Content overview (newest to oldest):
- Implementation of second package of tax measures
- COVID-19 grants for working capital
- Establishment of FINA on-line portal for application of economic measures
- The new package of government measures due to COVID-19 Pandemic
- Delay in payment taxes, contributions and memberships during the special circumstances
- Implementation of measures by Croatian Agency for SMEs, Innovations and Investments (HAMAG-BICRO)
- Overview of Government measures in order to assist the economy during coronavirus epidemic
Implementation of second package of tax measures
Due to special circumstances caused by coronavirus on 9 April 2020, new provisions entered into force regulating the following:
- Deferral of VAT liability;
- Exemption from contribution liabilities for co-financed net salaries;
- VAT on donations and imports;
- Deadlines for the financial statements and other tax documentation.
DEFERRAL OF VAT LIABILITY
Through this measure, taxpayers shall pay VAT liability on a cash basis and input VAT can be recovered on paid invoices. Taxpayers submit VAT return in accordance with the regular taxation procedure and on position VIII.2. of the VAT return reports the difference of VAT assessed on the cash basis. The amount stated on position VIII.2. will be deferred until 31 July 2020. Deferral can be applied for VAT liability arising from:
- March VAT return due by 30 April 2020;
- April VAT return due by 31 May 2020; and
- First quarter (1-3) due by 30 April 2020.
If special circumstances will last longer, deferral can be extended for another three months and for second quarter (4-6).
EXEMPTION FROM CONTRIBUTION LIABILITIES FOR CO-FINANCED NET SALARIES
Employers utilizing the grant provided by the Croatian Employment Fund to support job preservation are exempted from paying contributions for supported net salaries in the amounts:
- 203,12 HRK for March per employee; and
- 250,00 HRK for April and May per employee.
Exemptions will be determined ex officio by the Tax Authorities.
VAT on donations and imports
- Donations of goods and services for the purpose of mitigation of adverse COVID-19 effects will be VAT exempt;
- Import of goods for the purpose of mitigation of adverse COVID-19 effects will be exempt of customs and import VAT;
- On import VAT reverse charge mechanism applies.
DEADLINES FOR THE FINANCIAL STATEMENTS AND OTHER TAX DOCUMENTATION
|Corporate Tax Return and related forms and accompanying report||30 June 2020|
|Financial statements for statistical purposes||30 June 2020|
|Statement of inactivity||30 June 2020|
|Financial statements for public announcement purposes||31 August 2020, that is, 8 months from the last day of the business year|
|Annual report (medium and small companies)|
|CONSOLIDATED FINANCIAL STATEMENTS|
|Consolidated financial statements for public announcement, annual report, and audit report||31 October 2020, that is, 10 months from the last day of the business year|
COVID-19 grants for working capital
In addition to already established measures, agency HAMAG-BICRO has activated new financial instrument, COVID-19 grants for working capital in order to support the economy during corona virus pandemic. The applicant must prove that COVID-19 had a negative impact on his business, i.e. that in the first quarter of year 2020 the company achieved a revenue decrease of more than 20%, or that the company expects such revenue decrease in the following quarters of year 2020.
Grants are for the purpose of financing working capital, including VAT. Grants are not for the purpose of refinancing existing loans/lease obligations or to finance liabilities incurred before year 2020. Funds received must be strictly used for its purpose. The user of the grant shall not pay any fee related to the grant approval.
What are requirements for grant obtaining?
- More than 50% of private ownership,
- At least one full-time employee,
- The company does not have giro account permanently blocked for more than 30 days in the last 6 months, and
- The company does not have difficulties in conducting its business.
Which terms are defined with the grant?
|Name of the program||„COVID-19“ grants for working capital|
|Target group||Small, micro and medium sized businesses|
|Amount||Up to 750 000 HRK|
|Expiration date||6 months|
|Grace period||Up to 12 months presuming repayment period is at least 2 years|
|Repayment period||Up to 5 years including grace period|
|Insurance||Debenture bond of the applicant|
How to apply for the grant?
