One of the key novelties introduced by the Draft Amendments to the Act on Administrative Cooperation in the Field of Taxation (from August 2025) relates to the expansion of the scope of automatic exchange of information between EU Member States, which will now include crypto-assets. This is a change that Croatia is implementing based on an EU Directive that all Member States are obliged to transpose into their national legislation.

Certain “crypto-asset service providers” will be required to report a defined set of data on transactions their clients carry out to the Croatian Tax Administration, which will then automatically exchange this information with the competent authorities of other EU Member States. On the other hand, the Croatian Tax Administration will receive information from other EU Member States regarding crypto-asset transactions carried out by Croatian tax residents. The purpose is to enable tax authorities to more quickly and easily identify crypto-assets transactions that should have been reported for tax purposes but were omitted by the taxpayers.

It is envisaged that reporting will be carried out by type of crypto-asset, including information on purchases and sales for fiat currency or other crypto-assets, certain retail transactions (related to goods and services), as well as certain other types of transfers – thereby establishing a rather broad reporting scope.

The first exchange of information is expected to cover data starting from 1 January 2026. “Crypto-asset service providers” will be required to submit this data to the Croatian Tax Administration by 30 June of the current year for the previous calendar year, while the exchange of information between Member States must be completed by 30 September of the same year. Therefore, it is crucial that owners and/or investors in crypto-assets review their tax positions in a timely manner.

The proposed legislative amendments aim to improve tax collection related to crypto-asset transactions by enabling better identification of taxpayers who are owners and/or investors in crypto-assets but have failed to fulfil their tax reporting obligations. Unfortunately, the competent authorities in Croatia did not, at the same time, consider adequate protection of the crypto-asset owners and investors themselves, as taxpayers. Namely, the provisions of Croatian tax legislation (e.g., the Personal Income Tax Act, among others) still does not adequately regulate the tax treatment of crypto-asset transactions. As a result, owners and/or investors in crypto-assets are exposed to certain tax risks arising from the current state of the legal framework. Moreover, inadequate regulation almost certainly contributes to a higher level of unreported transactions by taxpayers themselves. We believe that, in addition to the proposed changes, it would be both desirable and necessary to simultaneously regulate the tax treatment of income and other transactions related to crypto-assets more clearly and comprehensively.

We previously highlighted the issue of inadequate tax rules (e.g., in the context of personal income tax) in our article published in February 2019: Questionable tax treatment of cryptocurrency trading, in which we analysed in more detail the shortcomings of the current legal framework.

We would also like to recall that already in 2018, the Croatian Tax Administration recognized that the tax treatment of cryptocurrency trading was inadequately regulated and issued a comprehensive guideline on the taxation of income (Reference: Class No. 410-01/17-08/29, Registration No. 513-07-21-01/18-4, Date: 19 March 2018). Through this guideline, the Croatian Tax Administration attempted to partially address the legal gap caused by the absence of appropriate legislative provisions. However, as we previously noted, certain parts of that guideline lack a proper legal basis.

Additional Amendments Introduced by the Draft Law The Draft Amendments to the Act on Administrative Cooperation in the Field of Taxation also introduce several other changes, such as:

• transposing the obligation to submit the so-called CbCR-notification (regarding the identity and tax residency of the reporting entity within a multinational enterprise group) from a bylaw into the law itself, in order to enable the application of penalty provisions in case of non-compliance,
• extending the automatic exchange of information to include income derived from non-custodial dividends, with exceptions for certain dividends exempt from corporate income tax,
• reducing the obligations of tax advisors and lawyers acting as intermediaries who invoke legal professional privilege. In such cases, they are no longer required to inform all other intermediaries, but only their own clients, about the reporting obligations related to reportable cross-border arrangements.