Page 22 - Central and Eastern European Transfer Pricing Review

22 | CEE Transfer Pricing Review

Do tax authorities have Other recent Does the tax authority publish APA
requirements or preferences developments data either in the form of an annual
regarding databases for report or through the disclosure of
comparables? Due to the amendments of the Croatian data in public forums?
There is no requirement regarding the CPT legislation of 1 March 2012 in Not applicable.
relation to the provisions on transfer
use of a certain database for performing pricing, the CUP is no longer considered
searches for comparables. The CTA uses to be the preferred method in justifying Please provide some information
the Amadeus database. on how successful the APA program
that the transfer prices applied in is and whether there are any known
What level of interaction do tax related party transactions are at arms diffculties?
authorities have with customs length. The amendments of Croatian Not applicable.
authorities? CPT legislation are in line with the
amendments of the OECD Guidelines
High. of July 2010, which outline that the most Language
appropriate method for determining
Are management fees deductible? In which language or languages can
the arms length nature of the applied
Yes, assuming documentary support transfer prices is selected based on the documentation be fled?
exists and economic beneft can be given circumstances. If accounting and other documentation is
proven. is not in Croatian, the CTA will require a
translation.
Are management fees subject to Tax treaty/double tax
withholding? resolution
Generally yes, but it depends on the
actual service that is provided. Domestic What is the extent of the double
withholding tax is 15 percent, but can be tax treaty network?
reduced or eliminated under an effective Extensive.
double taxation treaty.
If extensive, is the competent
In certain circumstances, a withholding authority effective in obtaining
tax at the rate of 20 percent is double tax relief?
applicable to payments for all services Limited practical experience in Croatian
to non-residents who have their legal business practice with application of
seat or place of effective management competent authority proceedings.
or control in countries where the
general or average CPT rate is lower When may a taxpayer submit an
than 12.5 percent (the list of countries adjustment to competent authority?
is published by the CTA). No formal rules.

Are year-end transfer pricing May a taxpayer go to competent
adjustments permitted? authority before paying tax?
Yes. CPT legislation does not include No formal rules.
specifc provisions or rules related to
year-end transfer pricing adjustments.
However, year-end adjustments occur Advance pricing KPMG in Croatia
in practice. arrangements
Paul Suchar
Year-end adjustments may result in What APA options are available, Tel: +385 1 5390 032
assessment and penalty interest on any if any? Email: psuchar@kpmg.com
customs duty/VAT that was not settled No APAs or advance rulings of any kind.
in a timely manner. Also, fxed penalties Tomislav Borosak
may be charged due to non-compliance Is there a fling fee for APAs? Tel: +385 1 5390 171
with the relevant legislation. Not applicable. Email: tborosak@kpmg.com

Other unique attributes?
As email addresses and phone numbers
No. change frequently, please email us at
transferpricing@kpmg.com if you are unable
to contact us via the information noted above.
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