#4 You Can’t Deduct Everything as a Business Expense
To claim a purchase as a business expense, the supplier must issue an R1 invoice to your company that includes the company’s official name, legal address, and OIB. Make sure you keep all business receipts and provide them to your accountant.
Here are a few examples of general expenses:
If you work from home, you cannot deduct rent, water, electricity, or internet bills unless the relevant contracts are in your company’s name and paid by your company.
If you buy printer ink at a store using your business debit card, you must ask the salesperson to issue you an R1 invoice. Simply having a receipt is not enough. The good news is that once you register your business with the store, they’ll save your information for future purchases, making it easier to get an official invoice.
Your company may reimburse personal business expenses, such as meals and mileage, but there are many restrictions depending on the situation. For details, consult your accountant.
#5 Accepting cash increases your reporting obligations
As of January 1, 2013, all businesses that accept cash payments or online credit card payments are required to purchase and use fiscalization software that automatically reports every cash transaction to the government in real time. Even accepting a single payment in cash or by credit card entails liability.
Fiscalization software is not cheap and can be quite complicated to use. It is also strictly regulated, so don’t risk drawing the attention of tax authorities by failing to comply with this requirement. Here’s everything you need to know about fiscalization.
#7 What kind of business do you want to start?
Choosing the right corporate structure is crucial to achieving your business goals. In Croatia, there are various business structures, none of which are equal. It is important that the option you choose meets your needs.
#8 Closing a company is a specific process
If you’ve decided that you no longer want to have an active company, you have three options:
Sell the company to another person—this is the least expensive option. The buyer must have an OIB and be a registered entity in Croatia.
Cease all operations—this means no income is generated and no expenses are incurred. However, you will still have to pay for the services of an accountant who will file annual tax returns, and you will still have to pay the director’s salary.
Closing a company—There are two ways to close a company, depending on whether the company has debts that need to be repaid. If there are debts, the company must undergo a liquidation process, during which the director’s salary must still be paid.
If you established a company for the sole purpose of obtaining residency in Croatia, it is important to know what the costs will be once the company is no longer tied to your residency.