Applications can be submitted by post, e-mail, through online system or personally addressed to the address of HAMAG-BICRO.
Which documentation is required?
The list of documentation required for the application is available on the following link: https://hamagbicro.hr/wp-content/uploads/2020/04/Popis-dokumentacije-COVID19-zajam-za-OBS.pdf
What is the deadline for the application?
The Program shall be available until the utilization of the funds; however, no later than 31 December 2020.
Establishment of FINA on-line portal for application of economic measures
We inform you that starting 31 March 2020, FINA has established a unique portal MJERE based on which all economic subjects in the Republic of Croatia which business activities are affected due to COVID-19 pandemic can apply for Government measures in order to keep their liquidity and economic activities.
Stated measures relate to the following:
- liquidity and working capital loans;
- payment delay; and
- loan reprogramming.
Companies which activities are affected or disabled due to epidemic can apply for the above-stated measures.
Applying through the portal MJERE does not mean automatic granting of loans. Namely, the system collects applications and after verifying the entered data, the system is sending applications to the banks. Each bank will contact the applicant and take over the further process of granting the loans.
Currently is available application for measure liquidity and working capital loans only. Soon is expected that applications for the following measures will be available also: payment delay and loan reprogramming.
During the application for liquidity and working capital loans, the applicant will need to:
- register into the system;
- enter data on the subject for which the loan is requested;
- choose a credit institution;
- fill out the following forms:
- a statement of estimated reduction of revenues in the year 2020 in comparison to the year 2019;
- a statement of revenues decrease in the first quarter of the year 2020 in comparison to the year 2019; and
- the estimated amount of loan required.
In the next few days, the portal will provide the possibility to enter other necessary data for the banks in order to evaluate applications for all three measures.
The new package of government measures due to COVID-19 Pandemic
Croatian Prime Minister Mr. Andrej Plenković announced today a new package of measures to support the economy due to COVID-19 epidemic. The announced measures are expected to be adopted in tomorrow’s Government session. It is not expected that the proposed measures will be substantially changed in the process. CONFIDA has prepared a brief overview of the most significant measures which we would like to share with you.
Grants for preserving workplaces
The measure proposed by the Government is to increase the support of HRK 3.250 for March to HRK 4.000 for April and May. In addition, the state will take over the burden of social security contributions for the previously stated amount. Accordingly, the total support would amount to HRK 5.460 per employee, provided that the employer retains his employees.
The second measure is for closed companies or companies which business is affected
- Companies with revenues less than HRK 7,5 mil
Those with a drop in income between 20% – 50% are entitled to a payment delay as well as payments in instalments, interest free. Those with a drop in income more than 50% will be completely exempted from tax obligations.
- Companies with revenues more than HRK 7,5 mil
Those with a drop in income between 20% – 50% are entitled to a payment delay as well as payments in instalments, interest-free. Those with a drop in income more than 50% will be exempted from tax obligations in the proportion of the fall in income for April, May and June.
Example: Company that has a 75% drop in income will pay tax obligations only for 25% of their income.
Value-added tax (VAT)
The obligation to pay VAT will be delayed until invoices have been paid. This measure will now apply to all entrepreneurs.
Among other measures, the Prime Minister pointed out that the deadline for submission of 2019 financial statements is postponed to 30 June 2020.
Delay in payment taxes, contributions and memberships during the special circumstances
(Addition to point 1 in the table below)
Starting today, entrepreneurs whose economic activities are disturbed due to the state of emergency may file a Request for delay of payment taxes to the Croatian Tax Authorities.
The Request shall be submitted through ePorezna system or through the web form. On the date of submission, the taxpayer must have:
- all tax returns filed; and
- all liabilities settled.
Together with the Request, the taxpayer must prove the inability to pay taxes. Namely, the taxpayer must enclose the data related to the decrease in the turnover of the previous month for at least 20% in comparison to the same month last year or explain why the decline in turnover is expected in the following three months for at least 20%.
