Possible developments in tax arena - · 2019-09-25 · Possible developments in tax arena Hrvoje Šimović Summer School ^Trends in international taxation _ University of Dubrovnik

Possible developments in tax arena

Hrvoje Šimović

Summer School“Trends in international taxation”

University of Dubrovnik September 13, 2018

This work has been supported by the Croatian Science Foundation under project Public Finance Sustainability on the path to the Monetary Union (IP-2016-06-4609)

Content

1. Tax structure and tax burden (EU vs. CEE vs. Croatia)

2. Developments in VAT

3. Developments in labor (PIT and Social contributions)

4. Developments in CIT

5. Developments in capital taxation

6. Conclusion

Workshop assignment: discussion questions and proposal of possible changes in tax system

Tax structure and tax burden EU vs. CEE vs. Croatia

CEE: Bulgaria, Czech Republic, Croatia, Hungary, Poland, Romania, Slovenia, Slovakia

Overall tax revenues in EU levelled off…

Source: European Commission (2018).

30

32

34

36

38

40

42

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Total taxes (including social contributions) as % of GDP

EU-28 EA-19 CEE Croatia

Tax to GDP increases in 19 MS (6 CEE)

-2,50

-2,00

-1,50

-1,00

-0,50

0,00

0,50

1,00

1,50

2,00

2,50

Change in tax revenue to GDP, 2015-16 (pp)


CEE region below EU average, Croatia above CEE average

0

5

10

15

20

25

30

35

40

45

Romania Bulgaria Slovakia Poland Czech Republic Slovenia Croatia Hungary CEE EU

Total taxes (including social contributions) as % of GDP (2016)


Tax burden vs. Economic development

Romania

Bulgaria

SlovakiaPoland

Czech R.Slovenia

CroatiaHungary

20

25

30

35

40

45

40 45 50 55 60 65 70 75 80 85 90

Tax

bu

rden

, % G

DP

BDP per capita in PPS (EU 28=100)

Source: author.

Tax structure by economic functions variate a lot… consumption taxes dominate in Croatia


0

5

10

15

20

25

30

35

40

45

50

IE RO

BG LT LV SK MT ES PL

CY

CEE U

K PT EE CZ SI HR

LU

EU-2

8 EL NL

DE

HU

EA-1

9 AT IT SE FI BE

FR DK

Structure of total taxation, % GDP (2016)

Consumption Labour Capital

0

2

4

6

8

10

12

14

16

18

20

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Tax structure in Croatia 2004-16, % GDP


0

5

10

15

20

25


EU vs. Croatia vs. CEE (2016)

EU-28 HR CEE

Croatia is champion in taxing consumption, while taxing capital at low-level…

0

2

4

6

8

10

12

14

16

18

20

IE ES LU SK DE

BE

RO

EA-1

9 UK

EU-2

8 FR IT LT NL

AT PL

CZ

MT SE PT

CY

LV

CEE SI DK FI EE EL BG

HU

HR

Consumption (% GDP, 2016)

0

5

10

15

20

25

30

BG IE RO

MT

CY

UK PL

LV LT HR PT

CEE EL ES EE SK LU C

Z

HU SI

EU-2

8

NL

EA-1

9 IT DE FI BE

DK

AT

FR SE

Labour (% GDP, 2016)

0

2

4

6

8

10

12

14

EE LV LT SI BG

HR SK RO

CEE C

Z

HU IE SE DE

NL

AT FI PT ES

EU-2

8

EA-1

9 DK

CY PL EL MT

UK IT BE

FR LU

Capital (% GDP, 2016


Croatia and CCE countries have same trend although…

0

2

4

6

8

10

12

14

16

18

20

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Consumption

EU HR CEE

0

5

10

15

20

25

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Labour

EU HR CEE

0

1

2

3

4

5

6

7

8

9

10

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Capital

EU HR CEESource: European Commission (2018).

