LAWS TO WATCH: Income Tax (Dividends) Act

In accordance with the decision of the Croatian Constitutional Court, the government proposed amendments to the Income Tax Act, which abolished the retroactive 12% taxation of dividends from retained earnings. On 1 March 2012, the government passed amendments to the mentioned legislation, introducing the taxation of capital income, i.e. dividends obtained since 2000.

The Croatian Employers Association (HUP) and the company SN Holding submitted an appeal to the legislation before the Constitutional Court. The court temporarily suspended the implementation of the provision in April 2012, and, subsequently, banned the controversial provisions of the legislation on 18 September 2013. As a result, the 12% taxation of dividends will be applicable only for the period from 1 March 2012…

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