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    Transfer Pricing Study


    Croatian Tax Authority have formed special teams to review related party transactions, including corresponding Transfer Pricing documentation, in accordance with the Croatian legislation.

    In practice, the Tax Authorities require that large taxpayers deliver Transfer Pricing documentation together with their Annual Corporate Profit Tax Return. All other taxpayers are required to do so immediately upon the first request of the Tax Authorities.

    The obligation and specific form of Transfer Pricing documentation is prescribed by the Croatian Corporate Profit Tax (CPT) Law.

    Non-compliance with the corresponding Transfer Pricing documentation, draws among others, the following monetary fines, tax and penalty interests:

    • monetary fines in the range from HRK 2,000 to 200,000 for legal entities;
    • monetary fines in the range from HRK 500 to 20,000 for the responsible individuals within the legal entity;
    • 20% CPT on the difference for non-arm’s length transactions between related parties;
    • penalty interest at 14% p.a., or 12% p.a. as of 1st July 2012;
    • possible criminal prosecution under the new Criminal Law with regard to the director’s responsibility in the case of tax evasion, as of 1st January 2013.

    Transfer Pricing Study


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