TOPICS

❖ Unit 10 Tax Administration

❖ Unit 11 Electronic Commerce Act

PART III: TAXES IN THE EUROPEAN UNION

❖ Unit 12 Treaty on the Functioning of the European Union

❖ Unit 13 Economic and Monetary Union and the Euro

The Failure of the Euro

❖ Unit 14 Taxation in the European Union

❖ Unit 15 European Court of Auditors
❖ Unit 16 OLAF
❖ Unit 17 European Central Bank
❖ Unit 18 Double Taxation in the European Union

CROATIAN TAX SYSTEM

- Croatian tax system includes the following taxes:

o Corporate income tax

o Personal income tax
o PIT is paid on worldwide income in case of tax residency in Croatia.
o Two types of taxpayers are: residents and non-residents
o PIT is based on the income earned for paid work, independent activities and from property
rights
o Value-added tax
o Croatia raised VAT for 2% in 2013 when it joined the EU.
o New standard VAT rate is 25%
o Reduced rates are 5 and 13%.
▪ 25%
▪ Standard
▪ All other taxable goods and services.
▪ 13%
▪ Reduced
▪ Some foodstuffs; water supplies (excluding bottled water); newspapers (other than daily
published newspapers with less than 50% advertising content); periodicals (magazines other
than science periodicals with less than 50% advertising content); tickets for concerts; hotel
accommodation; restaurants; certain bars, cafes and nightclubs; some alcoholic beverages.
▪ 5%
▪ Reduced
▪ Some foodstuffs (including bread, milk and infant formula); pharmaceutical products (only
approved medicines prescribed by a doctor); some medical equipment; books (excluding e-
books); daily newspapers (with less than 50% advertising content); science periodicals;
admission to cinema.
▪ 0%
▪ Zero
▪ Intra-community and international transport (excluding road and rail).
▪ Source: https://www.vatlive.com/country-guides/europe/croatia/croatia-vat-rates/
o Special taxes (excise duties)
 o Excise duties are paid on certain products, such as oil, tobacco products, alcoholic
and non-alcoholic beverages, beer, coffee, automobiles and other motor vehicles,
vessels and aircraft, luxury products
o Real estate transfer tax
o Taxpayers: buyers of real property
o Tax base: market value of the real property
o Tax rate: 4%
o Levies on the organisation of games of chance

- Added value is the value of what the producer has added to the inputs before they are sold as new
products and services

1. Why is VAT a general tax?

A general tax applies, in principle, to all commercial activities involving the production and
distribution of goods and the provision of services.
2. What is a consumption tax?
A consumption tax is ultimately borne by the final consumer. It is not a charge on businesses
3. What is an indirect tax?
VAT is paid to the revenue authorities by the seller of the goods, who is the "taxable person",
but it is actually paid by the buyer to the seller as part of the price. It is thus an indirect tax.
4. What does it mean that VAT is charged as a percentage of price?
VAT is charged as a percentage of price, which means that the actual tax burden is visible at
each stage in the production and distribution chain.

FAMOUS TAX QUOTES

o "Taxes are what we pay for a civilized society."

Oliver Wendell Holmes, former Justice of the United States Supreme Court

o “Death, taxes and childbirth! There's never any convenient time for any of them.”

Margaret Mitchell, Gone with the Wind

TRANSLATE
Izbjegavanje poreza – tax avoidance

Utaja poreza – tax evasion

Porezna olakšica – tax benefit

Oslobođenje od poreza

Porezna obveza – tax liability

Porezni propisi – tax provisions

Natural person – fizička osoba

Right to appeal – pravo na žalbu

Non-disclosure obligation – obveza čuvanja porezne tajne

Legally binding decision – pravno obvezujuća odluka

Real estate transfer tax – porez na promet nekretnina

Taxable transaction – oporezivi pravni posao

Taxable activity – oporeziva djelatnost

TAX ADMINISTRATION
What is Tax Administration?

o The Tax Administration is the administrative organization within the Ministry of Finance
whose basic duty is to implement tax regulations and regulations concerning the payment of
obligatory contributions.

Translate the above paragraph!

Porezna uprava je upravna organizacija u sastavu Ministarstva financija čija je temeljna zadaća
primjena poreznih propisa i propisa o plaćanju obveznih doprinosa.

Translate the following:

o All residents are obliged to participate in the settlement of public expenses in accordance
with their economic abilities. The tax system is based on the principles of equality and equity.

Svatko je dužan sudjelovati u podmirenju javnih troškova, u skladu sa svojim gospodarskim

mogućnostima. Porezni se sustav temelji na načelima jednakosti i pravednosti.

Duties of the Tax Administration

- Can you enumerate main duties of the tax administration?

- Read the paragraph The Scope of Work of the Tax Administration (p.37-38)

VOCAB
- receiving tax returns – zaprimanje poreznih prijava

- tax refund – povrat poreza

- tax accounts – porezno knjigovodstvo

- tax liability – porezna obveza

- seizure of assets – ovrha

- filing charges – podnošenje prijava

- misdemeanor proceedings – prekršajni postupak

- violation of tax regulations – povreda poreznih propisa

- enforcement of regulations – provođenje propisa

- to maintain official record - voditi službenu evidenciju

- obligatory contributions – obvezni doprinosi

TRANSLATE
The Tax Administration performs administrative Porezna uprava obavlja upravne i druge stručne
and other professional duties relating to the poslove, što se odnose na:
following: o zaprimanje poreznih prijava, bilježenje
o Receiving tax returns, entering tax poreznih obveza u poreznom
liabilities in tax accounting, collecting knjigovodstvu, naplatu i povrat poreza,
and refunding taxes o utvrđivanje pravodobnosti, zakonitosti i
o Establishing the timeliness, lawfulness pravilnosti podnijetih poreznih prijava,
and regularity of submitted tax returns o utvrđivanje porezne osnovice i porezne
o Establishing tax base and tax liability obveze,
o Carrying out inspection supervision o provođenje inspekcijskog nadzora,
o Conducting the seizure of assets in o provođenje ovrhe radi naplate poreza
order to collect taxes podnošenje prijava za pokretanje
o Filing charges in order to initiate prekršajnog i kaznenog postupka
misdemeanour and criminal
proceedings

COLLOCATIONS
VERB NOUN
Establish tax liability Timelines
Collect data Taxes
Refund Taxes
Carry out supervision Seizure
File Charges
Enforce Contracts
Issue documents autorization

ELECTRONIC SERVICES OF THE TAX ADMINISTRATION

Read the paragraph Electronic Services of the Tax Administration and answer the following
questions:

