On 1 January 2009 the new General Tax Law has become effective in order to harmonize the Croatian tax system with EU requirements.  The most important amendments include:
The general definition of related parties for taxation purposes has been changed and does no longer refer to the definition contained in the Companies Act.  It now limits related parties to entities where one entity directly or indirectly holds more than a 50% share in the other entity.
Business books, records and reports can be stored abroad as long as the Tax Authorities are ensured prompt access to such documentation whenever they request it. Valid tax numbers JMBG/MB will gradually be replaced by the newly introduced personal identification number for both physical and legal persons. Taxpayers will be allowed to correct a filed tax return within 12 months from the filing deadline for the tax return in question.
Tax assessments on the basis of annual tax returns must be delivered to taxpayers as soon as possible and, in any case, within one year after the deadline for submission of the tax return. The minimum notification period of an upcoming tax inspection has been reduced to 8 calendar days for all taxpayers.
The new law does not allow the taxpayers the possibility to file an objection against an order for a tax inspection asking for a delay of the inspection, nor has a taxpayer the possibility to file an objection on how the tax inspection is conducted.
Fines for taxpayers have been substantially increased for various tax offences. The Tax Authorities will have to establish an information system which will make it easier for taxpayers to access their tax related information. The date of VAT registration/deregistration of a taxpayer, as well as information on taxpayers who have committed circular VAT fraud, will be public information.
While the definition of “permanent establishment” has been amended to be fully in line with the OECD guidelines applied in EU countries, the scope of the definition has not been changed.  The term “branch of activity” has been introduced, replacing “business unit”, to be fully in line with the definition of branch of activity as regulated by the Council Directives of EU countries.