Lecturer: Miljen Matijašević G10, room 6/I, Tue 11:30-12:30 e-mail: [email protected]@gmail.com Session 7, 29 Apr 2014.

English for Tax Administration 2

Lecturer: Miljen MatijaševićG10, room 6/I, Tue 11:30-12:30

e-mail: [email protected]

Session 7, 29 Apr 2014

Today’s Session

1. Revision questions and exercises

2. Indirect Taxation – Value Added Tax

RevisionVocabulary exercises

Translate into English porez na dodanu vrijednost (PDV) porez na dohodak porez na dobit trošarine porez na promet nekretnina porez na premije automobilskog osiguranja porez na motorna vozila porez na korištenje javnih površina porez na kuće za odmor prirez

Translate into English porez na potrošnju porez na nasljedstva i darove porez na tvrtku ili naziv porez na automate za zabavne igre porezi na dobitke od igara na sreću

consumption tax inheritance and gift tax

trading name tax slot-machine tax

tax on gains of the games of chance

estimate – deem – ensue – detriment - shamobtain - disclose – liability – statute

1. Tax authorities must assess taxes with equal diligence, whether it is to the benefit or the ________ of the taxpayer.

2. A ________ transaction usually conceals an illegal transaction.

3. An old unpaid tax debt can become subject to the ________ of limitations.

4. If the taxpayer fails to provide necessary information and evidence, the taxable base and ultimately the tax ________ are ________.

5. The law imposes an obligation on tax authorities not to ________ any personal information ________ in the tax procedure. This provision shall not be ________ violated if the taxpayer has consented to the publication of such information.

estimate – deem – ensue – detriment - shamobtain - disclose – liability – statute

1. Tax authorities must assess taxes with equal diligence, whether it is to the benefit or the DETRIMENT of the taxpayer.

2. A SHAM transaction usually conceals an illegal transaction.3. An old unpaid tax debt can become subject to the STATUTE

of limitations.4. If the taxpayer fails to provide necessary information and

evidence, the taxable base and ultimately the tax LIABILITY are ESTIMATED.

5. The law imposes an obligation on tax authorities not to DISCLOSE any personal information OBTAINED in the tax procedure. This provision shall not be DEEMED violated if the taxpayer has consented to the publication of such information.

Translate into English1. Porezna tijela dužna su poticati porezne

obveznike da predaju porezne prijave.2. Trgovačka društva dužna su voditi poslovne

knjige i evidencije.3. Povrat poreza moguć je za iznose veće od

1.000 Kn.4. Sud je naredio privremenu zabranu

obavljanja djelatnosti.5. Porezni dug je otpisan budući da dužnik

nema nikakve imovine.6. Prisilna naplata vrši se zaplijenom imovine.

Translate into English

1. Tax authorities must encourage taxpayers to file tax returns.

2. Companies must keep books and records.3. A tax refund is possible for amounts

exceeding HRK 1,000.4. The court imposed a temporary ban of

business activities.5. The tax debt was written off as the tax

debtor owns no property.6. Forcible payment is carried out by seizure of

property.

Indirect Taxation

Value Added TaxUnit 4

Value Added Tax

Levied at each stage of the production and distribution process

Input tax deductible from the output tax

◦ INPUT TAX – pretporez◦ OUTPUT TAX – izlazni porez

Taxable persons

1. Individuals

2. Legal persons engaged in taxable activities

Taxpayers whose supplies equalled more than HRK 230,000 must enter the VAT system

Taxable persons

E.g.◦ Importers and exporters of goods◦ Entrepreneurs receiving services from a non-

resident◦ Anyone performing business activities if non-

taxation of such activities would lead to unfair competition

Taxable transactions

Taxable transactions include

1. Supply of goods and services for consideration within Croatia

2. Self-supply of goods and services

3. Importation of goods

Taxable transactions

Self-supply:

◦ use of own business services for private needs

◦ business entertainment expenses

◦ use of personal vehicles (if not deductible from personal income tax or profits for tax purposes)

Taxable transactions Taxable transactions also include:

Supply of goods and services by legal entities for the benefit of the shareholders and members of immediate family for no consideration or with a personal discount

Any supply free of charge or at a personal discount, irrespective of who the recipient is

Taxable Amount (base) The sales price of goods and services

supplied, including costs of transportation, insurance and packaging

For imports – customs value + customs duties and other charges and special taxes payable in the course of customs clearance

For reimported goods (exported and processed abroad) – the consideration for the processing or increase in value of the goods

VAT Rates

The standard rate: 25 %

Reduced rates: 13 % and 5 %

Non-residents Non-resident entrepreneurs engaged in

taxable transactions in Croatia - subject to the same taxation rules as residents

Other non-residents (non-EU citizens) can claim a refund of VAT on goods purchased in excess of HRK 500

Deadline for the refund: 6 months from the date of invoice

Key vocabulary

input taxoutput taxdeductiblelegal entity

taxable activitynon-resident

taxable personto be exempt from

taxable transactionsupply of goods or

servicesconsiderationfree of chargecustoms duty

customs clearanceprocessing (of goods)

Practice

Do the exercises on p. 15 in your coursebook

Thank you for your attention!