…there are differences in level of taxation and developments between CEE countries

8

10

12

14

16

18

20

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Consumption

7

9

11

13

15

17

19

21

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Labour

3

4

5

6

7

8

9

10

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Capital

CEE

Croatia

Bulgaria

Czech Republic

Hungary

Poland

Romania

Slovenia

SlovakiaSource: European

Commission (2018).

Theoretical framework

Taxes and economic growth

Efficiency Equity

• Market distortions• Deadweight loss• Incentives

• Economic inequality• Redistribution

Relation between tax burden and economic growth is clear

R² = 0,3927

-0,5%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

3,5%

4,0%

4,5%

25,0 30,0 35,0 40,0 45,0 50,0

CA

GR

rea

lBD

P

Total tax burden

Source: author.

Different aspect of efficiency (empirical literature)

Taxation

DistortionaryNon-

distortionary

• Taxation on income and profit • Social security contributions • Taxation on payroll and manpower • Taxation on property

• Taxation on goods and services

Source: Kneller, Bleaney & Gemmell (1999).

„Light” empirical testing (EU)

R² = 0,0183

R² = 0,2595

-0,5%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

3,5%

4,0%

4,5%

7,0 9,0 11,0 13,0 15,0 17,0 19,0 21,0 23,0 25,0 27,0

CA

GR

rea

lBD

P

Taxes in GDP

Taxes on consumptionPIT and Social security contributions

Source: author.

Developments in VATEU trends in consumption taxation and Croatian perspective

Domination of VAT among consumption taxes…Croatia among highest?

Decomposition of the ITR on consumption 2016


IPSC=𝑡𝑎𝑥𝑒𝑠 𝑜𝑛 𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛

𝐹𝑖𝑛𝑎𝑙 𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑜𝑓 ℎ𝑜𝑢𝑠𝑒ℎ𝑜𝑙𝑑𝑠

In Croatia higher pressure in VAT burden than other consumption taxes (ITR)

Source: MFIN & author.

0

5

10

15

20

25

30

35

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Decomposition of the ITR on consumption (Croatia)

VAT component Tobacco and alcohol component Energy component Residual

Standard VAT rate in Croatia above EU average… stability of average VAT standard rate in EU after crisis

15

17

19

21

23

25

27

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Standard VAT rate

HR EU-28 EA-19


Frequent changes and rise of VAT standardrates during crisis period

0

1

2

3

4

5

6

7

8

BE

BG

DK

DE

FR LU MT

AT SI SE PL

SK CZ

EE IE IT NL FI UK

HR CY

LV LT PT EL ES RO

HU

VAT standard rates change (% points 2008-13)


1

4

1 1

2

0

1

0

5

9

5 5

6

3

1

0

1

0

-4

-2

0

2

4

6

8

10

y-o-y changes in standard VAT rates

Number of rate rise Number of rate fall

VAT rates in EU (January 1, 2018.)Member State Super Reduced Reduced Standard rate Parking rate Zero rate

Belgium 6 / 12 21 12 Yes

Denmark 25 Yes

Germany 7 19

Finland 10 / 14 24 Yes

France 2,1 5,5 /10 20

Greece 6 / 13 24

Ireland 4,8 9 / 13,5 23 13,5 Yes

Italy 4 5 /10 22

Luxembourg 3 8 17 14

Netherlands 6 21

Austria 10 / 13 20 13

Portugal 6 / 13 23 13

Sweden 6 / 12 25 Yes

Spain 4 10 21

UK 5 20 Yes

Czech R. 10 / 15 21

Estonia 9 20

Cyprus 5 / 9 19

Latvia 12 21

Lithuania 5 / 9 21

Hungary 5 / 18 27

Malta 5 / 7 18 Yes

Poland 5 / 8 23

Slovenia 9,5 22

Slovakia 10 20

Bulgaria 9 20

Romania 5 / 9 19

Croatia 5 / 13 25Source: European Commission (2018).

Reduced rates development in Croatia like in EU

0

5

10

15

20

25

30

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

VAT rates in Croatia

Standard Reduced Zero-Reduced 2

Source: MFIN.