1. What are main tasks of the e-Croatia programme?

2. Which services are available within e-Taxes project?
3. What is necessary in order to use e-VAT services?
4. What is the purpose of the programme?
5. What are the advantages?
TASKS
- One of the main tasks is to create favourable conditions for the development of electronic business

- Creating legal environment began with the Law on Electronic Signatures was passed in January 2002
and the Law on Electronic Commerce in November 2003

SERVICES
- e-VAT service: the first electronic service of the Tax Administration within the e-Taxes project

- It provides all taxpayers in Croatia with simple and secure distribution of the data on periodic
calculation of VAT for a specific cost accounting period

- The Electronic Tax Book Keeping Card

- e-ID (enables the users to submit electronically their records of receipts from dependent labour)

REQUIREMENTS FOR USAGE

- A digital FINA certificate (digital signature) on a FINA Smart Card (e-Card) and an e-Taxes package

PURPOSE
- to modernise the operation of the Tax Administration

- to enable costumers to submit tax registration via the Internet

ADVANTAGES
- time-saving

- reduced expenses

- services are free of charge

TRANSLATIONS
- evidencija primitaka od nesamostalnog rada – records of receipts from dependent labour

- predati poreznu prijavu preko interneta – to submit tax registration via the Internet

- razvoj elektroničkog poslovanja – development of electronic business

- dostava podataka o periodičnom obračunu PDV-a – distribution of the data on periodic calculation
of VAT

- određeno obračunsko razdoblje – specific cost accounting period

- službeno potvrđeni elektronički potpis – certified electronic signature

 ELECTRONIC COMMERCE ACT
E- GOVERNMENT
o e-Government is the use of information and communication technologies, particularly the
Internet, as a tool to achieve a better government
o It enables better policy outcomes, higher quality services and greater engagement with
citizens

AIMS
o Improving government processes (eAdministration)
o Connecting citizens (eCitizens and eServices)
o Building external interactions (eSociety)

http://www.youtube.com/watch?v=3uok6WSc4nk

SUGGESTED ANSWERS
o Synonyms: online government, connected government
o Objectives: automation, informatisation, transformation
o Benefits: more efficiency, less spending, faster action, more results

ADVANTAGES
o Speed, efficiency and cost effective manner
o Easy access to government information for citizens and agencies
o Transparency and accountability
o Citizen participation
▪ Informing the citizen
▪ Representing the citizen
▪ Encouraging the citizen to vote
▪ Consulting the citizen
▪ Involving the citizen
o Can you think of any disadvantages of e-government?

DISATVANTAGES?
o An electronic based system which loses the person to person interaction
o Literacy of the users and the ability to use the computer
o Reliability of information on the web
o Hyper-surveillance
o Cost
o Inaccessibility
o False sense of transparency and accountability

E-CROATIA
o What do you know about the project e-Citizens?
o Which services are available to the citizens?
E SERVICES
o Through the Personal User Mailbox, as well as viewing notices sent personally to you, you
can:
o request electronic extracts from the register of births and marriages
o verify your registration to vote in the electoral register
o find out about your child's grades at school
o verify your selected GP
o order a European Health Insurance Card
o request an electronic employment booklet
o find out how much pension you can expect to receive
o register as a potential employee
o verify the amount of contributions paid into the Second Pillar of pension insurance
o obtain a REGOS certificate
o check your tax account card
o check your data in the OIB system
o manage your electronic identity.

PART 2
ELECTRONIC COMMERCE ACT
ELECTRONIC COMMERCE
o E-commerce (electronic commerce or EC) is the buying and selling of goods and services, or
the transmitting of funds or data, over an electronic network, primarily the Internet. These
business transactions occur either business-to-business, business-to-consumer, consumer-to-
consumer or consumer-to-business. The terms e-commerce and e-business are often used
interchangeably.

ELECTRONIC COMMERCE ACT

o The Electronic Commerce Act was adopted by the Croatian Parliament at its session on 15
October 2003. It has been harmonised with the Directive 2000/31/EC of the European
Parliament and Council. It regulates the obligation of informing and providing commercial
communications, e-documents, form and validity of e-contracts, responsibility of the
provider of information society services, as well as inspection supervision and penal
provisions.

GENERAL PROVISIONS
This Act shall regulate the provision of information society services, the responsibility of the provider
of information society services and rules concerning contracts concluded by electronic means.

Translate the sentence above!

Take into consideration the usage of legal ‘shall’

OPĆE ODREDBE

Ovim se zakonom uređuje/regulira pružanje usluga informacijskog društva, odgovornost davatelja

usluga informacijskog društva, te pravila u vezi sa sklapanjem ugovora u elektroničkom obliku.

o The provisions of this Act shall not apply to data protection, the field of taxation, the
activities of notaries, the representation of a client and defence of his interests before the
courts, gambling activities which involve wagering a stake with monetary value in games of
chance, including lotteries, casino games, betting transactions and slot machine games
pursuant to the provisions of special laws regulating the respective areas.
o the activities of notaries – javnobilježnička aktivnost
o representation of a client – zastupanje klijenta
o wagering a stake with monetary value in games of chance – igre na sreću s novčanim ulozima
o pursuant to – u skladu s

RELEVANT TERMS
o Information - podatak
o Information society service – usluga informacijskog društva
o Electronic signature – elektronički potpis
o Service provider – pružatelj usluge
o Recipient of the service – korisnik usluge
o Electonic contracts – ugovori u elektroničkom obliku
o Commercial communication – komercijalno priopćenje
o Consumer - potrošač

TRANSLATE
Electronic signature means data in electronic Elektronički potpis je skup podataka u
form which are attached to or logically elektroničkom obliku koji su pridruženi ili su
associated with other electronic data and which logički povezani s drugim podacima u
serve as a method of identification of the elektroničkom obliku, a služe za identifikaciju
signatory and of the credibility of the signed potpisnika I vjerodostojnosti potpisanoga
electronic document as defined by a special elektroničkog dokumenta, kako je definirano
law. posebnim zakonom.

o provisional accounts – privremena financijska izvješća, privremena računovodstvena

dokumentacija
o accounts receivable – potraživanja od kupaca / accounts payable – naplata računa
o credit card receivables – potraživanja po kreditnim karticama
o amounts receivable – iznos potraživanja
o interest receivable – naplativa kamata

ACCOUNT
o Business account
o Current account
o Foreign currency account
o Transfer account
o Savings account
COLLOCATIONS
To bear Meaning
To receive A message
To provide Services
To archive Data
To conclude A contract
To promote An image
To exercise Profession
To allow Access
To adopt An act
To regulate Respective areas

TRANSLATE
Davatalj usluga informacijskog društva sa The provider of information society services
sjedištem u RH dužan je potupati i pružati with a seat in the Republic of Croatia shall act
usluge u skladu sa zakonima i drugim propisima and provide services in accordance with acts
RH. and regulations of the Republic of Croatia.