Following the submission of the Request, the Tax Authorities will inform the taxpayer if their Request was accepted. By accepting the Request, the taxpayer is still obliged to submit all tax returns within the legal deadline, however, Tax Authorities will delay the taxpayer´ payments for three months.
One Request shall be submitted for the delay of payment of all tax liabilities (contributions, memberships etc.)
The right to delay tax liability cannot be achieved for the February VAT liability, which is due on 31 March 2020. Only entrepreneurs who have revenues up to 7,5 million HRK have the right to delay VAT, provided they calculate taxes according to issued invoices.
If upon maturity of the first delayed liability, the taxpayer is still not able to settle the tax liabilities, he can submit an additional Request for payment in installments.
Implementation of measures by Croatian Agency for SMEs, Innovations and Investments (HAMAG-BICRO)
(Addition to points 12 and 30 in the table below)
Following the epidemic caused by virus COVID-19, HAMAG-BICRO is introducing their first measure of suspension of loan payments for rural development until 31 December 2020 without penalty interest. Suspension of payments applies to both principal and interest, while previous debts still need to be settled. Beneficiaries of ESIF and loans for rural development will be notified with an e-mail regarding payment delay and will be provided with a form “Pristanak na odgodu plaćanja“. All beneficiaries who agree to the proposed payment delay should fill out the form, sign/stamp and photograph/scan it to the following e-mail address firstname.lastname@example.org in order to record their consent in the system.
A second HAMAG-BICRO measure has been activated yesterday and is related to enabling small and micro economic entities to apply for an ESIF working capital loan which allows financing of:
- preparation of production,
- raw materials,
- other productions costs,
- staff costs,
- employment costs,
- rental space,
- utility costs and
The maximum amount of ESIF loan can be EUR 25 000 with a 12 month of grace period, repayment period of 3 years with an interest rate of 0,5% – 1,0% (depending on the development index).
A list of documentation as well as a standardized loan application form is available on the HAMAG-BICRO official website https://hamagbicro.hr/financijski-instrumenti/kako-do-zajma/dokumentacija/.
Overview of Government measures in order to assist the economy during coronavirus epidemic
The Government of the Republic of Croatia has adopted 63 measures to mitigate the effects of the coronavirus epidemic. These measures are defined as the first phase of this process.
|MINISTRY OF FINANCE|
|1.||Delay and/or repayment of public contributions in instalments.|
|2.||Interest free loans to municipalities, cities and counties, Croatian Health Insurance Fund and Croatian Pension Insurance Fund up to the amount of personal income tax, surtax and contributions which payment will be delayed and/or will be repaid in instalments.|
|Croatian Bank for Reconstruction and Development (HBOR)|
|3.||Introducing a moratorium on clients’ credit obligations under existing placements.|
|4.||Reprogramming of existing loans for HBOR clients with introduction of grace period in repayment of the loan principal.|
|5.||Approval of new liquidity loans to entrepreneurs for financing wages, utility costs and other operating expenses, so called cold operation (excluding credit obligations to commercial banks and other financial institutions) in cooperation with commercial banks.|
|6.||Approval of guarantees (insurance policy) to commercial banks of exporters and HBOR under the guarantee fund for export security with aim of granting new loans for working capital – liquidity.|
|7.||Increasing the scope of guarantee fund for export security by including the tourism sector with the aim of issuance of guarantee (insurance policy) for loans to commercial banks and HBOR, for additional liquidity for exporter and tourism sector.|
|8.||Increasing the scope of guarantee fund for export security by further expanding the circle of eligible users of insurance policies to economic subjects who are handling export or are suppliers of exporters.|
|Commercial banks – support measures|
|9.||Introduction of Stand still measure i.e. suspension of all executions of enforcement procedure towards all debtors (legal or physical persons) for a period of three months.|
