Overview of the Changes Brought By The Euro Introduction: Financial And Tax Reporting

The beginning of 2023 marked Croatia’s entry into the eurozone, and the official currency is the euro. There are numerous changes in the economy, finance and accounting, and the question of changes related to financial and tax reporting appeared.

BD Group brings the most crucial financial and tax information for reporting in 2023. 

Annual financial reports

One of the doubts after the euro introduction is the currency to which entrepreneurs submit their annual financial reports. For 2022, they must submit financial statements in kuna.

In addition, entrepreneurs whose business year is the same as the calendar year also prepare and submit annual financial reports in kuna so that they can be published. Unlike them, entrepreneurs whose business year differs from the calendar year and ends after January 1, 2023, submit reports in euros.

Transfer of accounting balances

The euro introduction led to a specific situation for accounting balances transfer from 2022 to 2023. The accounting balances, stated in kuna currency on December 31, 2022, must be converted into euros by the rules for conversion and rounding, and entrepreneurs present the value in euros.  

Income tax report

The tax declaration and other public benefits for accounting periods that end before the day of the euro introduction, taxpayers submit in kuna. Accordingly, taxpayers whose tax period for 2022 is the same as the calendar year gives in their income tax returns in kuna.

Taxpayers whose tax period ends after the euro introduction submit their tax returns and other forms and reports in euros.

Income payment

Net income payments from 2023 and income tax obligations, tax surcharges and contributions are calculated and paid in euros.

Tax payments

From the beginning of 2023, taxpayers paid tax obligations in euros. If the original amount is in kuna, it must recalculate according to the fixed conversion rate.