THE TREATY ON THE FUNCTIONING OF THE EU

THE TREATY OF LISBON
o The TFEU was given its name and amended by the Lisbon Treaty which was signed in Lisbon
on December 13, 2007 and came into force on December 1, 2009.
o It is one of two primary Treaties of the European Union, alongside the Treaty on European
Union (TEU)
o The Lisbon Treaty is divided into two parts:
o the Treaty on European Union (TEU) and the Treaty on the Functioning of the European
Union (TFEU).
o The TEU sets out the general provisions governing the European Union. It also sets out the
overall provisions of the EU's external relations.
o The TFEU sets out the specific objectives of the EU's various policies.

TFEU
o The TFEU forms the detailed basis of EU law and sets out organisational and functional
details of the European Union.

SOURCES OF EU LAW
o Primary law – the Treaties (TEU, TFEU)
o Secondary law – acts of EU institutions and international agreements. Legally binding acts
include regulations, directives and decisions. Non-binding ones are recommendations and
opinions.
o Supplementary law – Court of Justice case law, international law and general principles of
law
FROM THE TFEU
Article 325

1. The Union and the Member States shall counter fraud and any other illegal activities affecting the
financial interests of the Union through measures to be taken in accordance with this Article, which
shall act as a deterrent and be such as to afford effective protection in the Member States, and in all
the Union’s institutions, bodies, offices and agencies.

2. Member States shall take the same measures to counter fraud affecting the financial interests of
the Union as they take to counter fraud affecting their own financial interests.

o counter fraud – suzbijati prijevare

o deterrent – sredstvo za odvraćanje

TRANSLATE
3. Without prejudice to other provisions of the Ne dovodeći u pitanje ostale odredbe Ugovorâ,
Treaties, the Member States shall coordinate države članice koordiniraju svoje djelovanje
their action aimed at protecting the financial usmjereno na zaštitu financijskih interesa Unije
interests of the Union against fraud. To this end od prijevara. Radi toga uz pomoć Komisije
they shall organise, together with the organiziraju blisku i redovitu suradnju među
Commission, close and regular cooperation nadležnim tijelima
between the competent authorities.

o without prejudice to – ne dovodeći u pitanje

o competent authorities – nadležna tijela

4. The European Parliament and the Council, 4. Radi postizanja učinkovite i jednake zaštite u
acting in accordance with the ordinary državama članicama, i u svim institucijama,
legislative procedure, after consulting the Court tijelima, uredima i agencijama Unije, Europski
of Auditors, shall adopt the necessary measures parlament i Vijeće, odlučujući u skladu s
in the fields of the prevention of and fight redovnim zakonodavnim postupkom i nakon
against fraud affecting the financial interests of savjetovanja s Revizorskim sudom, donose
the Union with a view to affording effective and potrebne mjere za suzbijanje i borbu protiv
equivalent protection in the Member States and prijevara usmjerenih protiv financijskih interesa
in all the Union’s institutions, bodies, offices Unije.
and agencies. 5. Komisija u suradnji s državama članicama
5.The Commission, in cooperation with svake godine Europskom parlamentu i Vijeću
Member States, shall each year submit to the podnosi izvješće o mjerama poduzetima za
European Parliament and to the Council a provedbu ovog članka.
report on the measures taken for the
implementation of this Article.

COLLOCATIONS
coordinate Action
Adopt Measures
Submit Report
Counter Fraud
Protect Interests
 Afford Protection
To build Growth
To tackle Crisis
To strengthen The role of
To undermine Confidence
To jeopardise Functioning

o A right for citizens to make a request to the Commission for it to propose a new initiative
o Better protection for citizens through the new status given to the Charter of fundamental
rights
o Diplomatic and consular protection for all EU citizens when travelling and living abroad
o Mutual assistance against natural or man-made catastrophes inside the Union, such as
flooding and forest fires
o New possibilities to deal with cross border effects of energy policy, civil protection and
combating serious cross border threats to health
o Common action on dealing with criminal gangs who smuggle people across frontiers
o Common rules to avoid asylum shopping where multiple applications are made to different
member countries
o Tackling terrorism through the freezing of assets, while full judicial review is guaranteed by
the European Court of Justice
o More democratic approach to EU decision-making (strengthened role of European
Parliament and national Parliaments)
o An ability to provide urgent financial aid to third countries

ECONOMIC AND MONETARY UNION OF THE EURO

FROM THE TREATY TO APPLICATION
o The Treaty of Maastricht (1992) enshrined the principle of a single European currency
o The name euro was adopted on December 16, 1995
o On 1 January 2002 the euro notes and coins started circulating in 12 European countries

- enshrine – sadržavati, ugraditi

- notes and coins – novčanice i kovanice

THE ORIGINS
o In 1970 the Werner Report proposed a convergence of economies and currencies of the six
EEC countries
o In 1979 the European Monetary System (EMS) was set up to reduce variations in the
exchange rates between the currencies of the member states

- convergence – konvergencija, usklađivanje

- currency - valuta
THE SINGLE EUROPEAN ACT
o In 1986 the Single European Act implied the convergence of European economies and the
need to limit fluctuations in the exchange rates between their currencies

- exchange rate - devizni tečaj

ECONOMIC AND MONETARY UNION

o In 1989 Commission President Jacques Delors put forward a plan and timetable for bringing
about economic and monetary union (EMU)
o The Treaty of Maastricht laid down a set of criteria to be met by member states if they were
to qualify for the EMU

MAASTRICHT CRITERIA
o Curbing inflation (Inflation may not be more than 1.5% higher than that of the average of 3
best performing member states)
o Cutting interest rates
o Reducing budget deficits to a maximum of 3% of GDP
o Limiting public borrowing (not more than 60% of the GDP)
o Stabilising the currency’s exchange rate

- curb inflation – regulirati inflaciju

- interest rates – kamate

- budget deficit – proračunski manjak, proračunski deficit

'OPTING OUT'
o Denmark, Sweden and the UK reserved the right not to move to the third stage of EMU
(adoption of the euro)

- Opting out – samoizuzeće, izuzimanje

EUROPEAN CENTRAL BANK

o In order to ensure the stability of the euro, an independent European Central Bank (ECB) was
set up, based in Frankfurt, and given the task of setting interest rates to maintain the value of
the euro

ECONOMIC UNION
o The euro has replaced currencies that were traditional symbols and instruments of national
sovereignty (f. e. German mark)
o It moved Europe considerably closer to economic union
o The need for monetary stability

