The identification mark will be used as a tax number only from January 1, 2010.

From the beginning of 2010, the personal identification number will be used as a tax number and indicated on the outgoing invoices of entrepreneurs. Until then, the tax number on outgoing invoices will be the registration number assigned by the State Bureau of Statistics.

Written by: mr. sc. Marija Zuber, advisor-editor at the magazine Accounting and Finance

As of January 1, 2009, the Law on Personal Identification Number (NN No. 60/08) is in force, which introduces a personal number of eleven digits as a permanent identification mark for all legal and natural persons in Croatia. The Regulation on Personal Identification Number (NN No. 1/09) has also been published, which prescribes the form of the Certificate of Personal Number, i.e., the form of the application for the assignment of the number that will be used by legal and natural persons who, for any reason, do not receive this numerical mark during the transitional two-year period or need it before the Tax Administration assigns it ex officio.

All legal entities, just like all citizens, will receive a certificate of personal identification number from the Tax Administration at the address of their registered seat in the commercial register or in another appropriate register where data about their seat is kept during 2009. The certificate is a public document, and the assigned personal identification number of the legal entity will be a unique mark that the legal entity will use in business communication and payment of legal obligations, but only from January 1, 2010.

A year for adjustment

Only from January 1, 2010, will the personal identification number be used as a tax number and indicated on the outgoing invoices of entrepreneurs. Until then, legal entities will indicate the registration number for legal entities of seven or eight digits assigned to them by the State Bureau of Statistics as the tax number on outgoing invoices, and natural persons engaged in registered activities will indicate their citizen registration number of 13 digits as their tax number on their outgoing invoices. Throughout 2009, the deduction of input tax is allowed from incoming invoices where the previous marks, i.e., the statistical number for legal entities or the registration number for natural persons, are indicated as the tax numbers of suppliers.

Even newly established companies and other newly established legal entities will be assigned both numbers during the transitional period, both the personal identification and the previous statistical number, as the statistical number is used as the tax number during the transitional period.

The legislator’s intention is to replace the use of currently valid statistical numbers with the system of personal identification numbers from January 1, 2010. According to announcements, from January 1, 2010, the personal identification number will be used as a tax number, mandatory to be entered on all business papers, but also as a mark that is indicated on payment orders for public revenues. Until then, the system for tracking data from tax and other state authorities will be based on the previous numerical marks of legal and natural persons with the gradual introduction of the personal identification number. State authorities will keep all data in parallel during the transitional period, using both identification marks, both the previous and the newly assigned ones.

Initial phase

Starting from January 12, 2009, the Tax Administration will send a certificate of personal identification number to all business entities as well as natural persons in a specially marked envelope. The certificate contains only a few data about the legal entity and is used as a permanent public document. In the initial phase of applying the new regulations on the personal identification number, the legal entity is not obliged to indicate its personal identification number on invoices, but it can use the assigned number in business communication with other entities. The first tax returns using the new personal identification number and the first official communication with tax authorities using the personal identification number will begin on January 1, 2010. Even newly established legal entities will receive both numbers during the transitional period to ensure conditions for the functioning of the record-keeping system in the same way for new and previously established legal entities.
Only from January 1, 2010, will taxpayers be required to include the personal identification number as a mandatory content on their outgoing invoices, and the deduction of input tax will only be allowed from incoming invoices of other entrepreneurs that contain, in addition to other mandatory data, the information about their identification number as the new tax number. Until then, the received certificate should be kept as a public document. The certificate of personal number contains a minimal number of data about the natural and legal person and should only be replaced with a new one if the data indicated in it changes. In the case of legal entities, this will only happen when the legal entity changes its name, but even then, it will be issued a certificate with the same personal identification number.

Change of data

If a legal entity changes the data that is kept in public registers, for example, if it changes its seat, the competent state authorities where the data about the legal entity is kept will forward a notification to the Tax Administration to update the data about the identification number obligors. For example, a company that changes the address of its seat will notify the Commercial Court as the registration court where the data about companies is kept, and the Commercial Court will inform the Tax Administration about the change of data concerning the legal entity as the obligor of the number.

The same applies to natural persons, both citizens and natural persons engaged in registered activities. If, for example, a craftsman changes his residence address, he is obliged to report this data to the Ministry of the Interior as a change of residence, and the competent ministry will forward the data about the new address to the appropriate register of the Tax Administration for updating the data about the obligor of the number.

The certificate of personal identification number is a document that is issued only once and remains a permanent mark of the legal or natural person. A duplicate is issued only at the request of the legal entity when the original is lost or otherwise destroyed. The duplicate indicates that it is a duplicate, but the personal identification number remains unchanged. The number assigned to a specific legal or natural person will not be assigned to another entity even if that legal entity is liquidated or the natural person dies.

Indication during payments

Since personal identification numbers are assigned to both legal and natural persons, legal entities that employ workers will have to update the data about workers in their business books from January 1, 2010, by entering the personal number as the worker’s mark. Namely, on the tax cards of each natural person, which serve for the use of personal deductions as tax relief when paying income tax from employment, the data about the worker’s registration number will be replaced by the personal identification number. This task will be carried out by large employers in cooperation with the Tax Administration. Namely, data in the tax card PK may only be entered by the Tax Administration, so employers will receive the appropriate official notification about this during 2009.

Likewise, legal entities that make payments of other income to natural persons when paying income tax will indicate the citizen registration number for which they have withheld and paid income tax by deduction. Until the end of 2009, these payments are indicated with the citizen registration number, and only from January 1, 2010, will public payments be made with the indication of the personal identification number.

What you need to know

• Throughout 2009, the deduction of input tax is allowed from incoming invoices where the previous marks, i.e., the statistical number for legal entities or the registration number for natural persons, are indicated as the tax numbers of suppliers.

• Newly established companies and other newly established legal entities will be assigned both numbers during the transitional period, both the personal identification and the previous statistical number.

• In the initial phase, the legal entity is not obliged to indicate its personal identification number on invoices, but it can use the assigned number in business communication with other entities.

• From January of this year, the Tax Administration will send a certificate of personal identification number to all business entities as well as natural persons in a specially marked envelope, which contains only a few data about the legal entity and is used as a permanent public document.

• The certificate of personal number contains a minimal number of data and should only be replaced with a new one if the data indicated on the Certificate changes. In the case of legal entities, this will only happen when the company changes its name, but even then, it will be issued a certificate with the same personal identification number.

• If a legal entity changes the data that is kept in public registers, for example, its seat, the competent state authorities where the data is kept will forward a notification to the Tax Administration for updating the data.

• The certificate of personal identification number is a document that is issued only once and remains a permanent mark of the legal or natural person. A duplicate is issued only at the request of the legal entity when the original is lost or otherwise destroyed.

• The number assigned to a specific legal or natural person will not be assigned to another entity even if that legal entity is liquidated or the natural person dies.