Developments

• 1998 – introduction• Focused on EU and general tax

reform form 1994• Single rate 22%• Threshold 85.000 HRK

• 1999 (September)• Zero rate (milk, bread,

books…)• 2000 – scientific journals

• 2006• 10% Reduced rate for several

tourist services • Newspapers in 2007

• 2009 • Standard rate 23%

• 2012• Standard rate 25%

• 2013• Zero rate to 5% reduced rate

(EU) and some changes in 10% rate

• Threshold 230.000 HRK

• 2014• Form 10% to 13%

• 2017• Changes in reduces rates• Threshold 300.000HRK from

2018

VAT is the most important revenue in Croatia...and cyclicly dependant (Tax base vs. Tax revenue)

Source: DZS & MFIN (2018).

-200

-100

0

100

200

300

400

500

600

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

GDP (expenditure approach, nominal)

Households Government Investments

Exports Imports Total

40

60

80

100

120

140

160

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

GDP (expenditure approach, 2008=100)

Households Government Investments

Exports Imports Total

100

120

140

160

180

200

220

20

25

30

35

40

45

50

Consumption vs. VAT

VAT C

0

20

40

60

80

100

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

VAT vs. trend

VAT VAT trend

Beside tax base (consumption), tax rates are also relevant…and other determinants

-15,0%

-10,0%

-5,0%

0,0%

5,0%

10,0%

15,0%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

GDP, VAT & private consumption (y/y, %)

VAT C GDP

VAT rate 23%

VAT rate 25%

Reduced rate form 10% to

13%

EU Accession (Imports lag effect) (-)&

Cash payment fiscalisation Act (+)

Source: DZS, MFIN & author.

Efficiency of VAT is also key determinant…

• Changes in VAT revenue can be attributed to: a) changes in the share of consumption in GDP,

b) changes in the VAT rates,

c) changes in the C-efficiency ratio (CER)

• R - total amount of VAT revenues,

• FC - final household consumption

• r - standard VAT rate

C-efficiency ratio

𝐶𝐸𝑅 =𝑅

𝐹𝐶 ∗ 𝑟∗ 100

Croatia have high level of VAT efficiency… efficiency is decreasing during crisis

74

76

78

80

82

84

86

88

90

92

94

C-efficency

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

Decomposition of VAT revenue changes (in %)

C-efficency Consumption Rate VAT

• efficiency increase increase in 2014 (revenues are increasing faster than consumption)

• High VAT rate and „Fiscalisation” (positive effects)• But reduced rates and exemptions (negative effects)• Consumption trends (mostly neutral)

Source: DZS, MFIN & author.

Fiscal effects of VAT… reducing standard rate or/and aborting reduced rates?

0

1

2

3

4

5

6

15

17

19

21

23

25

27

Potential VAT rate

Standard rate Potential rate Residual (right)

0

1

1

2

2

3

3

Lost VAT revenues (billion HRK)

Reduced rate 10% or 13% (from 2014)

Zero rate (till 2012) or reduced rate 5% (from 2012)

Source: author.

VAT threshold & Exemptions

• Small Entrepreneurs (VAT threshold)• Threshold HRK 300.000 HRK (40.000 EUR)

• Before 2018 it was 230.000 HRK (over 30.000 EUR)• Before 2013 it was 85,000 HRK (over 11.000 EUR)

• desires to increase tax revenue vs. reduce administration and compliance costs, and minimize the distortions

• Standard VAT issues following supplies of public interest: • postal services,• medical diagnostics, medical care etc.,• supply of services and goods related to social welfare, • supply of services and goods related to the protection of children and

youth, • education services, • engagement of staff by religious or spiritual institutions• Etc.

Reduced VAT rates (simplified)Reduced rate of 5% Reduced rate of 13%

a) all kinds of baked bread,

b) all kinds of milk,

c) books,

d) medicines (determined by the Croatian Institute

for Health Insurance),

e) Surgical implants (pacemakers, artificial joints,

stents etc.),

f) Cinema tickets,

g) Daily newspapers (on paper),

h) Scientific journals.

a) Tourist services (services of accommodation,

agency commission for these services etc.),

b) Other daily and periodic newspapers and

magazines,

c) edible oil and grease,

d) children seats and baby food,

e) water supply (utilities).

f) Concert tickets,

g) electrical energy,

h) public service of collecting waste

i) Caskets and coffins,

j) Seedling and seeds.

