CFC rules and their implication for 2019 corporate income tax

12.2019.

Controlled foreign company (CFC) rules were introduced in the Croatian corporate income tax regulations at the end of 2018, but in 2020 they shall be for the first time actually applied (i.e. as part of 2019 corporate income tax computation). Even though in some aspects the new rules have not been defined in clear and sufficiently precise way, since their introduction there were not many expert comments or discussions on the application of the new rules. This is not surprising as during 2019 focus had not yet been put on those rules because 2019 corporate income tax will be in focus in 2020. Also, these new rules will be relevant only for some categories of corporate income taxpayers in Croatia.

Enclosed on our web there is an Article written by Maja Damjanović (full text available in Croatian language only - PDF 4MB) which was published in RIF in November 2019 edition, prior to the start of the actual application of the new CFC rules, with an aim to point out on identified aspects which are not clearly and precisely defined, to inspire additional expert discussions concerning those aspects and to highlight a need for additional changes of the relevant legal provisions.