According to the Croatian Corporate Income Tax Act, the tax rate is 20%. The deadline for filing corporate income tax returns is four months after the period for which the profit tax is assessed. The tax liability has to be paid in the form of monthly tax advances determined on the basis of the previous year’s tax liability.
If corporate tax advance payments exceed the determined tax liability, taxpayers may claim either the refund or the offsetting of the payments against other tax liabilities.
Tax losses may be carried forward and used within five years following the year in which they were incurred. They may not be transferred to third parties except in the case of a merger or an acquisition.
Foreign legal entities performing business in Croatia are obliged to register their legal presence in the country and are subject to the same tax principles as Croatian companies.
The Croatian legislation does not allow consolidated group accounts. Corporate tax abroad is recognised for reducing the domestic tax liability up to the amount that would have been paid in Croatia  under similar conditions.
Interest on loans from a shareholder or a member of a company holding at least 25% of the shares or voting rights of the taxpayer is not recognised for tax purposes if the amount of the loan exceeds four times the share of the shareholder in the capital or its voting rights. This provision does not apply to loans obtained from financial institutions.
A third-party loan guaranteed by the shareholders will be treated as having been granted by the shareholder himself. Any interest paid above the usual market rates will not be recognised for tax purposes. Croatian taxpayers are allowed to provide loans to domestic companies and long-term loans to foreign companies.
The reserves considered to be deductible expenses are those for pensions and severance payments, the costs for renewing natural resources, reserves for costs in guarantee periods and costs arising from court cases.