| Status | Enacted Law |
| Law | Law No 155/23,of December 22, 2023, On September 18, 2025, Croatia opened a consultation on a Draft Bill to amend its Minimum Tax Act. The amendments are primarily to amend the QDMTT accounting standard so that the Croatian QDMTT qualifies for the QDMTT Safe Harbour and to provide for the notification deadline for appointing a designated filing entity. |
| Effective Date | Accounting periods beginning on or after December 31, 2023 |
| IIR | Yes (2024) |
| UTPR | Yes (2025) |
| QDMTT | Yes (2024) |
| Filing Deadlines | Standard |
| Safe Harbours | Transitional CbCR Safe Harbour. |
On September 18, 2025, Croatia opened a consultation on a Draft Bill to amend its Minimum Tax Act. The amendments are primarily to amend the QDMTT accounting standard so that the Croatian QDMTT qualifies for the QDMTT Safe Harbour and to provide for the notification deadline for appointing a designated filing entity.
On December 22, 2023, Law No 155/23, to implement the EU Minimum Tax Directive, was published in the Official Gazette.
On November 30, 2023, the Croatian government sent a draft bill to implement the Pillar Two GloBE rules to Parliament.
As expected, the Law closely follows the EU Directive. There are very few options given to member states in the EU Directive in terms of flexibility over national implementation. As provided in the EU Minimum Tax Directive, the GloBE rules also apply to wholly domestic groups.
Whilst the Law is to implement the EU Minimum Tax Directive into domestic law, it does not currently reflect most aspects of the OECD Administrative Guidance (either the February 2023, July 2023 or December 2023 guidance issued).
Similarly, only the Transitional CbCR Safe Harbour from the OECD Safe Harbours and Penalty Relief Guidance is specifically included in the Law. Other Safe Harbours from the Second Set of OECD Administrative Guidance (the QDMTT Safe Harbour and the Transitional UTPR Safe Harbour) are not included.
The Law includes administrative provisions for the application of the law, including filing and payment deadlines. Article 62 of the Law provides that the Minister of Finance will issue an Ordinance to provide further details on the calculation of the QDMTT, as well as the content of the GloBE Information Return, Top-Up Tax Return and QDMTT Return by December 31, 2025.
The Ministry of Finance will publish a list of jurisdictions that have implemented a qualifying income inclusion rule on its website.
Whilst the Law closely follows the EU Minimum Tax Directive and the OECD Model Rules, it does not include aspects of the OECD Administrative Guidance.
The following are not included:
-Currency conversion rules (Article 1.1)
-Deemed consolidation test (Article 1.2)
-Consolidated deferred tax amounts (Article 1.3)
-Sovereign wealth funds and the definition of Ultimate Parent Entity (Article 1.4)
-Clarifying the definition of ‘Excluded Entity’ (Article 1.5)
-Meaning of “ancillary” for Non-Profit Organisations (Article 1.6);
-Forex hedge election (Article 2.2)
-Excluded dividends – Asymmetric treatment of dividends and distributions (Article 2.3)
-Debt release election (Article 2.4)
-Accrued pension expenses (Article 2.5)
-Covered taxes on deemed distributions (Article 2.6)
-Excess negative tax carry-forward guidance (Article 2.7)
-Substitute loss-carry forwards (Article 2.8)
-Equity gain or loss inclusion election (Article 2.9)
-Allocation of taxes arising under a Blended CFC Tax Regimes (Article 2.10)
-The extension of the taxable distribution method election to insurance investment entities (Article 3.1)
-Exclusion of insurance investment entities from the definition of Intermediate Parent Entity and Partially-Owned Parent Entity (Article 3.2)
-The extension of Additional Capital to include Restricted Tier One Capital (Article 3.3)
-Liabilities related to Excluded Dividends and Excluded Equity Gain or Loss from securities held on behalf of policyholders (Article 3.4)
-Simplification for Short-term Portfolio Shareholdings (Article 3.5)
-Application of Tax transparency election to mutual insurance companies (Article 3.6)
-Tax Credits Guidance (MTTCs) (Article 2 Second Set of OECD Administrative Guidance)
-SBIE Rules: Foreign rules (Article 3 Second Set of OECD Administrative Guidance)
Article 34 of the Law includes a general provision that deems the top-up tax to be zero if the requirements of a Qualified International Safe Harbour Agreement are met.
