The General Tax Law

1. The General Tax Law

2. The General Tax Law • General TaxLawwasapplicablefrom 1 January 2003 • On 1 January 2009, a new General Tax Act (GTA) came into force. • Itwasamendedin 2012

3. The reason for the new act • The reason for introducingthe new act was to provide more precise definitions of certain legal concepts inorder to improve the application of taxation procedures and thus ensure better protectionof taxpayers’ rights. • Moreover, thanks to the new act, the Croatian tax legislationcomplies with the European one, particularly as concerns the administrative cooperationand exchange of information among the EU Member States.

4. General Tax Law • The General Tax Law regulates the legal relations of taxpayers and tax authorities that are common to all taxes • It does so: • systematically (sustavno), • integrally (cjelovito) and • uniformly (na jedinstven način)

5. Parties • Taxpayers and the state • Taxpayers are all natural and legal persons • Natural person – fizička osoba • Legal (artificial) person – prava osoba

6. Positionofparties • Not equal – the state makes the rules and taxpayers are in a subordinate position • Taxpayers have obligations with respect to the state, but they also have formal and material rights

7. The Tax Authorities Main tasks: • to carry out the taxation procedure (voditi porezni postupak) • to control its implementation (kontrolirati njegovu provedbu)

8. The principles upon which the law is based • Lawfulness • The application of tax provisions • Objectivity • Right to appeal • The keeping of books and records • Evidence • Auditing • Good faith of all participants of the tax procedure • Use of standard language and writing • Economic approach

9. Vocabulary • Lawfulness - zakonitost • The application of tax provisions – primjena poreznih propisa • Objectivity - objektivnost • Right to appeal – pravo na žalbu • The keeping of books and records – vođenje knjiga i evidencije • Evidence - dokazivanje • Auditing – inspekcijski nadzor (revizija) • Good faith of all participants of the tax procedure – postupanje u dobroj vjeri svih sudionika porezno-pravnog odnosa • Use of standard language and writing – upotreba službenog jezika i pisma • Economic approach – gospodarstveni pristup

10. Lawfulness • Those who are involved in the relationship covered by the tax law are obliged to respect all legal rules

11. The application of tax provisions • In the taxation procedure, the tax rules that were in force at the time of the occurrence of the fact on which the taxation is based will be applied.

12. Objectivity • During the taxation process, the tax authorities establish the facts objectively and conscientiously, irrespective of whether they tend to be to the benefit or the detriment of the taxpayer.

13. Right to appeal • A taxpayer can file complaints against tax instruments.

14. Book-keeping • The taxpayer is obliged to keep records in accordance with the current book-keeping regulations.

15. Evidence • Both the taxpayer and the tax authority have to prove the facts in the tax procedure.

16. Auditing • Auditing is carried out with respect to both small and large taxpayers.

17. Good faith • All participants are obliged to behave properly, with good intentions, cooperatively and conscientiously.

18. Economic approach • Taxation facts are established according to their economic importance, which means that every acquisition of some income is taxed, irrespective of whether this is a legal or an illegal business.

19. Vocabulary practice • 1. Find the appropriate subtitle for each paragraph: • The right to be informed • Protection of human dignity • The right to response • Protection of confidentiality of data and privacy

20. The Protection of Human Rights • The law also enshrines the protection of human rights such as: • ___________________________________: taxpayers have the ability and the right to speak their mind about all the essential facts related to the adoption of any decision (ruling or judgement) before that decision is made. • ___________________________________: the taxpayer is bound to give the tax authority the truthful data that are essential in the taxation procedure, and the tax authority is bound to preserve the confidential data in the interest of the taxpayer. In this manner, the privacy of the taxpayer is protected. If the taxpayer renounces in writing the right to the protection of privacy, these data can be announced in public. • ___________________________________: in the tax procedure, tax authorities may not threaten the reputation, dignity or honour of the taxpayer. • ___________________________________: the tax authority may not use forcible payment methods (by seizure, for example) to take away the source of information for the taxpayer.

21. The law also enshrines the protection of human rights such as: • The right to response: taxpayers have the ability and the right to speak their mind about all the essential facts related to the adoption of any decision (ruling or judgement) before that decision is made. • Protection of confidentiality of data and privacy: the taxpayer is bound to give the tax authority the truthful data that are essential in the taxation procedure, and the tax authority is bound to preserve the confidential data in the interest of the taxpayer. In this manner, the privacy of the taxpayer is protected. If the taxpayer renounces in writing the right to the protection of privacy, these data can be announced in public. • Protection of human dignity: in the tax procedure, tax authorities may not threaten the reputation, dignity or honour of the taxpayer. • The right to be informed: the tax authority may not use forcible payment methods (by seizure, for example) to take away the source of information for the taxpayer.

22. Key terms • To keep books/records • To apply rules/laws • To file a complaint (against) • To prove the facts in the tax procedure • To the benefit ofv.to the detriment of the taxpayer • To be in force

23. Thank you for your attention!