Every tax resident receiving income from abroad must report it to the Tax Administration within eight days by submitting the so-called JOPPD form and must be registered in the tax payer registry. However, the letter from the Tax Administration also reached those who have done this properly.
In the past twenty days, many Croatian citizens (and some foreigners living in Croatia) have received a letter from the Tax Administration inviting them to contact the Tax Administration within eight days of receiving the invitation to regulate their tax status and provide documentation on income earned and taxes paid outside Croatia for the period from January 1, 2012, to December 31, 2015.
The invitation is explained as follows: ‘Dear, (…) taxpayers who begin to earn income directly from abroad are obliged to register with the Tax Administration within eight days from the date of commencement of earning the same. Furthermore, Article 62 of the Law stipulates that taxpayers, or their authorized representatives, are obliged to submit an application to the Tax Administration office competent according to their residence or usual residence for registration in the income tax payer registry for income earned outside the Republic of Croatia within eight days from the date of commencement of earning the income.’
But who will check…
I welcome and absolutely support the initiative of the Tax Administration. Namely, every tax resident must arrange their tax status and settle their tax obligations. The Croatian income tax system is structured so that for most forms of income that our residents earn in Croatia (salary, dividend, so-called other income…) the tax is calculated, withheld, and paid by the income payers on their behalf. However, residents who earn income from payers abroad – that is, do not have a domestic payer – must calculate and pay the income tax on income earned from abroad within eight days of receiving the income, along with submitting the so-called JOPPD form to the Tax Administration so that it receives the necessary data. As the Tax Administration correctly stated in its letter, before earning income from abroad, taxpayers must register in the tax payer registry. The problem is that many taxpayers, it seems, did not comply with these obligations, so the Tax Administration’s invitation is justified.
However, in this case, some things were done, to put it mildly, carelessly. Namely, letters were sent non-selectively, probably to all taxpayers for whom the Croatian Tax Administration received information from foreign tax administrations that our taxpayers earned income in those countries. Many of the individuals who received the Tax Administration’s invitation had already arranged their tax status and pay taxes in Croatia within the prescribed time. Moreover, they receive notifications from the Tax Administration via email that their JOPPD is correct.
Furthermore, all taxpayers were invited to contact the Tax Administration within eight days, and in Zagreb, everyone was invited to the Citizen Tax Office, Dubrovnik Avenue 32, rather than to the office that is competent for them according to their residence. Of course, a huge crowd formed at the Citizen Tax Office after thousands of citizens responded to the invitation in that short time, which exposed not only those taxpayers to inconveniences but also the officials.
