is necessary to justify the lawyer's decision to leave the defence (terminate the representation). On the other hand, national legislation that regulates the profession of certified tax advisors does not specify these conditions.

Ana Perkovic
Senior Assistant
Paula Maric
Supervisor