Current issues with respect to Corporate Profit Tax compliance in 2020, including impact of Covid-19 pandemic

The aim of the seminar was to inform about current issues with respect to corporate profit taxation in 2020 (based on the previous round of the tax reform), the impact of the COVID-19 pandemic on corporate profit tax position of companies, and novelties that await in 2021 based on the next announced round of the tax reform.

In order to achieve certain priorities, the Program of the Government of the Republic of Croatia 2020-2024 envisages special measures for economic recovery and business environment.

From the perspective of the tax system, goals have been set to reduce tax burden for the economy in order to create and further enhance a stimulating and competitive business environment, as well as to take measures for economic recovery in light of the COVID-19 pandemic.

Topics that were discussed:

• Tax treatment of aid received on the basis of COVID-19 measures - how to report the received aid in the corporate profit tax return in 2020? What do you need to look out for to ensure that all the conditions are met and no measures are revoked?
• Corporate profit tax advance payments in 2020 - is it possible to reduce the advance payments and how as well as in what circumstances does it happen automatically (ex officio)?
• The negative impact of the COVID-19 pandemic on the companies' operations in 2020 - how to treat possible adjustments that may occur due to business disruptions (so called transfer pricing adjustments - impact from the perspective of corporate profit tax and VAT)? Has your company had any extraordinary transactions as a result of the pandemic?
• Other issues related to the preparation of income tax returns for 2020 - among other things, the impact of the anti-tax avoidance rules (earning stripping rule, rule on controlled foreign companies, hybrid mismatches, etc.)
• Changes in corporate profit taxation in 2021 - reduction of the rate of corporate profit tax and withholding tax on certain types of payments abroad, etc.
• Practical experiences and other current events - related to corporate profit taxation.

The webinar was held by Tomislav Borošak, Director in the tax department, KPMG Croatia and Bojan Đukić, Manager in the tax department, KPMG Croatia.

The recording of the webinar is available on the link.