STABILITY PACT AND ECONOMIC GROWTH

o In Amsterdam, in June 1997 the European Council adopted two important resolutions:
1. Stability and growth pact (maintaining budgetary discipline)
2. Economic growth (employment as priority)
COORDINATING ECONOMIC POLICIES
o In Luxembourg, in December 1997, the European Council adopted a resolution on
coordinating economic policies to establish stronger ties between countries that adopted the
euro

STABILITY OF THE EURO

o In spite of turbulent world situations and crises, the euro has enjoyed that kind of stability
and predictability that investors and consumers need

The world’s second most important currency

o The first one is US dollar
o The euro is increasingly being used for international payments and as a reserve currency,
alongside the US dollar

BENEFITS OD A SINGLE CURRENCY

o The euro has given European citizens a much clearer sense of sharing a common European
identity (free movement of people, goods and capital)

THE EUROZONE
o The following members of the European Union use the euro:
o Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy,
Latvia, Luxembourg, Malta, The Netherlands, Portugal, Slovenia, Slovakia, Spain
o Andorra, Monaco, San Marino, and Vatican City have formal agreements with the EU to use
the euro as their official currency and issue their own coins
o Kosovo and Montenegro have adopted the euro unilaterally, but these countries do not
officially form part of the eurozone and do not have representation in the European Central
Bank (ECB) or in the Eurogroup.
o The following members of the European Union do not use the euro:
o Bulgaria, Czech Republic, Denmark, Croatia, Lithuania, Hungary, Poland, Romania,
Sweden and the United Kingdom.

COLLOCATIONS
limit fluctuations
devalue a currency
set interest rates
reduce the purchasing power
maintain budgetary discipline
run up excessive deficits
maintain the value of the euro
adopt resolutions

ABOUT THE EURO

o The euro symbol – € – was inspired by the Greek letter epsilon. It also stands for the first
letter of the word ‘Europe’ in the Latin alphabet, while the two parallel lines running through
 the symbol signify stability. The European Commission organised an internal competition to
come up with the euro symbol. Some 30 drafts were considered.
o euro banknote design
▪ a design competition winning design by Robert Kalina theme “Ages and styles of Europe”
▪ Classical for the €5
▪ Romanesque for the €10
▪ Gothic for the €20
▪ Renaissance for the €50
▪ Baroque and rococo for the €100
▪ Iron and glass architecture for the €200
▪ Modern 20th century architecture for the €500
o euro coin design
▪ a design competition winning design by Luc Luycx
▪ Avers of all euro coins are same, but revers are different for each European Union Member
Stete
o the design of euro coins differs in:
▪ common side
▪ colour
▪ edge
▪ diameter and thickness
▪ mass in grams
o banknote security features
▪ the raised print
▪ the watermark
▪ the security thread
▪ the see-through register
▪ oil stripe/foil patch
▪ micro lettering
▪ ultra-violet properties
▪ infra-red properties

THE FAILURE OF THE EURO

o Inevitable – neizbježan
o Adverse- negativan
o To plague – mučiti, ometati, stvarati teškoće
o Austerity measures – mjere štednje
o To clash – sukobiti se, ne slagati se
o Impetus- poriv, pobuda, poticaj
o To instill – usaditi, uliti, ulijevati
o The Common Market – tržište EU (zajedničko tržište)
o different countries - heterogeneous groups of countries
o unavoidable consequences - inevitable consequences
o bureaucratic inefficiency -bureaucratic mismanagement
o negative economic outcomes - adverse economic outcomes
o vulnerable condition - fragile condition
o early incentive – initial impetus

COLLOCATIONS
austerity measures
debt crises
financial assistance
 monetary policy
trade Deficits
dictate Measures
impose Currency
withdraw Forces
share burden

TAXATION IN THE EU
SETTING TAX RATES
o The EU does not have a direct role in raising taxes or setting tax rates. The amount of tax
paid is decided by an individual government, not the EU

RESPONSIBILITY FOR DIRECT TAXATION

o Within the EU, governments retain sole responsibility for levels of direct taxation –i.e. tax on
personal incomes and company profits.

TAX HAVENS
o https://www.youtube.com/watch?v=KtnRz1EPsZ0
o A tax haven is a country or place that has a low rate of tax so that people choose to live there
or register companies there in order to avoid paying higher tax in their own countries.
o Tax havens in Europe

EU GOALS AND TAX RULES

o EU goals:
o job creation, the EU’s competitiveness, the single market and free movement of
capital.
o Tax rules have to be consistent with these goals

- competitiveness - konkurentnost

EU DECISIONS ON TAX MATTERS

o EU decisions on tax matters require unanimous agreement by all member governments. This
ensures that the interests of every single EU country are taken into account.

- unanimous agreement – jednoglasna suglasnost

THE ROLE OF THE COMMISSION

o The European Commission promotes co-ordination and coherence, particularly where more
than one member state is involved in taxation issues, to avoid double taxation,
discrimination or excessive costs from having to comply with the rules of more than one tax
system

THE ROLE OF ECJ

o Where the single market, free movement of capital or individuals’ rights are being
undermined by tax rules, the European Court of Justice is the ultimate arbiter of what is right
VAT
o VAT rates are an exception as they are fundamental to a properly functioning single market.
Nevertheless, there is considerable leeway for national differences in VAT rates.
o There is a minimum rate of 15% for VAT on most goods and services

- leeway – manevarski prostor, sloboda djelovanja

VAT IN EU
o Given that EU law only requires that the standard VAT rate must be at least 15% and the
reduced rate at least 5% (only for supplies of goods and services referred to in an exhaustive
list), actual rates applied vary between Member States and between certain types of
products.
o https://www.youtube.com/watch?v=k9HHdzXlCpo

EXCISE TAXES
o Changes and differences in excise tax on petrol, drinks or cigarettes can very easily distort
competition, so these are also subject to some common rules.
o Cultural differences are respected, for example in the approach to taxing beer and wine.

EU LEGAL FRAMEWORK
o The current legal framework regulating excise duties in the EU consists of two Council
Directives. Council Directive 92/84/EEC provides a structure for the member states to classify
alcoholic products into certain categories – these categories are used for taxation purposes.
Council Directive 92/84/EEC determines the minimum level of excise duties in the categories.
There is no maximum rate set in the directives.

COMPANY TAX
o In the area of company tax, the EU has two goals: preventing harmful tax competition
between member states and supporting the principle of free movement of capital.

- harmful tax competition – štetno porezno nadmetanje

PENSION RIGHTS
o The European Commission takes action to ensure that EU citizens are not deterred from
working in other EU countries by problems with transfer and taxation of pension rights.

