By the end of the year 2019, changes were made in November in following acts:
- Personal income tax act
- Corporate income tax act
- Derivative instruments gains tax act
- Tax procedure act
- CORPORATE INCOME TAX RATE
Corporate income tax rate stays the same at 19% and does not change in year 2020.
- TAX RELIEF FOR COMPANIES
A new change in corporate income tax act is tax payment when using tax reliefs:
If a company has taxable profit, all tax reliefs and losses from past tax periods will be recognized at 63% of tax base. Companies that make profit for taxation and have so far lowered tax base to 0 because of using tax reliefs such as ( investitions in research and development, equipment and intangible capital assets, employing certain categories of disabled persons, investing in voluntarily extra insurance, investing assets in donations) will now pay corporate income tax.
Changes also stand for transferring unused reliefs in tax period: reliefs for investing in research and development and equipment and intangible capital assets can also transfer in next 5 tax periods, the remaining reliefs reduce tax base only in the year of origin and not later.
This statement is also valid for self-employed individuals.
Company creates tax profit before corporate income tax in amount of 100.000,00€
Company invested in purchase of equipment in amount of 375.000,00€ in year 2020. Company can use tax relief only in amount of 63.000,00€, the rest in next 5 years.
Tax base: 100.000,00€ x (1- 0,63) = 37.000,00€
Calculation corporate income tax act: 37.000,00€ x 19% = 7.300,00€
Company will still have to pay 7.300,00€ corporate income tax, which is 7,03% of tax base.
- AMORTISATION OF CAPITAL ASSETS IN BUSSINES RENT
With including the business rent assets in tangible capital assets, the legislator has provided, that highest yearly amortisation rate is used for expense of amortisation for tax purposes. It suits actual amortisation period of that specific asset, which is the period of the asset in bussines rent. The statement is valid from 2019 on.
TAXATION OF NATURAL PERSONS AND SELF EMPLOYED PERSONS
- CAPITAL OWNERS TAXATION
Income from capital (interests, dividends, capital profits)
In 2019 it still stands that in the case of gaining interest, dividends and making capital profits and derivative instruments gains tax, taxpayer pays 25% tax, which is final.
From 2020 on income from capital will be taxable at the rate of 27,5%. For profits from capital, which are actualized in 2019, a table is presented for rates of taxes which will be valid in 2020:
|Capital ownership||year 2019||year 2020|
|Less than 5 years||25%||27,50%|
|From 5-10 years||15%||20%|
|From 10-15 years||10%||15%|
|From 15-20 years||5%||10%|
|Over 20 years||untaxed||untaxed|
- INCOME FROM RENTING OUT PROPERTY
In case of income from renting out property, taxpayers will consider normalised expenses at rate of 15% (in 2019 only 10%), also the rate of income tax from renting out property is raised to 27,5%.
- GAINING OWN STOCKS AND SHARES
With purpose of closing down law incompatibilities and avoiding abuses of the law, it is stated, that income from disposing stocks and shares in attempt to gain own stocks or shares of the company outside of the organised market is taxed as dividend in complete paid off ammount. Disposer can report about the value of disposed stocks and shares in writing to payer of tax before balance sheet of tax deduction.
- EMPLOYEE TAXATION
INCOME TAX SCALE AND RELIEFS CHANGES
With tax reform of 2020, tax scale will also change in a way of relief of incomes from middle income tax classes. For 2020 a following income tax scale stands:
Also the common general relief will be raised for persons subject to income tax, which is stated on the base of heigh of yearly income of individual and will be in 2020:
|If the collective income in € is the general relief in € is|
|13.316,83||3.500,00 + (18.700,38-1,40427 x collective income)|
This means, that all taxpayers will have raised general tax relief from minimum 3.302,00€ to 3.500,00€.
Spreadsheet of special reliefs for supported family members for year 2020:
A novelty for enforcing special reliefs for supported family members( also the ones of 18 and the unemployed children,parents or adopters) is the same permanent residence as the taxpayer, who enforces the relief for family member as the supported member. This novelty does not stand for children younger than 18 years of age.
- SMALLER VEHICLES WITH LOWER ELECTRIC POWER BENEFITS
With purpose of encouraging taxpayers to buy electric powered vehicles, which are used by employees for private purposes, a benefit is lowered for such vehicles. A benefit for private use of smaller electric powered vehicle will be 0,3% of the value a month, providing that value of the vehicle, including the value-added tax does not exceed 60.000,00€. Benefit for private use of company vehicle for regular gas vehicles as well as bigger electric powered vehicles remains at rate of 1,5% of the value.
- Personal income tax act
- Chamber of accounting
By Anka Pušnjak