Article 57 of the Law specifically includes the Transitional CbCR Safe Harbour which ties into the OECD rules as provided in the Safe Harbours & Penalty Relief Guidance (at a high-level) . The specific rules for joint ventures and treatment of Net Unrealised Fair Value Losses, for instance, are not included. Similarly, relevant provisions from the December 2023 OECD Administrative Guidance that impact on the safe harbour (eg MNEs not required to file CbC Reports and no push-down of taxes on income of PEs, CFCs, and hybrid entities) are also not included.
Article 57 also mentions the UTPR and QDMTT Safe Harbours.
Under Article 60 of the Law, further Safe Harbours, as determined under Qualified International Safe Harbour Agreements are to be published by the Minister of Finance on their website.
The Law therefore includes all of the key elections as provided in the EU Minimum Tax Directive, including:
None of the elections in the OECD Administrative Guidance are included in the Law. Therefore, the following are not included:
As expected, the Law closely follows the EU Directive. There are very few options given to member states in the EU Directive in terms of flexibility over national implementation.
The main options relate to the design of the QDMTT.
The key differences are with the OECD model rules, including the extension to include large scale, purely domestic groups,
The OECD Model Rules allow flexibility as to how to apply the UTPR. Croatia’s approach is to apply a UTPR top-up tax rather than a denial of deduction.
As such the carry forward provisions in Article 2.4.2 of the Model Rules for UTPR amounts not sufficient to provide for the additional cash tax expense are not relevant and these rules are not included in the Law.
Article 13 of the Law provides that Croatia will apply a domestic minimum top-up tax (intended to be a QDMTT) for financial years beginning on or after December 31, 2023.
QDMTT Design Features
The Law provides that the standard GloBE calculation rules apply for determining the top-up tax. As such it refers to the general GloBE calculation in Article 13(3) for the determination of adjusted taxes and allowable net profits (to determine the QDMTT ETR). This also ensures that the special rules on corporate restructuring, holding structures, and for investment entities also apply for the application of the QDMTT.
Article 13(4) provides that a local accounting standard (as opposed to the accounting standard used by the UPE for the consolidated accounts) can be used for calculating income for QDMTT purposes, where the Croatian entity uses a local accounting standard for its financial accounting (and it has been adjusted to avoid significant distortion of competition, if any).
The September 2025 Draft Bill proposes to amend Article 13(4) so that the accounting standard for QDMTT purposes will the one used in the default GloBE rules.
As such, the profit or loss of the constituent entity for QDMTT purposes will be the accounting standard used in the preparation of consolidated financial accounts of the UPE. However, if this is not reasonably practicable, it can be determined by applying another approved or authorised accounting standard (ie a local standard, which in Croatia is the application of Croatian Financial Reporting Standards or International Financial Reporting Standards).
Any QDMTT that has not been paid within four years is usually taken into account for top-up tax purposes in the fifth year. This does not apply for the QDMTT calculation (just for tax under an IIR or UTPR). This is required to avoid circularity and ensure the QDMTT is not taken into account for the domestic minimum tax calculation.
Note that the provisions of the OECD Administrative Guidance relating to the design of QDMTTs (including the restriction on the pushdown of taxes to CFCs, Hybrids and PEs) are not included in the Law.
Further details are to be provided by the Ministry of Finance. Article 62 of the Law provides that an Ordinance providing detailed rules of calculation and collection is to be published before December 31, 2025.
Filing
The relevant aspects of the submission of a GloBE Information Return (GIR) are included, as provided in the EU Directive.
Every Constituent Entity located in Croatia will have an obligation to file a GIR in Croatia. However, this obligation can be discharged if the GIR is filed by:
Where the GIR is being filed by either the Ultimate Parent Entity or the Designated Filing Entity, the Constituent Entity, must file a notification with the Revenue.