- to deter – spriječiti, odvratiti

SAVINGS
o EU citizens can place their savings where they think they will get the best return. However,
tax remains due in their country of residence

TRANSLATION

The EU's role is to oversee national tax rules – EU ima zadaću nadzirati nacionalne porezne
to ensure they are consistent with certain EU propise kako bi se osiguralo da budu u skladu s
policies, such as: određenim politikama EU-a kao što je:
o promoting economic growth and job o promicanje gospodarskog rasta i
creation otvaranje radnih mjesta
 o ensuring the free flow of goods, o osiguravanje slobodnog protoka robe,
services and capital around the EU (in usluga i kapitala u EU-u (na
the single market) jedinstvenom tržištu)
o making sure businesses in one country o osiguravanje da poduzeća u jednoj
don't have an unfair advantage over zemlji nemaju nepoštenu prednost pred
competitors in another konkurentima u drugoj zemlji
o ensuring taxes don't discriminate o osiguravanje da se porezima ne
against consumers, workers or diskriminiraju potrošači, radnici ili
businesses from other EU countries. poduzeća iz drugih država članica EU-a.

The single market allows goods and services to Jedinstveno tržište omogućuje slobodnu
be traded freely across borders within the EU. prekograničnu trgovinu robom i uslugama
To make this easier for businesses – and avoid unutar EU-a. Kako bi se ona olakšala
competitive distortions between them – EU poduzećima i kako bi se spriječilo narušavanje
countries have agreed to align their rules for tržišnog natjecanja među njima, države članice
taxing goods and services. EU-a složile su se da trebaju uskladiti svoje
propise o oporezivanju robe i usluga.

Kod ostalih poreza, kao što su porez na dobit i For other taxes, such as company and income
dohodak, glavna je zadaća EU-a osigurati tax, the EU's main role is to ensure that
poštivanje načela poput nediskriminacije i principles such as non-discrimination and free
slobodnog kretanja na jedinstvenom tržištu. Za movement in the single market are followed.
to i za rješavanje zajedničkih izazova kao što je Increasingly, a coordinated EU approach is
utaja poreza među državama članicama sve je needed among all member countries to do this,
potrebniji usklađeni pristup na razini EU-a. as well as tackle common challenges such as tax
evasion.

VAT IN THE EU
WHAT IS VAT?
• a consumption tax placed on a product whenever value is added at each stage of the supply
chain, from production to the point of sale.
• VAT is levied at each stage of the PRODUCTION and DISTRIBUTION process.
• Taxable persons are individuals and LEGAL ENTITIES engaged in TAXABLE activities.
• The standard VAT rate in Croatia is 25%.
• The zero rate applies to BREAD AND MILK, BOOKS, SCIENTIFIC JOURNALS AND MEDICINES.

- Trade union - sindikat

- Chamber of commerce – Gospodarska komora

- Unfair competition – nepoštena konkurencija/tržišno nadmetanje

- Supply of services for consideration – obavljanje usluga uz naknadu

- Entertainment expenses – troškovi reprezentacije

- Exemptions - oslobađanje

- VAT refund – povrat poreza na dodanu vrjiednost

• Added value is the value of what the producer has added to the inputs before they are sold
as new products and services

- Porez na potrošnju – consumption tax

- Vlastita potrošnja – personal consumption

- Isporuka dobara – supply of goods

- Inozemni poduzetnik – foreign entrepreneur

- Oporezivi iznos – taxable amount

- Nerezident – non-resident

VAT IN EU
• The Value Added Tax, or VAT, in the European Union is a general, broadly based
consumption tax assessed on the value added to goods and services
• EU law only requires that the standard VAT rate must be at least 15% and the reduced rate at
least 5%
• An EU country can opt to apply one or two reduced rates but only to goods or services listed
in the VAT Directive
• the lowest standard rate: Luxembourg 17%
• the highest: Hungary 27%

REDUCED RATES (Annex III of the VAT Directive)

• LIST OF SUPPLIES OF GOODS AND SERVICES TO WHICH THE REDUCED RATES REFERRED TO IN
ARTICLE 98 MAY BE APPLIED
o Foodstuffs (including beverages but excluding alcoholic beverages) for human and
animal consumption; live animals, seeds, plants and ingredients normally intended
for use in the preparation of foodstuffs; products normally used to supplement
foodstuffs or as a substitute for foodstuffs;
o supply of water;
o pharmaceutical products of a kind normally used for health care, prevention of
illnesses and as treatment for medical and veterinary purposes, including products
used for contraception and sanitary protection;
o medical equipment, aids and other appliances normally intended to alleviate or treat
disability, for the exclusive personal use of the disabled, including the repair of such
goods, and supply of children's car seats;
o etc.

APPLICATION
• VAT applies more or less to all goods and services that are bought and sold for use or
consumption in the Community.
PERCENTAGE OF PRICE
• VAT is charged as a percentage of price, which means that the actual tax burden is visible at
each stage in the production and distribution chain.

A GENERAL TAX
• VAT is a general tax that applies, in principle, to all commercial activities involving the
production and distribution of goods and the provision of services.

CONSUMPTION TAX
• VAT is a consumption tax because it is borne ultimately by the final consumer. It is not a
charge on businesses.

NEUTRAL TAX
• VAT is collected fractionally, via a system of partial payments whereby taxable persons (i.e.,
VAT-registered businesses) deduct from the VAT they have collected the amount of tax they
have paid to other taxable persons on purchases for their business activities. This mechanism
ensures that the tax is neutral regardless of how many transactions are involved.

INDIRECT TAX
• VAT is paid to the revenue authorities by the seller of the goods, who is the "taxable person",
but it is actually paid by the buyer to the seller as part of the price. It is thus an indirect tax.

A TAXABLE PERSON

• For VAT purposes, a taxable person is any individual, partnership, company or whatever
which supplies taxable goods and services in the course of business.
• However, if the annual turnover of this person is less than a certain limit (the threshold),
which differs according to the Member State, the person does not have to charge VAT on
their sales.