Changes 2008-17 Changes 2008-17

2013 – increase from 0% to 5% (Croatian accession to

the EU)

2013 – broaden for (g) (before 10%)

2012 – broaden for oil, baby food etc.

2013 – broaden for catering services, and narrowed

for newspapers (only periodicals)

2014 – increase form 10% to 13%

2017 – abortion of reduced rate for catering services,

and broaden for childern seats, caskets, seeds etc.

According to Annex III of VAT Directive 2006/112/EC

Discussion question?

• Should Croatia reduce standard VAT rate? • When?

• How much?

• Should Croatia aboard/introduce (some) reduced rates?• When?

• Which products? (for example: fresh meet)

Developments in labor taxationEU & CEE trends and Croatian perspective (PIT and social contributions)

SSC are dominant in tax wedge in EU…

Source: OECD (2018) & author.

0

10

20

30

40

50

60

Tax wedge, as % of labour cost (2017)

Income tax SSC Employee SSC Employer

…especially in Croatia…

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

Tax wedge in Croatia

SSC Employee SSC Employer PIT Surtax

Average gross salary in 2017.

Source: author.

Social contributions are above EU average in majority CEE countries

0

2

4

6

8

10

12

14

16

Bulgaria Romania Croatia EU Poland Hungary Slovakia Slovenia Czech R.

Social contributions in CEE, as % of GDP (2016)

Employer Employee


Top PIT rate in EU are stable after crisis period…Croatia differs from EU trends until last couple years


20

25

30

35

40

45

50

55

60

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Top statutory PIT rates (including surcharges), 1995-2018

EU-28 Croatia CEE

Slovenia and Croatia have highest PIT rates in CEE

0

10

20

30

40

50

60

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Top statutory PIT rates in CEE, 1995-2018

Bulgaria Czech Republic Croatia Hungary Poland Romania Slovenia Slovakia


Frequent changes in PIT in CroatiaYear Change Personal

alowance

I. Bracket II. Bracket III. Bracket IV. Bracket

Rate Base Rate Base Rate Base Rate Base

1994. 332 25% till 996 35% above 996

PA (February) 400 25% till 1.200 35% above 1.200

PA (July) 500 25% till 1.500 35% above 1.500

1995. PA 700 25% till 2.100 35% above 2.100

1997. PA + rate 800 20% till 2.400 35% above 2.400

1999. PA 1.000 20% till 3.000 35% above 3.000

2000. PA (April) 1.250 20% till 3.750 35% above 3.750

2001. Rate & bracket 1.250 15% till 2.500 25% 2.500-6.250 35% above 6.250

2003. PA, new rate &

bracket

1.500 15% till 3.000 25% 1.500-7.500 35% 7.500-21.000 45% Above

21.000

2005. PA 1.600 15% till 3.200 25% 3.200-8.000 35% 8.000-22.400 45% above

22.400

2008. PA (July) 1.800 15% till 3.600 25% 3.600-9.000 35% 9.000-25.200 45% above

25.200

2010. Rate & bracket

(July)

1.800 12% till 3.600 25% 3.600-

10.800

40% above 10.800

2012. PA & bracket

(March)

2.200 12% till 2.200 25% 2.200-8.800 40% above 8.800

2015. PA & bracket 2.600 12% till 2.200 25% 2.200-

12.200

40% above 12.200

2017. PA, new rate &

bracket

3.800 24% till 17.500 36% above

17.500

Source: author.

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

Structure of employees (annual net income, 2015)

≈15.000

Annual PA45.600

1. Bracket 24%till 210.000 annually

2. Bracket 36%above 210.000

Narrow tax base in Croatia (SSC, PA, brackets, rates and other sources of income)

≈786.000 ≈740.000

Source: Tax administration.