The notification must contain:
Where the GIR is filed by the Designated Local Entity it needs to outline the Constituent Entities that it is filing on behalf of.
Both the GIR and associated notifications must be filed no later than 15 months after the end of the fiscal year (with an 18-month deadline for the Transition Year).
Article 48(1) of the Law provides that an entity subject to the IIR or UTPR is required to file a top-up tax return within 30 days from the GIR filing deadline.
Entities subject to the QDMTT are required to submit a QDMTT return by the GIR filing deadline, under Article 49 of the Law.
Article 46(8) of the Law provides that if two or more constituent entities of the same MNE or a large domestic group that are subject to GloBE rules, are located in Croatia, they are required to appoint one of them who will be considered responsible for all tax rights and obligations (ie filing and payment).
The September 2025 Draft Bill amends this provision to provide that the appointment of the designated filing entity must be made by the deadline for filing the GloBE tax returns in Articles 48 and 49 of the Minimum Tax Act.
Payment
Article 48(4) of the Law provides that top-up tax arising under the IIR or UTPR must be paid within 30 days from the deadline for filing the top-up tax return.
Top-up tax arising under the QDMTT is due for payment within 30 days of the deadline for filing the QDMTT return, under Article 49(4) of the Law.
Penalties
Article 52 of the Law provides for a late filing penalty of between EUR 3,000 to EUR 50,000 for delays in filing the GIR. A penalty of between EUR 3,000 to EUR 100,000 applies for filing the top-up tax or QDMTT return after the filing deadline.
No returns issued yet.
| Croatia | |||
|---|---|---|---|
| Effective Date: | Accounting periods beginning on or after December 31, 2023 | ||
| Section/Article | |||
| First Set of OECD Administrative Guidance | |||
| 1.1 | Rebasing monetary thresholds in the GloBE Rules | – | |
| 1.2 | Deemed consolidation test | – | |
| 1.3 | Consolidated deferred tax amounts | – | |
| 1.4 | Sovereign wealth funds and the definition of Ultimate Parent Entity | – | |
| 1.5 | Clarifying the definition of ‘Excluded Entity’ | – | |
| 1.6 | Meaning of ancillary for Non-Profit Organisations | – | |
| 2.1 | Intra-group transactions accounted at cost | – | |
| 2.2 | Excluded Equity Gains or Loss and hedges of investments in foreign operations | – | |
| 2.3 | Excluded Dividends- Asymmetric treatment of dividends and distributions | – | |
| 2.4 | Debt release Election | – | |
| 2.5 | Accrued Pension Expenses | – | |
| 2.6 | Covered Taxes on deemed distributions | – | |
| 2.7 | Excess Negative Tax Carry-forward guidance | – | |
| 2.8 | Substitute Loss carry forwards | – | |
| 2.9 | Equity Gain or loss inclusion election | – | |
| 2.9 | Qualified Ownership Interest/Flow through entity | – | |
| 2.1 | Allocation of taxes arising under a Blended CFC Tax Regimes | – | |
| 3.1 | Application of Taxable Distribution Method Election to Insurance Investment Entities | – | |
| 3.2 | Exclusion of Insurance Investment Entities from the definition of Intermediate Parent Entity and Partially-Owned Parent Entity | – | |
| 3.3 | Restricted Tier 1 Capital | – | |
| 3.4 | Liabilities related to Excluded Dividends and Excluded Equity Gain or Loss from securities held on behalf of policyholders | – | |
| 3.5 | Simplification for Short-term Portfolio Shareholdings | – | |
| 3.6 | Application of Tax transparency election to Mutual insurance companies | – | |
| 4.1 | Deferred tax assets with respect to tax credits under Article 9.1.1 | – | |
| 4.2 | Applicability of Article 9.1.3 to transactions similar to asset transfers | – | |