TRANSLATION
IAKO je koronakriza u punom jeku, hrvatski
poduzetnici ne odustaju od zahtjeva da im se
smanji porezno opterećenje. Trn u oku im je
posebno PDV, budući da imamo jednu od
najvećih stopa tog poreza na potrošnju u
EU. Od nižih poreza, poručuju poduzetnici i
analitičari, koristi bi imale kako tvrtke tako i
građani, dok bi manji prihodi u proračunu
državu natjerali na provedbu reformi. S druge
strane, ističu, nastavak ovakve porezne presije
put je u daljnje kočenje gospodarskog razvoja i
nastavak rasta javnoga duga koji će otplaćivati
generacije koje dolaze.
 EUROPEAN COURT OF AUDITORS
o Institution that audits European Union (EU) revenue and expenditure to ensure lawfulness
and sound financial management

THE COURT OF AUDITORS

o The European Court of Auditors is an independent institution whose main role is to check
that the funds available to the EU are used legally, efficiently and for the intended purposes
o The Court audits the accounts of the EU's income and expenditure, which together form the
EU budget
o This role is especially important as part of the EU's income is derived from contributions from
the member states and so the Court ensures that the EU's citizens are getting maximum
value for their money
o https://www.youtube.com/watch?v=aC-Jp65SKX8

STRUCTURE OF THE ECA

o The Court of Auditors operates as a collegiate body of 27 Members, one from each Member
State. All audit reports and opinions are adopted by the college

o It takes decisions concerning the Court's organization and administration

CHAMBERS

o The ECA is organised into five chambers (audit groups), to which Members and audit staff are
assigned. There are four chambers with responsibility for the audit of the different areas of
EU expenditure and for revenue, together with a fifth chamber - the CEAD - responsible for
coordination, evaluation, assurance and development horizontally across all areas.

AUDIT GROUPS

o AUDIT GROUP I

- Preservation and management of natural resources

o AUDIT GROUP II

- Structural policies, transport, research and energy

o AUDIT GROUP III

- External actions

o AUDIT GROUP IV

- Revenue, banking activities, administrative expenditure, Community institutions and bodies

and internal policies

THE PRESIDENT

o The European Court of Auditors is headed by a President

o President is elected for a renewable three year term by the Members from amongst their
number
 o President’s role is that of primus inter pares - first amongst equals. He or she chairs the Court
meetings, ensures that Court decisions are implemented and that the institution and its
activities are soundly managed

o On 13 September 2016, Klaus-Heiner Lehne, the German Member, was elected as the ECA’s
11th President. His mandate was renewed on 12 September 2019.

WHAT DOES THE COURT DO?

o The Court’s main role is to check that the EU budget is correctly implemented

o The Court investigates the paperwork of any person or organization handling EU income or
expenditure

o It ensures that the EU income and expenditure is legal and above board and sound financial
management

o Its work helps guarantee that the EU system operates efficiently and openly

o It prepares general annual reports and special reports on certain bodies and issues

o Under the Amsterdam Treaty, the Court of Auditors also has the power to reposrt any
irregularities to the European Parliment and the Council. It's audit responsibilities have been
extend to European Community funds managed by outside bodies and by the European
Investment Bank

HOW IS THE COURT'S WORK ORGANISED?

o The Court of Auditors has approximately 900 staff, including translators and administrators
and 250 auditors

o The auditors frequently go on tours of inspection to the other EU institutions, the member
states and any country that receives aid from the EU

o The auditors are divided into ‘audit groups’. They prepare draft reports on which the Court
takes decisions

o The Court of Auditors has no legal powers of its own. If auditors discover fraud or
irregularities, they inform OLAF – the European Anti-Fraud Office

HISTORY

o The Court of Auditors was created by the 1975 Budgetary Treaty, but it was formally
established on 18 October 1977 (at that time the Court was not a formal institution).
o At first, it was an external body designed to audit the finances of the European Communities.
Later, when it became an institution, it gained some new powers such as the ability to bring
actions before the European Court of Justice( ECJ).
o Under the Treaty of Amsterdam, it gained the full power to audit finances of the whole of the
EU.

ARGUMENTS

o FOR

o The Court of Auditors helps guarantee that the EU budgetary system works efficiently and
openly
 o The Court contributes to improving financial management of the European Union

o The Court of Auditors is regularly acknowledged for its work in exposing fraud in the EU

o https://www.youtube.com/watch?v=Cbgp3d0jUoM

o AGAINST
o The Court's reports are often criticised as being extremely difficult to understand, even for
those working inside the EU
o The Court of Auditors is also seen as being too concerned with confidentiality - its role as the
'financial conscience' of the EU is weakened if the media are unable to use its findings to hold
the executive to account
o The size of the court has also come under criticism
o https://www.youtube.com/watch?v=7O7ZwC7ksgQ
o FORMED in 1975
o JURISDICTION European Union
o HEADQUARTERS Luxembourg

- European Court of Auditors – Europski revizorski sud

- lawfulness - zakonitost

- sound financial management – zdravo financijsko upravljanje

- renewable term of six years – obnovljivi šestogodišnji mandat

- audit report – revizorsko izvješće

- audit groups – revizorske skupine

- preservation of natural resources – očuvanje prirodnih resursa

- to handle EU income – upravljati prihodima EU

TRANSLATION

- The European Court of Auditors is an - Europski revizorski sud je nezavisna institucija

independent institution whose main role is to čiji je osnovni zadatak provjeravati da se
check that the funds available to the EU are sredstva EU-a troše namjenski na zakonit i
used legally, efficiently and for the intended ekonomičan način.
purposes - Revizori su podijeljeni u revizorske skupine i
- The auditors are divided into ‘audit groups’ pripremaju nacrte izvješća o kojima Sud donosi
which prepare draft reports on which the Court odluke.
takes decisions.

o The ECA was established in 1977

o Its headquarters are in LUXEMBOURG
o It has 28 Members, one from each MEMBER STATE
o Its staff includes auditors, administrators and TRANSLATORS
o The auditors are divided into AUDIT GROUPS
o They prepare DRAFT REPORTS and often go on tours of inspection to OTHER EU
INSTITUTIONS
o If auditors discovers fraud or irregularities, they inform EU BODIES RESPONSIBLE
 o implement (EU) budget
o adopt financial regulations, opinions
o pass the information
o give opinion
o take action
o discover irregularities, fraud

- a favourable account - a clean bill of health

- instigated - launched

- effort - endeavour

- recover money – to claw the money back

OLAF
BACKGROUND
o The European Union and the member states are required by the Treaty on the Functioning of
the EU (TFEU, Article 325) to counter fraud and any other illegal activities affecting the
financial interests of the Union.
o The European Anti-Fraud Office (OLAF) was set up in 1999 to protect the EU’s financial
interests and to conduct investigations against fraud and any other illegal activity affecting
the EU financial interests, as well as to assist Member States in the fight against fraud.

WHY OLAF?
o commonly known under its French abbreviation OLAF, Office de Lutte Anti-Fraude.
WHAT IS A FRAUD?

o Fraud is a deliberate act of deception intended for personal gain or to cause a loss to
another party.

o An irregularity is an act which does not comply with EU rules and which has a potentially
negative impact on EU financial interests, but which may be the result of genuine errors
committed both by beneficiaries claiming funds and by the authorities responsible for
making payments. If an irregularity is committed deliberately, however, it is fraud.