Potential changes: broader 1. bracket or abandon 36% rate?

30%

32%

34%

36%

38%

40%

42%

44%

46%

48%

50%

3.0

29

,55

3.5

00

4.5

00

5.5

00

6.5

00

7.5

00

8.5

00

9.5

00

10

.50

0

11

.50

0

12

.50

0

13

.50

0

14

.50

0

15

.50

0

16

.50

0

17

.50

0

18

.50

0

19

.50

0

19

.75

0

20

.50

0

21

.50

0

22

.50

0

23

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0

24

.50

0

25

.50

0

26

.50

0

27

.50

0

28

.50

0

29

.50

0

30

.50

0

Tax wedge in Croatia

With 36% Without 36%

0

2

4

6

8

10

12

0 -

1.0

00 k

n

1.0

01 -

2.

000

kn

2.0

01 -

5.

000

kn

5.0

01 -

7.

000

kn

7.0

01 -

10.

000

kn

10.

001

- 1

5.00

0 kn

15.

001

- 2

0.00

0 kn

20.

001

- 2

5.00

0 kn

25.

001

- 3

0.00

0 kn

30.

001

- 3

5.00

0 kn

35.

001

- 4

0.00

0 kn

40.

001

- 4

5.00

0 kn

45.

001

- 5

0.00

0 kn

50.

001

- 5

5.00

0 kn

55.

001

- 6

0.00

0 kn

60.

001

- 6

5.00

0 kn

65.

001

- 7

0.00

0 kn

70.

001

- 7

5.00

0 kn

75.

001

- 8

0.00

0 kn

80.

001

- 9

0.00

0 kn

90.

001

- 1

00.0

00

kn

100.

001

- 1

10.0

00

kn

110.

001

- 1

20.0

00

kn

120.

001

- 1

40.0

00

kn

140.

001

- 1

60.0

00

kn

160.

001

- 2

00.0

00

kn

200.

001

- 3

00.0

00

kn

300.

001

- 4

00.0

00

kn

400.

001

- 5

00.0

00

kn

500.

001

- 7

00.0

00

kn

700.

001

- 1

.000

.00

0 kn

abo

ve 1

.000

.00

0 kn

Fiscal effect of potential changes (Billion HRK)

Without rate 36% Bracket 25.000 Current

500 mil.

200 mil.

Source: author.

Discussion questions?

• Should Croatia abandon top PIT rate of 36% or broader 1. bracket to 25.000 HRK?

• Horizontal equity issue: Should all sources of income inside PIT be taxed in the same way (at statutory rates, withoutallowing the lower withholding tax to be the final tax due)?

Developments in CITEU & CEE trends and Croatian perspective

Race to the bottom still present in EU… Croatia after long time in trend

10

15

20

25

30

35

40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Top statutory CIT rates (including surcharges), 1995-2018

EU-28 Croatia CEE


Since 2000 almost every MS have significatly lowered CIT rate

0

10

20

30

40

50

60

Top statutory CIT rates

2018 2000


Europa precede the rest of the World

15

20

25

30

35

40

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Corporate tax rates

Europe average Asia average Latin America average North America average Africa average Oceania average

Source: KPMG (2017).

Croatia has on of highest rates in region…Slovenia recently increased rate

0

5

10

15

20

25

Montenegro Bosnia andHerzegovina

Macedonia Albania Serbia Croatia Slovenia EU-28

CIT rates, 2017

Source: KPMG (2017).

Although there is trend to broaden tax base, still many types of tax incentives are employed which reduce ETR

Incentive Developing countries(52) Developed countries (51) Total (103)

Reduced CIT rate 43 40 83

Tax holidays 37 30 67

Accelerated depreciation 26 21 47

Investment allowances 18 8 26

Social security reductions 5 7 12

Import duty exemptions 39 24 63

Other 32 13 45

Source: Easson (2004: 132).