| 4.3 | Asset carrying value and deferred taxes under 9.1.3 | – | |
| Second Set of OECD Administrative Guidance | |||
| 1 | Currency conversion rules | – | |
| 2 | MTTCs | – | |
| 3 | SBIE Rules | ||
| – Foreign rules | – | ||
| Stock-based compensation election | – | ||
| Leases | – | ||
| – Impairment losses inc in tangible asset value | – | ||
| 4.1 | QDMTT Safe Harbour | – | |
| 4.2 | UTPR Safe Harbour | – | |
| Third Set of OECD Administrative Guidance | |||
| 1 | Transitional CbCR – Purchase Accounting Adjustments (consistent reporting condition, goodwill impairment adjustment) | ||
| 2.2.1 | Transitional CbCR – JVs | ||
| 2.3.1 | Transitional CbCR – Same Financial Statements/Local Financial Statements for Statutory Reporting | ||
| 2.3.2 | Transitional CbCR – Using different accounting standards | ||
| 2.3.3 | Transitional CbCR – Adjustments to Qualified Financial Statements/Dividend Mismatches | ||
| 2.3.4 | Transitional CbCR – MNEs not required to file CbC Reports | ||
| 2.3.5 | Transitional CbCR – Qualified Financial Statements for PEs | ||
| 2.4.2 | Transitional CbCR – Treatment of Taxes on income of PEs, CFCs, and Hybrid Entities | ||
| 2.6 | Transitional CbCR – Treatment of hybrid arbitrage arrangements | ||
| 3.1 | Identifying Consolidated Revenue | ||
| 3.2 | Mismatch between Fiscal Years of the UPE and another Constituent Entity | ||
| 3.3 | Mismatch between Fiscal Year and Tax Year of Constituent Entity | ||
| 4.2.1 | Blended CFCs -multiple GloBE Jurisdictional ETRs | ||
| 4.2.2 | Blended CFCs – not required to calculate an ETR | ||
| 4.2.3 | Blended CFCs – income of non-GloBE Entities | ||
| 5.3 | 30 June 2026 Filing deadline | ||
| 6 | NMCE Simplified Calcs | ||
| Fourth Set of OECD Administrative Guidance | |||
| 1.2.1 | Aggregate DTL Category basis | ||
| 1.2.1 | Exclusion of certain types of GL accounts and separate tracking | ||
| 1.2.1 | Exclusion of GL accounts that generate standalone DTAs | ||
| 1.2.1 | Exclusion of swinging accounts and separate tracking | ||
| 1.2.2 | FIFO/LIFO Basis | ||
| 1.2.3 | Aggregation of Short-term DTLs | ||
| 1.2.2 | Reversal of DTLs that accrued before the Transition Year | ||
| 1.2.2 | 5 year unclaimed accrual election | ||
| 2.1.2 | Recalculated deferred tax where GloBE carrying value differs from accounting carrying value | ||
| 2.1.2 | GloBE and accounting carrying values and the Transition Rules | ||
| 2.1.2 | Additional provisions for Intragroup transactions accounted for at cost | ||
| 2.1.2 | Exclusion of GloBE carrying value from SBIE | ||
| 3.1.3 | General rules for allocating cross-border, current taxes under a cross-crediting corporate tax system: 4 Steps | ||
| 3.1.3 | Specific rules for foreign PEs/CFCs, Hybrids/rev hybrids with domestic source income | ||
| 3.1.3 | Cross-crediting between Permanent Establishments and distributions from foreign subsidiaries | ||
| 4.1 | Extension of the Substitute Loss Carry-forward DTA to PEs, hybrids and rev hybrids | ||
| 4.2 | Allocation of deferred tax expenses and benefits from a Parent Entity to a CFC, PE Hybrid or Rev Hybrid: 5 step process | ||
| 4.2.2 | Five-Year Election to exclude the allocation of all deferred tax expenses and benefits to CFCs, PEs, Hybrids and Rev Hybrids | ||
| 4.2.3 | Exclusion of deferred tax assets or liabilities arising under a Blended CFC regime from transition rules | ||
| 5.2.2 | Determining GloBE status when a Flow-through Entity is held directly by another Flow-through Entity | ||
| 5.3.2 | Non-group owners: Partially owned Flow-through Entities | ||
| 5.3.5 | Non-group owners: Indirect minority ownership | ||
| 5.4.2 | Taxes allocated to a flow-through entity | ||
| 5.5.2 | Hybrid entities – Taxes pushed down include indirect owners | ||