- fraud – prijevara
- irregularity - nepravilnost

- deliberate act of deception – namjeran čin obmane

- to comply with – biti u skladu s

- genuine error – stvarna pogreška

- beneficiary - korisnik

- to claim funds – polagati prava na sredstva

TRANSLATION
o Prijevara je namjeran čin obmane namijenjene za osobnu korist ili koja drugoj strani uzrokuje gubitak.

o Nepravilnost je čin koji nije u skladu s pravilima EU-a i koja ima potencijalno negativan utjecaj na
financijske interese EU-a, ali koja može biti rezultat stvarnih pogrešaka korisnika koji polažu pravo na
sredstva ili tijela nadležnih za izvršavanje uplata. Međutim, nepravilnost počinjena svjesno smatra se
prijevarom.

 https://www.youtube.com/watch?v=wIWTvfWY6n4

OLAF CANNOT INVESTIGATE

o fraud with no financial impact on the EU public funds.
o corruption which does not involve Members or staff of EU Institutions and bodies.
o fraudulent use of the EU logo or the name of EU institutions.

REPORT IF YOU SUSPECT…

o fraud or other serious irregularities with a potentially negative impact for EU public funds, whether EU
revenue, expenditure or assets held by the EU institutions.

o serious misconduct by members or staff of EU Institutions and bodies.

HOW TO REPORT
o OLAF can be contacted anonymously.
o There are no formalities.
o Just give as precise and detailed information as possible.
o You can communicate with OLAF in any of the 24 official EU languages.

OLAF IN FIGURES

o Between 2010-2019, OLAF:

o Concluded over 2000 investigations
o Recommended the recovery of over €7.3 billion to the EU budget
o Issued over 2700 recommendations for judicial, financial, disciplinary and administrative action to be
taken by the competent authorities of the Member States and the EU
o As a result of OLAF’s investigative work, sums unduly spent were gradually returned to the EU budget,
criminals faced prosecution before national courts and better anti-fraud safeguards were put in place
throughout Europe.

OLAF'S WORKLOAD
o In 2019, OLAF concluded 181 investigations, issuing 254 recommendations to the relevant national
and EU authorities.
o OLAF recommended the recovery of EUR 485 million to the EU budget.
o OLAF opened 223 new investigations, following 1174 preliminary analyses carried out by OLAF
experts.

RESULTS OF OLAF'S WORK

o As a result of the 3 500 investigations OLAF has completed since it was set up in 1999:
o 335 individuals have received prison sentences totalling 900 years
o over €1.1 billion of EU money has been recovered (excluding financial penalties)
o on average OLAF has recovered €100 million a year.
HOW MUCH DOES OLAF COST EU TAX PAYERS?

o OLAF's budget for 2019 was €59.5 million

HOW MANY PEOPLE ARE INVOLVED IN FIGHTING FRAUD IN THE EU?

o EU countries manage 80% of EU funds and have primary responsibility for fighting fraud.
They employ most of those involved in this fight for example 500 000 police officers.
o OLAF has 422 staff – of which more than two-thirds work on fraud investigations.

SCIF
o The tasks and responsibilities of the Service for Combating Irregularities and Fraud - SCIF
(Samostalni odjel za suzbijanje nepravilnosti i prijevara) pri Ministarstvu financija Republike
Hrvatske are established by Croatia Government Decree on internal organization of the
Ministry of Finance (OG 32/12, 67/12, 124/12, 78/13).
o Also the responsibilities of the Service Department are stipulated with the Government
Regulation on the institutional framework of the system of combating irregularities and fraud
(OG 144/13).

RESPONIBILITIES OF SCIF

o The Service for Combating Irregularities and Fraud shall be responsible for:
o co-ordination of legislative, administrative, and operating activities between bodies in the
AFCOS (anti-fraud coordination service) system with a view to protecting the financial
interests of the EU and direct co-operation with OLAF,
o the exchange of information on irregularities and fraud with bodies in the AFCOS system and
with OLAF,
o ensuring that OLAF experts can perform immediate controls and investigations in the
territory of the Republic of Croatia,
o developing vocational training programmes for employees of the bodies in the AFCOS system
in co-operation with OLAF and for providing organizational support in the carrying out of the
above etc.

- counterfeiting – krivotvorenje
- subsidies – subvencije

- independent investigative services – nezavisna služba za provođenje istražnih postupaka

- to combat fraud – boriti se protiv prijevara

- diversion of funds – zlouporaba sredstava

- agricultural expenditure – izdaci za poljoprivredu

- Fraudulently acquired – na prijevaru pribavljeni novac

- Director-General – glavni ravnatelj

- on-the-spot check – provjera na licu mjesta

- civil offences – građanski prekršaji

 THE EUROPEAN CENTRAL BANK
ECB
 The European Central Bank (ECB) is the central bank for the euro and it administers the
monetary policy of the Eurozone, which consists of 19 EU member states and is one of the
largest currency areas in the world.

EU INSTITUTION

 It is one of the world's most important central banks and is one of the seven institutions of
the European Union (EU) listed in the Treaty on European Union (TEU).

ESTABLISHMENT

• The bank was established by the Treaty of Amsterdam in 1998, and is headquartered in
Frankfurt, Germany
• https://www.youtube.com/watch?v=Aijn_4TFF_8
• 1957
• 1968
• 1970
• 1979
• 1986
• 1992

OWNERS

 The capital stock of the bank is owned by the central banks of all 28 EU member states.

 The owners and shareholders of the European Central Bank are the central banks of the 28
member states of the EU.

TRANSPARENCY OF ECB

 The central bank provides the general public and the markets with all relevant information
on its strategy, assessments and policy decisions as well as its procedures in an open, clear
and timely manner.

PRESIDENT

 As of 2019, the President of the ECB is Christine Lagarde, former Managing Director of the
International Monetary Fund, Washington, D.C. (2011-2019) and Minister of Economy and
Finance of France (2007-2011)

THE GOVERNING COUNCIL

 The main decision-making body is the Governing Council, which consists of the six members
of the Executive Board plus the governors of the central banks of the 19 euro area countries.

ECB AND THE EUROSYSTEM EXPLAINED IN 3 MIN

 http://www.youtube.com/watch?v=TAlcFwGIQBg
EUROSYSTEM

 The European Central Bank and the national central banks together constitute the
Eurosystem, the central banking system of the euro area. The main objective of the
Eurosystem is to maintain price stability: safeguarding the value of the euro.

