Croatia: new rule to prevent tax-evasion

In the procedure for the establishment of joint liability the directors and shareholders have no formal rights under the criminal procedure law. Instead, they can file an appeal to the tax authority. However such a move does not stop the tax authority from applying their enforcement order against them. Alternatively they can also file an appeal with an administrative court.

Previously, shareholders and directors were only held liable for the payment of their companies’ debts when they committed a crime, and this was established by way of a criminal procedure. Now that this has changed, the government is expecting that this modification of this basic rule will make enforcement more flexible and will help prevent the tax-evasion and prevent business people from escaping the payment of their debts.

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