| 5.5.4 | Hybrid entities – Entities located in jurisdictions without a Corporate Income Tax system | ||
| 5.6.2 | Extension of taxes pushed down to include Reverse Hybrids | ||
| 6.1.4 | Option to exclude a Securitization Entity from scope of QDMTT | ||
| 6.1.4 | Option to not impose top-up tax liabilities on SPVs used in securitization transactions | ||
| 6.1.4 | Amendments to the Switch-Off rule | ||
| 6.1.4 | New definition: Securitization Entity | ||
| 6.1.4 | New definition: Securitization Arrangement | ||
| January 2025 OECD Administrtive Guidance | |||
| 1 | Articles 8.1.4 and 8.1.5 | ||
| 1 | Amendments to CbCR Safe Harbour for 9.1 | ||
| 1 | Amendments to QDMTT Safe Harbour for 9.1 | ||
| 1 | Article 9.1 of the GloBE Rules | ||
| 1 | Central Record of Legislation with Transitional Qualified Status |
| Note | Croatia | |
|---|---|---|
| QDMTT?(Enacted/Draft) | Is there a QDMTT in the Legislation? | Yes – Enacted |
| Effective Date: | Accounting periods beginning on or after December 31, 2023 | |
| Administrative Guidance/Safe Harbour Guidance? | Are the provisions of the OECD Administrative Guidance and Safe Harbour Guidance reflected in the current legislation? | No |
| Separate/Transposed QDMTT | Is the QDMTT a Separate QDMTT or a Transposition of the GloBE Rules (with Amendments) | Transposed |
| Domestic Groups | A QDMTT can also apply to purely domestic groups. | Yes – Article 13(3) |
| Scope Definitions | The definitions of Ultimate Parent Entity, MNE Group, and Constituent Entity correspond with the definitions in the GloBE Rules. | Yes – Article 13(3) |
| Income and covered taxes of Constituent Entities | The QDMTT must compute the tax liability for the jurisdiction by taking into account the income and covered taxes of Constituent Entities under the GloBE Rules. | Yes – Article 13(3) |
| Separate ETRs | A QDMTT must determine a separate ETR and Top-up Tax amount for MOCEs, Joint Ventures and JV Subsidiaries. | Yes – Article 13(3) |
| Charging | A QDMTT must impose a Top-up Tax on one or more domestic Constituent Entities on the Excess Profits of all domestic Constituent Entities, including the domestic Parent Entity. | Yes – Article 13(3) |
| Enforceability | The legal liability for the domestic top-up tax needs to be enforceable against at least one Constituent Entity in the jurisdiction. | Yes – Article 13 |
| Different Accounting Standard? – Optional | Is the use of a local accounting standard optional? | Yes – Article 13(4) [To be removed in the September 2025 Draft Bill] |
| Different Accounting Standard? – Mandatory | Is the AG2 guidance followed? | No |
| Different Accounting Standard? – Default GloBE rules | Do the general GloBE rules apply for the QDMTT accounting standard? | No (But included from January 1, 2024 in the September 2025 Draft Bill) |
| Require 100% ownership? | The QDMTT )can require 100% ownership | No |
| Differences to GloBE Rules: tighter restriction is consistent with local tax rules | The QDMTT can be more restrictive than the GloBE Rules where the tighter restriction is consistent with local tax rules. | None |
| Differences to GloBE Rules: Not relevant to in the context of its domestic tax system | The QDMTT can exclude adjustments that are not relevant to in the context of its domestic tax system. | None |
| Income/Loss of a PE | The QDMTT must exclude the income or loss of a foreign Permanent Establishment from the income or loss of the Main Entity. | Yes – Article 13(3) |
| Tax Transparency | A QDMTT must include certain tax transparent provisions. | Yes – Article 13(3) |
| Adjusted Covered Taxes Consistency | The range of taxes included in Covered Taxes needs to be the same or narrower, as under the GloBE rules. | Yes – Article 13(3) |