TRANSLATION

 The Eurosystem is responsible for:  Eurosustav je odgovoran za:

 defining and implementing monetary  definiranje i provođenje monetarne
policy politike
 conducting foreign exchange operations  vođenje deviznih operacija
 holding and managing the euro area’s  držanje i upravljanje deviznim
foreign currency reserves rezervama eurozone
 promoting the smooth operation of  promicanje nesmetanog rada platnih
payment systems. sustava

INFLATION

 Inflation is the rate at which the general level of prices for goods and services is rising and,
consequently, the purchasing power of currency is falling. Central banks attempt to limit
inflation — and avoid deflation — in order to keep the economy running smoothly.

 It is a sustained increase in the general price level of goods and services in an economy over
a period of time

 The inflation rate is a measure of changing prices, typically calculated on a month-to-month

and year-to-year basis and expressed as a percentage.

 The Eurosystem is the central banking system of the euro area

 The main objective of the Eurosystem is to maintain price stability
 It is responsible for defining and implementing monetary policy, conducting foreign
exchange operations, holding and managing the euro area’s foreign currency reserves and
promoting the smooth operation of payment systems.

TRANSLATION

The ECB is the central bank for Europe's single ESB je središnja banka za jedinstvenu europsku
currency, the euro. The ECB’s main task is to valutu, euro. Glavna je zadaća ESB-a održavati
maintain the euro's purchasing power and thus njegovu kupovnu moć i time stabilnost cijena u
price stability in the euro area. The euro area europodručju (eurozoni). Europodručje
comprises the 19 European Union countries obuhvaća 19 država članica Europske unije koje
that have introduced the euro since 1999. su nakon 1999. uvele euro.

 Single currency – jedinstvena valuta

 Purchasing power – kupovna moć

The ECB publicly announces its monetary policy ESB javno najavljuje strategiju svoje monetarne
strategy and communicates its regular politike i priopćuje o redovitim ocjenama
assessment of economic developments. This gospodarskih kretanja. Time tržištima pomaže u
helps the markets to understand the systematic razumijevanju uzorka sustavnog odgovora
response pattern of monetary policy to monetarne politike na gospodarska kretanja i
 economic developments and shocks. It makes udare. Na taj način tržišta mogu lakše
policy moves more predictable for the markets predvidjeti srednjoročne poteze politike te
over the medium term. Market expectations učinkovitije i točnije oblikovati svoja očekivanja.
can thus be formed more efficiently and
accurately.

 ocjena gospodarskih kretanja – assessment of economic developments

 gospodarski udari – economic shocks

DOUBLE TAXATION IN EU
DEFINITIONS
 an occurrence where the income from the same source is taxed twice before translating into
net income;
 the levying of tax by two or more jurisdictions on the same declared income asset or financial
transaction.
TRANSLATION

Double taxation can be defined as the Dvostruko oporezivanje može se definirati kao
imposition of similar taxes in two or more states nametanje usporedivih poreza u dvije ili više
on the same taxpayer in respect of the same država istome poreznom obvezniku za jednak
subject matter and for identical purposes. predmet i u iste svrhe.

LEGAL AND ECONOMIC DOUBLE TAXATION

 Legal - if the same person is taxed twice on the same income in at least two states.

 Economic - firstly corporate income tax is levied, and then the shareholders of the enterprise
are required to pay tax on the dividends distributed out of the profit after taxes have been
paid.

CROSS-BORDER DOUBLE TAXATION

 Cross-border double taxation occurs when two different countries subject the same item of
income or property to tax for the same period and in the hands of the same taxpayer.

DOUBLE TAXATION IN THE EU

 There is no general EU measure to eliminate double taxation. Most EU countries have

bilateral tax treaties in place with each other to relieve double taxation when it occurs.

CJEU RULING

 The Court of Justice of the EU has ruled that, in the absence of an EU-wide measure to
eliminate double taxation, EU countries retain the power to define by double taxation treaty,
or unilaterally, the criteria for allocating their power of taxation between them, particularly
with a view to eliminating double taxation.
  Furthermore, EU countries are not obliged under EU law or international law to conclude tax
treaties with each other.

COUSES OF DOUBLE TAXATION

 Causes are mainly set in the differences in the national approaches to taxation.

 Some states claim full or unlimited tax jurisdiction with respect to all or certain types of
income, and they claim to tax on the basis of the residence or nationality of the taxpayer
over all the taxpayer’s income wherever arising (i.e. residence or worldwide jurisdiction).

 On the other hand, some states claim a limited jurisdiction taxing only income arising within
its territory (source-based jurisdiction).

TRANSLATION

Situations where different member states tax Slučajevi u kojima različite države članice
the same income or capital twice can create dvaput oporezuju isti dohodak ili kapital mogu
serious obstacles to doing business across stvoriti velike prepreke za prekogranično
borders. They create an excessive tax burden, poslovanje. Mogu stvoriti prekomjerno porezno
can cause economic distortions and have a opterećenje, uzrokovati gospodarske
negative impact on cross-border investment. poremećaje i negativno utjecati na
prekogranična ulaganja.

COLLOCATION

 double taxation

 dispute resolution

 business environment

 tax burden

 time limit

 arbitration procedure

 advisory panel

 economic distortion

 cross-border investment

 member states

TRANSLATION

The draft directive requires dispute resolution U nacrtu direktive zahtijeva se da mehanizmi
mechanisms to be mandatory and binding, with rješavanja sporova budu obvezni i obvezujući, da
clear time limits and an obligation to reach imaju jasno utvrđene rokove i obvezu postizanja
results. It thereby sets out to secure a tax rezultata. Time se želi stvoriti porezno okružje u
environment where compliance costs for kojem su troškovi usklađivanja za poduzeća svedeni
businesses are reduced to a minimum. na najmanju razinu.
Dvostruko oporezivanje nastaje kada se na isto Double taxation occurs when tax is paid more
oporezivo dobro više puta plati porez, a može biti than once on the same taxable income or asset,
pravno ili ekonomsko. Dvostruko oporezivanje je and it can be legal or economic. Double taxation
pravno ako je ista osoba oporezovana dva puta za is legal if the same person is taxed twice on the
isti dohodak u najmanje dvije države. Ekonomsko same income in at least two states. Economic
dvostruko oporezivanje nastaje kad je propisano da double taxation arises when firstly corporate
poduzeće treba platiti porez na svoju dobit, a i income tax is levied, and then the shareholders
njegovi dioničari dodatno trebaju platiti porez na of the enterprise are required to pay tax on the
dividendu isplaćenu iz te oporezovane dobiti. dividends distributed out of the profit after
taxes have been paid.