The Amendments to the Accounting Act

The Official Gazette No. 82 published the Law on Amendments to the Accounting Act on July 20, 2023. On July 28, 2023, some provisions of this Act came into force, while the rest will take effect from January 1, 2024.

What Act prescribes?

The Act prescribes the content of reports on corporate income tax information, mandates the use of a specific currency, sets the deadline for publication and public accessibility, defines the responsibilities of management bodies, and outlines the role of an authorized auditor in controlling the preparation of reports on corporate income tax information.

The entities required to disclose income tax information

The entities required to declare income tax information are ultimate parent companies whose consolidated revenue for the last two consecutive financial years exceeds 750,000,000.00 euros, as independent taxpayers whose revenue exceeds the same amount.

When does the disclosure obligation end? 

The obligation to disclose ceases when the total consolidated revenue is at most 750,000,000.00 euros.

The obligation to disclose income tax information does not apply to a sole trader or ultimate parent company and their related companies if such companies, including their branches, have a business residence, permanent establishment, or permanent business activity only within the territory of the Republic of Croatia and in no other tax jurisdiction.

Companies must disclose income tax information to the public within 12 months from the balance sheet date for the financial year.

Amendments to the Act

The amendments to the Act remove the term “sole trader” and consider as a financial year any reporting periods shorter than 12 consecutive calendar months if they result from the cessation of business under an expedited procedure without liquidation, to align with the provisions of the Act regulating commercial companies.

Furthermore, the Act prescribes that a parent company can apply International Financial Reporting Standards if all its independent companies apply them.

The Financial Reporting Standards Board also increases the number of members from nine to eleven. It is obligated to develop a separate Croatian Financial Reporting Standard for entrepreneurs in bankruptcy and liquidation within 12 months from the effective date of the Law.

You can access all amendments to the Accounting Act through the following link.