|10.||Loans up to three years for liquidity and working capital (wages and operating expenses) excluding credit obligations to commercial banks and other financial institutions.|
|11.||Reprograming by credit institutions towards specific clients by expedited procedure without reclassification into the status of noncomplying liabilities.|
|II. MINISTRY OF REGIONAL DEVELOPMENT AND EUROPEIAN FUNDS|
|12.||Increasing the allocation for financial instrument ‘ESIF micro loans’ for working capital of micro and small enterprises (1000-25.000 EUR, 12 months grace period, reduction of interest to 0,5% – 0,75% – 1,0% depending on the development index) which are processed by HAMAG-BICRO.|
|13.||Reduction of interest rates for investments loans with stake of 30% of working capital ‘ESIF micro and small loans’ to 0,1 %-0,25%-0,5% depending on the development index which are processed by HAMAG-BICRO.|
|14.||Increasing the maximum guarantee rate for ‘ESIF individual guarantees’ for loans for working capital from 65% to 80% of loan principal (the amount of loans 150.000-1.000.000 EUR) which are processed by HAMAG-BICRO through 17 financial institutions.|
|15.||Unconditional extension of duration of project with deadline in March, April and May 2020., as well as the obligations for repayment of funds with deadline in March, April and May for additional 90 days – for all projects co-financed from the Operational Program of Competitiveness and Cohesion which are in process of implementation.|
|16.||Confirmation of 75% of claimed expenditure from the Operational programs of competitiveness and cohesion through the Payment Request and the other 25% after conducting of control of expenditures in the relevant procurement of work/goods and/or services and bringing a decision about nonexistence of irregularities as a basis for keeping 25% of the amount.|
|17.||Introducing new financial instrument „COVID-19 loans“ for working capital for small and medium entrepreneurs.|
|III. MINISTRY OF LABOUR AND PENSION FUND|
|18.||Grants for securing jobs in sectors most affected with coronavirus.|
|19.||Temporarily suspension of grants for self-employment and employment with aim of securing liquidity for jobs in sectors affected by coronavirus.|
|20.||Extension of permanent season measure.|
|21.||Ensuring payment of minimum wage for persons with disabilities in order to retain them in employment.|
|22.||Delay of payment of financial compensation for all employers who are obliged to meet the quota for persons with disabilities.|
|23.||Allowing EU grants beneficiaries, the possibilities to suspend or delay project implementation, delay of refund payments and consideration of reduced implementation of planned indicators on projects due to new circumstances.|
|24.||Unconditional extension of duration of projects for three months – for all projects co-financed from the Operational program of Effective Human Resources which are in process of implementation with deadline in March, April and May 2020.|
|25.||Confirmation of 75% of claimed expenditure from the Operational programs of Effective Human Resources through the Payment Request and the other 25% after conducting of control of expenditures in the relevant procurement of work/goods and/or services and bringing a decision about nonexistence of irregularities as a basis for keeping 25% of the amount.|
|IV. MINISTRY OF ECONOMY, ENTREPRENEURSHIP AND CRAFTS|
|26.||Introducing an additional grace period for the obligation to preserve jobs without losing rights to receive support measures related to realization of investment projects which are being conducted in accordance with Investment Promotion Act.|
|27.||Possibility of emergency purchase of surpluses in:
– animal husbandry, stationery and processing into durable and semi-durable food products (meat cans or deep freezing and storing),
– crop farming, storing and processing into semi-durable food products (vegetable oils, sugars, flours etc.),- fruit and vegetable farming, storing in conditioning warehouses and processing into semi-durable food products and fruit drinks (juices, jams, canned fruits and vegetables etc.).
|28.||Interventional purchase of:
– disinfectants, soaps and detergents, disinfectants for closed space, hospitals and other institutions and protective equipment needed for coronavirus stabilization,
– other products from potential endangered industrial and agricultural producers and their inclusion in the balance sheet for strategic supplies.