Several period of different incentive policy in Croatia… inconsistent and dependable of EU accession process

0

0,5

1

1,5

2

2,5

3

3,5

4

0

1

2

3

4

5

6

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Tax expenditure in Croatia (billion HRK)

VAT CIT PIT % total revenue (right)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Structure of tax expenditure in Croatia

VAT CIT PIT

Source: author.


• Should Croatia increase/decrease CIT rate?

• Does Croatia have enough tax incentives? Are they efficient?

Developments in capital taxationEU vs. CEE vs. Croatia (property taxation in focus)

Short recap… Croatia among MS with lowest capital taxation

0

2

4

6

8

10

12

14

Capital taxation in EU (% GDP, 2016


Even less when taxing stocks of capital (wealth), especially immovable property

0

0,5

1

1,5

2

2,5

3

3,5

Income of corporations Income of households &self-employed

Stock of capital (wealth)

Structure of capital taxation (% GDP, 2016)

EU Croatia CEE

0

0,5

1

1,5

2

2,5

3

3,5

MT

HR

LU AT

CZ

EE BG LT HU SK DE

CEE SI IE RO SE FI PT

CY

NL

LV ES PL

BE IT

EU-2

8

DK EL UK FR

Recurrent taxes on immovable property (% GDP, 2016)

Capital tax on Stocks of Wealth Mil. HRK %

Real estate transfer tax 885,5 19,8%

Public land use taxes 70,3 1,6%

Utility charges 2.356,6 52,7%

Contributions for forest 51,6 1,2%

Motor vehicle taxes (legal persons) 64,6 1,4%

Boat taxes (legal persons) 1,2 0,0%

Annual levy on public roads use (at motor vehicles registration) 243,1 5,4%

Levy on public roads use for tractors 1,8 0,0%

Trading name taxes 127,6 2,9%

Deposit insurance premiums 535,7 12,0%

Taxes on holiday houses 122,1 2,7%

Inheritance and gift taxes 14,1 0,3%

Total 4.474,2 100,0%

Source: European

Commission (2018).


• Should Croatia introduce new recurrent property tax?

• If yes, should Croatia abandon utility charges?

Conclusion• EU and international context

• Stabilization in tax changes in post-crisis period in general

• Rise in capital and consumption taxes, fall in labour taxes

• Consumption taxation

• Croatia among highest VAT rates in EU (fiscal reasons)

• There is space for reducing standard rate, and changes in reduced rates (political reasons)

• Labour taxation

• SSC dominate in EU and Croatia

• Simplifying trend (less brackets, lower rates, less reliefs)

• Problem of fiscal equalization

• CIT taxation

• Simplifying trend also

• Abandoning incentive for reinvested profit

• Reduce CIT rate?

• Property taxation

• Space for improvement

• Recurrent immovable property tax

Final note… Thank you for your attention!

0

10

20

30

40

50

60

70

80

90

100

20

04

-01

20

04

-05

20

04

-09

20

05

-01

20

05

-05

20

05

-09

20

06

-01

20

06

-05

20

06

-09

20

07

-01

20

07

-05

20

07

-09

20

08

-01

20

08

-05

20

08

-09

20

09

-01

20

09

-05

20

09

-09

20

10

-01

20

10

-05

20

10

-09

20

11

-01

20

11

-05

20

11

-09

20

12

-01

20

12

-05

20

12

-09

20

13

-01

20

13

-05

20

13

-09

20

14

-01

20

14

-05

20

14

-09

20

15

-01

20

15

-05

20

15

-09

20

16

-01

20

16

-05

20

16

-09

20

17

-01

20

17

-05

20

17

-09

20

18

-01

20

18

-05

20

18

-09

Interest over time (Croatia, 2004-18)

Football Tax Budget Debt

Lists of tax debitors

Note: Numbers present interest for search related to highest point on graph for given region and time. Value 100 present the most popular term. Value 50 means that popularity is half less etc.Source: Google Trends.

Tax return

64%

28%

5% 3%

Average, 2004-18

Documents

Possible developments in tax arena - · 2019-09-25 · Possible developments in tax arena Hrvoje Šimović Summer School ^Trends in international taxation _ University of Dubrovnik