At it session held on 16 December 2015 the Croatian Government adopted a regulation amending the Income Tax Act and simplifying the procedures around capital gains tax processing. Pursuant to that:
- It has been defined that the capital gains tax has to be calculated, withheld and remitted by 31 January of the current year for all capital gains realised in the previous year decreased by the realised capital losses.
- The provisions prescribing the submission of annual reports by taxpayers, which realised capital losses while disposing of financial instruments by 15 January of the year following the year when the capital loss was realised, has been abolished.
- The obligation of management companies or persons managing financial assets of taxpayers pursuant to a contractual relationship to calculate, withhold and remit the capital gains tax simultaneously with the payment, has been abolished.
The regulation will come into effect on 1 January 2016, simultaneously with the introduction of capital gains tax.
Impact on investors: With effect from 1 January 2016 capital gains tax will be introduced for resident and non-resident individuals. Calculation, withholding, remittance and reporting of the tax must be done by 31 January of the current year, for the previous year. The basis for calculating the tax is the positive difference between the realised capital gains and the realised capital losses, which will be taxed at the rate of 12%.
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