As of January 1st 2016, new amendments to the Accounting Act have been entered into force thereby enacting the provisions of the EU Directive no. 2013/34/EU. Besides the Directive, Croatian Tax Administration had some involvements which consequently amended provisions regarding the accounting activities.Entrepreneurs are now classified in four major groups; micro, small, medium and large. Classification is determined for current fiscal year based on results of the entrepreneur from the previous fiscal year.
The above classification is important in view of obligations which each entrepreneur is obliged to provide, e.g. mandatory auditing. Also, micro, small and medium businesses are obliged to apply the Croatian Financial Reporting Standards, whereas large businesses and public entities are obliged to apply the International Financial Reporting Standards (IFRS). Businesses that apply IFRS have to apply them in accordance with Regulation (EC) no. 1606/2002.Furthermore, legal or natural persons to whom entrepreneurs are outsourcing their accounting will have to be duly licensed based on special laws. Such law is not yet entered into force, but its enactment is expected by 2017.
The important amendment for entrepreneurs who conduct their operation abroad and not in Croatia is that now they can issue invoices without signature, provided that it is in compliance with tax regulations, and include the issuer’s name. Entrepreneurs shall designate a person responsible for controlling the documents prior to recognition of the receivable in the accounting records.The timeframe for keeping the documents is now prolonged from 7 to 11 years minimum, and now entrepreneur can keep his books outside of Croatia, but still within an EU member state. Also, he needs to keep a unique chart of accounts, including its numerical and alphabetic coding and off-balance sheet accounts, which will be obligatory as of January 1st 2017.
Deadline for closing the business records are now determined at 4 months at latest upon business year end, meaning up to April 30th of the following year.In view of the audit of financial statements, the Accounting Act amended the classification of entrepreneurs which are subject to auditing. Now, the auditing is mandatory for separate and consolidated annual financial statements of public entities, large and medium businesses which are not public entities, the parent companies of large and medium groups if they are not individually audited, as well as separate and consolidated annual financial statements of all companies which have submitted a request for listing their securities on a regulated market.
This also refers to the separate and consolidated annual financial reports of all joint stock companies, commandite partnerships and limited liability companies whose separate or consolidated data in the year preceding the revision exceeds two of the following three conditions:• Total assets amount 15.000.000,00 kn, • Net income amount 30.000.000,00 kn • Average number of employees during the business year.
Subject to audit are also annual financial statements of the entrepreneurs engaged in mergers, i.e. divisions in capacity of acquirers or newly incorporated companies. Parent companies are not with obligation to compile consolidated financial statements for small groups except the parent companies which include subjects of public interest.David Jakovljevic E: email@example.com T: +38517980646