| GloBE Loss Election? | Not Required in QDMTT | Yes – Article 13(3) |
| No Pushdown to CFC or PE | A QDMTT must exclude: (1) tax paid or incurred by a Constituent Entity-owner under a CFC Tax Regime that is pushed down to a domestic Constituent Entity in the GloBE Rules and (2) tax paid or incurred by a Main Entity that is allocated to a PE in the jurisdiction. | No |
| Exclude tax allocated to Hybrids | Second AG Guidance | No |
| Exclude allocated net basis tax on dividends (except WHT) | Second AG Guidance | No |
| UPE that is a Flow-Through Entity | Second AG Guidance | Yes – Article 13(3) |
| UPE subject to Deductible Dividend Regime | Second AG Guidance | Yes – Article 13(3) |
| Eligible Distribution Tax Systems | Second AG Guidance | Yes – Article 13(3) |
| ETR Computation for Investment Entities | Second AG Guidance | Yes – Article 13(3) |
| Investment Entity Tax Transparency Election | Second AG Guidance | Yes – Article 13(3) |
| Taxable Distribution Method Election | Second AG Guidance | Yes – Article 13(3) |
| Multi-Parented MNE Groups | Second AG Guidance | Yes – Article 13(3) |
| Additional Top-Up Tax/Excess Negative Tax Expense | A QDMTT needs to have provisions for additional top-up tax where there is no Net GloBE Income and the Adjusted Covered are less than zero and less than the Expected Adjusted Covered Taxes. Amount. Excess Negative Tax Carry-forward rules also need to be in place. | Yes – Article 13(3) |
| Modified Top-Up Tax Formula | The QDMTT top-up tax formula needs to be modified as the GloBE Rules subtract tax paid under a QDMTT from the current GloBE Top-up Tax. | Yes – Article 13(5) |
| Same Approach As GloBE Rules | A QDMTT must require that top-up tax is taken into account by the relevant Constituent Entity at the same time and in the same manner as under the GloBE Rules (eg it can’t be carried forward). | Yes – Article 13(3) |
| SBIE Included? | Not Required in QDMTT | Yes – Article 13(3) |
| SBIE Rates same as GloBE? | Not Required in QDMTT | Yes – Article 13(3) |
| De Minimis Rule Included? | Not Required in QDMTT | Yes – Article 13(3) |
| Restructuring Rules? | A QDMTT needs to include restructuring rules as provided in the GloBE rules to the extent necessary to conform to the tax reorganization rules in the jurisdiction. | Yes – Article 13(3) |
| Safe Harbours? | A QDMTT needs to contain GloBE safe harbours. | Yes – Article 13(3) |
| Deferred Tax Transition Rule? | A QDMTT must include the deferred tax starting point under Article 9.1.1 of the Model Rules. | Yes – Article 13(3) |
| SBIE Transitional Rates? | Not Required in QDMTT | Yes – Article 13(3) |
| Initial Phase of International Activity Exemption | Not Required in QDMTT | Yes – Article 13(3) |
| Elections? | Where the GloBE Rules permit an election, a QDMTT must generally also provide for the election and require the MNE Group to make the same election under the QDMTT as is made under the GloBE Rules. | Yes – Article 13(3) |
| Deferred Tax transition: First time or refreshing rule? | Second AG | No |
| New transition year – amend tax attributes? | Second AG | No |
| Currency provisions? | Second AG | No |
| DTL Recapture rules – Aggregate DTL Categories | Fourth AG, 1.2.8 | |
| DTL Recapture rules Unclaimed Accrual Five-Year Election | Fourth AG, 1.2.8 | |
| Reverse Hybrid Pushdown | Fourth AG, 5.6.2 | |
| Securitization Entities – A QDMTT may also exclude a Securitisation Entity from its scope | Fourth AG, 6.1.4 | |
| Securitization Entities – A jurisdiction may allocate the QDMTT liability for any QDMTT top-up tax to another Constituent Entity (if any) that is located in the jurisdiction | Fourth AG, 6.1.4 | |
| Note |
None
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