|29.||Procurement of seeds for agricultural production in case of shortage in accordance with request from the Ministry of agriculture.|
|Croatian Small Business Agency, innovation and investment (HAMAG-BICRO)|
|30.||Moratorium on all instalments of ‘ESIF micro and small loans’ and micro and small loans for rural development up to 31 December 2020 with prolongation of loan payment of the guarantee loans.|
|31.||Establishment of new financial instrument Micro loans for rural development for working capital (quicker processing, grace period, reduced interest rate).|
|32.||Contra guarantee of 50% principal for working capital of loans for tourism (interest rate 0,5%-0,75%-1,0%).|
|V. MINISTRY OF TOURISM|
|33.||Delay in payment of tourism membership fee for economic subjects and private renters.|
|34.||Delay in payment of tourism membership fee for private renters (lump sum taxation).|
|35.||Restriction of working hours for catering facilities.|
|36.||Grants for programs of financing working capital and increasing of liquidity for vulnerable economic subjects in tourism.|
|37.||Delay of payment of the concession fee on tourist land in camps.|
|VI. MINISTRY OF AGRICULTURE|
|38.||Implementation of an additional flexibility mechanism between funds to increase production related payments or introduce intervention measures (Agriculture program) with the prior approval of the European Commission.|
|39.||Assistance to the agricultural sector due to traffic restrictions and increased handling costs (proposing a new state and small value programs).|
|40.||Financing the temporary fishing suspension with the prior approval of the European Commission.|
|41.||An increase in small value grants for the fisheries and aquaculture sector.|
|42.||Financing of packaging for fishery products with the prior approval from the European Commission.|
|43.||Delay of the liability payment deadline to Hrvatske šume d.o.o. for wood assortments – wood processing and furniture production.|
|44.||Delay of the deadline for contractual obligations for beneficiaries of all investment measures of the rural development programs.|
|45.||Delay of the deadline of contractual obligations related to 2019 small value grants – wood processing and furniture production.|
|46.||Establishment of credit lines for working capital for the agriculture and forestry sector and wood processing.|
|47.||Delay in payment of rent and concession fees for agricultural land owned by the Republic of Croatia.|
|48.||Delay in payment of fees for concessions and mooring of vessels in fishing.|
|VII. MINISTRY OF CULTURE|
|49.||Grants to self-employed artists, self-employed legal and physical persons in cultural and creative industry.|
|50.||Delay of obligation fulfilment for physical and legal subjects in culture for realization of programs towards Ministry of culture, Croatian Audio-visual Centre and fund Culture Nova.|
|51.||Recognizing the organizational costs in culture approved programs which are cancelled due to epidemic of coronavirus.|
|52.||Securing of funds for legal and physical persons in culture for extended period for approved projects in culture.|
|53.||Temporary suspension of revision of independent artist status for a period of six month.|
|54.||Payments from the fund for promotion of media pluralism for year 2020 with possibility of conversion part of the fund for public monitoring of coronavirus epidemic.|
|VIII. MINISTRY OF MARITIME AFFAIRS, TRANSPORT AND INFRASTUCTURE|
|55.||Derogation from the universal service obligations due to inability to comply with the Postal Services Act.|
|56.||Temporary suspension of fees for off-road licences for public roads in the period until 1 June 2020.|
|57.||Amendment of the prescribed length of motorway patrol section to allow motorway patrols to be performed once in 12 hours all days in a week (fewer patrols).|
|58.||Temporary postponement of seasonal toll 10% increase for IA vehicles, I and II group in the period from 15 June to 15 September.|
|59.||Temporary extension of seasonal „winter“ ENC discount (which will expire on 31 March) until 1 June 2020.|
|60.||Additional discount of 7% for EURO VI vehicles for III and IV group which are using ENC with delayed payment with credit card/oil card during the year.|
|61.||Delayed application of new Regulations on boats, vessels and yachts with regard to equipment requirements.|
|62.||Temporary extension of validity of certifications and other documentation in international and national navigation.|
|63.||Recommendation to port authorities to delay the payment of the fixed part of concession fees and fees for using operational coats in ports open for public transport.|